Eagle Africa Insurance Brokers' Nairobi office. New acquisitions in Malawi and Zambia have stretched the company’s operations beyond Kenya, Uganda and Tanzania. Photo/File
What you need to know:
Eagle Africa Insurance now owns part of Guardian Insurance Brokers of Malawi and Pace Insurance Brokers of Zambia.
Kenyan insurance broker Eagle Africa, has bought unspecified stakes in two firms in southern Africa.
Eagle Africa Insurance now owns part of Guardian Insurance Brokers of Malawi and Pace Insurance Brokers of Zambia, placing the company on top of the race to become the dominant insurance broker in revenue and locations in the region.
Eagle Africa’s managing director Sam Ncheeri, confirmed the new acquisitions that stretch the company’s operations beyond Kenya, Uganda and Tanzania.
“We are eyeing additional regional markets because insurance opportunities are growing,” said Mr Ncheeri.
He, however, did not disclose the amount of money the company has set aside for expansion, or value of deals already made.
The firm joins the long list of brokerage businesses with branches in the region or planning such expansion, including Aon Minet Insurance Brokers, Clarkson Notcutt Insurance Brokers, Alexander Forbes Insurance Brokers Kenya, Liaison Group and KenBright Insurance Brokers.
The move by Kenya brokerage companies to open branches across the border comes on the backdrop of aggressive regional expansion by insurance underwriters.
This expansion will give brokerage companies continuation of synergy in working relations that have existed in the Kenyan domestic market, a condition that favours Kenyans’ dominance of regional insurance market.
Market leaders
Leading insurers like UAP, APA, Jubilee Insurance, CIC, and British-American Investment Company have announced plans to spend about $50 million to finance their regional expansion even beyond the EAC. They have all indicated a strong bias towards micro insurance.
Regional insurance regulators are keen on expanding the microinsurance products because of its ability to increase insurance penetration faster, according to Nelson Kuria, the CEO of CIC Insurance Group in an earlier interview.
Kenyan firms are taking advantage of low levels of penetration of insurance services in the region. The country dominates with a penetration rate of 3 per cent compared with a regional penetration average of less than 1 per cent.
The growing middle class and discovery of oil and gas in the region are among key drivers of insurance business that has precipitated a scramble for the regional market.
Information communication technology-led innovation such mobile phone platforms that allow one to buy policies and firms to settle claims faster have also influenced this expansion.
It is also the result of stiff competition in the local market that has 161 insurance brokerage companies, according to the 2010 annual report of the Insurance Regulatory Authority serving 45 insurance companies.
Competition has led to price undercutting that affects revenue levels of all the players in the insurance chain, a motivation to explore markets that can generate revenue.
