APA parent sells 20pc stake to South African insurer
Saturday November 04 2023
L-R: Insurance Regulatory Authority (IRA) Commissioner of Insurance and Chief Executive Officer Godfrey Kiptum with APA Life Assurance Limited CEO Catherine Karimia and Group CEO for APA Apollo Ashok Shah having a conversation. PHOTO | COURTESY
South Africa’s Hollard International has signed an agreement to buy a 20 percent stake in Kenya’s insurance group Apollo Investments Ltd, marking the latest ownership change in the company.
The value of the proposed transaction was not disclosed.
Hollard follows Swiss Re which acquired a minority stake in Apollo in 2014. There has been a rise in deal-making in the local and regional insurance market in recent years as insurers seek to boost their capital besides expanding their operations.
“It’s an exciting time for APA because the Hollard partnership will open new doors and new avenues of growth for our business,” Ashok Shah, the chief executive of Apollo, said in a statement.
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“We’ll have access to substantial new expertise in classes of business such as motor, engineering, marine and other specialist lines of insurance, which we believe will open up a number of profitable business opportunities.”
He added that the deal will help Apollo strengthen its operations in Uganda and Tanzania besides being ready to seize opportunities in Ethiopia once regulations allow foreign investment.
The acquiring company sees the transaction as a means to expand presence in Africa.
“Partnering with APA Insurance is a giant step forward for Hollard International and will help us immeasurably in extending our footprint in Africa,” Pravin Kalpagé, the CEO of Hollard, said in a statement.
“APA has an established track record, an impressive value proposition with strong broker and customer relationships, and it shares our values around community, reliability and customer-centricity. All these elements resonated strongly with us.”
Apollo’s businesses are APA Insurance, APA Life, APA Uganda, Apollo Asset Management, Gordon Court (Apollo Centre) and Reliance Insurance, Tanzania.
APA Life is one of its subsidiaries posting a net income of Ksh533.7 million ($3.5 million) last year. This was down from Ksh552.6 million ($3.6 million) in 2021. Apollo’s operations span general and life insurance. Hollard offers similar services in South Africa, Namibia, Mozambique, Zambia, Lesotho, Botswana and Ghana. Hollard also provides specialist insurance services, offering covers to high-net-worth clients including protection of their collections and luxury items.
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The Hollard-Apollo deal follows Jubilee Holdings' recent sale of majority stakes in its general insurance subsidiaries to Allianz SE for Ksh10.8 billion ($71.5 million) in transactions that started in 2020.
ICEA Lion Insurance Holdings also sold a 24.1 percent stake to private equity firm Leapfrog Investments in 2020 for Ksh2.4 billion ($15.9 million).
Multinationals buying into Kenyan firms see the low uptake of insurance services as presenting growth opportunities. The buyers are bringing capital, expertise and new services.
At a pan-African level, Allianz SE and Sanlam Limited are forming a 10-year joint venture that brings together their interests in their local subsidiaries including Sanlam Kenya and Jubilee Allianz General Insurance Kenya.