Sanlam, a South African financial services group, and Allianz, one of the world’s leading insurers and asset managers, have agreed to form a joint venture to combine operations in 29 African countries excluding South Africa.
South African billionaire Patrice Motsepe owns a minority stake in Sanlam, Africa’s largest insurer, through his financial firm Ubuntu-Botho Investments (UBI), which he founded in 2004. UBI owns a 14.27-percent stake in the insurance company, with 292,471,806 ordinary shares worth R18.9 billion ($1.2 billion).
The JV agreement between Sanlam and Allianz will create the largest pan-African insurance player, with the entity expected to rank in the top three in the majority of the markets in which it will operate.
According to experts, the combination of Sanlam’s African reach as the continent’s largest non-banking financial services company and Allianz’s global capabilities and insurance solutions will increase life and general insurance penetration, accelerate product innovation, and drive financial inclusion in high-growth African markets.
The new entity is expected to have a combined total group equity value in excess of R33 billion ($2.1 billion) and will leverage Sanlam and Allianz’s strengths to unlock synergies and provide customers with best-in-class, innovative insurance solutions and technical excellence.
The JV, according to management, will add value to all stakeholders by leveraging economies of scale, expanding geographical presence, increasing combined market share and diversifying product offerings.
The proposed JV, according to Sanlam Group CEO Paul Hanratty, will allow Sanlam to take a significant step toward realizing its ambition of becoming a leading pan-African financial services group.
He added that the deal will also strengthen the firm’s leadership position in multiple key markets that are core to our Africa strategy, building quality and scale where it matters.
The recent deal comes nearly three months after Sanlam announced the opening of three new offices in Lome, Togo’s capital city as part of its ambitious pan-African expansion drive as a market leader in the insurance business.
