The Independent Uganda: You get the Truth we Pay the Price
Since 2014, Sanlam Group has been on the expansion spree
LAC has been offering over 40 non-life insurance products that cater for personal, family and commercial risks, including the likes of motor insurance, fire and special perils insurance.
Others are contractors all risk insurance, marine insurance, money insurance, domestic (household) insurance, travel insurance and farming risks insurance, among others.
LAC acquired 42 out of the 48 American Insurance Group’s agents in November last year; increasing its network of insurance agents to 102.This followed AIG’s decision to quit the Ugandan market citing hard economic conditions.
The new move comes at a time when Uganda’s insurance industry is enjoying a relative surge in growth in gross underwritten premiums, albeit at a slow pace.
Insurance premiums underwritten over the years have grown from Shs463bn to Shs634bn in 2016 as a result of massive promotion campaigns and affordable product innovations targeting customer needs.
Newton Jazire, the LAC Managing Director, could not answer our repeated calls or emails to confirm the new development as he was reportedly out of office for meetings, a section of the workers at the regional insurance firm said.
But one of the workers who preferred anonymity said the ‘matter is yet to be made official.’
“The issue (merger) is yet to be communicated. You still have to wait for the official communication,” she said.
But Mariam Nalunkuuma, the communication manager at IRA-U confirmed to The Independent that the two insurance firms have indeed submitted their applications to the industry regulator seeking for a go-ahead to merge their operations.
“Of course, they (Sanlam and LAC) have approached IRA-U and there’s a procedure that they have to follow before the formal approval is made,” she said.
She said the procedure includes how they intend to integrate LAC’s staff and customers into Sanlam as well as services to be offered.
Another issue that needs to be fulfilled, according to Nalunkuuma, is LAC’s chief executive officer to introduce his Sanlam counterpart to his customers to ease transition without negatively affecting service delivery.
“The planned merger is purely a business decision and it is normal in any business,” she said, “We do believe that the merger will strengthen the company’s operation in terms of financial capability to undertake even bigger risks but also in terms of bringing on board new skills.”
Executives in the insurance industry across the African continent are currently calling upon insurance firms to merge their operations within the respective countries and across borders, so that they have large insurance and re-insurance companies with balance sheets that are better able to ensure lasting legacy and compete with the biggest and the best in the world.
Since 2014, Sanlam Group has been on the expansion spree after it allocated R4 billion (Shs1.12 trillion) as part of its strategy to expand in Africa, India and South-East Asia.
For instance, in March this year, the Group acquired a 40% stake in Zimbabwe-based Zimnat Lion Insurance Company Ltd in a deal worth $11.5 million.
Zimnat now plans to unveil new products for agriculture businesses, infrastructure development and strengthen its micro finance arm.
At the same time, the Group also acquired a 22% stake in UK-based micro-insurance provider, MicroEnsure Holdings Ltd (MicroEnsure) at an undisclosed amount.
This follows acquisition of a 63% interest in Soras Group Limited, Rwanda’s largest life and non-life insurance company for US$24.3 million and a 51 % stake in the Malaysian-based Koperasi MCIS Zurich Insurance in 2014.
Koperasi MCIS Zurich is a life and general insurance provider in Malaysia that was formed after a merger between MCIS Insurance and Zurich in 2002.
Other Sanlam General Insurance companies in Africa
- NICO Malawi – 62% (direct 49% and 13% indirect via NICO Holdings)
- Sanlam General Insurance Tanzania – 52% (direct 47% and 5% indirect via NICO Holdings)
- NICO Zambia – 62% (direct 49% and 13% indirect via NICO Holdings)
- Shriram General Insurance, India – 20% via Shriram Capital
- Pacific & Orient, Malaysia – 49%
- Legal Guard, Botswana – 60% via BIHL
- Soras AG, Rwanda – 63% via Soras Group
- Santam Namibia – 37%
- Enterprise Insurance, Ghana – 40%
- Gateway, Kenya – 56%
- FBN Insurance, Nigeria – 35%
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