Sanlam General Insurance Kenya is set to merge with Jubilee Allianz General Insurance after receiving regulatory clearance, marking part of the strategic alliance between their parent companies.
The merger will see Sanlam General, which is part of Sanlam Kenya, transfer part of its assets and liabilities to Jubilee Allianz General Insurance. Sanlam Kenya has disclosed the impending deal in its latest annual report.
Sanlam Kenya CEO Patrick Tumbo said in a phone interview that the Insurance Regulatory Authority (IRA) has approved the merger. The insurer’s board approved the merger on October 15 last year and submitted requisite documents to the IRA for approval.
“There is a merger in the offing between Sanlam General and Jubilee Allianz General Insurance. It is yet to happen, but we have now gotten regulatory approval for the merger. Both businesses are owned by SanlamAllianz as the major shareholder,” said Mr Tumbo.
He added that the two entities are now discussing the rebrand. Jubilee Allianz General was born when Jubilee Holdings sold majority stakes in its general insurance business to German multinational Allianz SE, in 2022.
The looming deal aligns with the broader SanlamAllianz joint venture through which South Africa’s Sanlam Limited and Allianz SE — which own majority stakes in Sanlam Kenya and Jubilee Allianz respectively — intend to create a pan-African financial services group with a presence in 27 African countries.
Sanlam Kenya says as at end of December 2024, the general insurance assets to be transferred amounted to Sh2.78 billion, with 56 percent or Sh1.62 billion being government securities. The liabilities tied to these assets amount to Sh2.76 billion, mainly being the Sh2.62 billion insurance contracts.
As a result of the looming deal, Mr Tumbo said repayment of Sh1.08 billion loan that Sanlam Emerging Markets — the intermediate parent company of Sanlam Kenya — had advanced to Sanlam General to bridge the capital shortfall has been paused.
“The loan matured but relief was granted so that the merger takes place. There was no need of repaying and then reuniting the two companies and then recapitalise afresh,” said Mr Tumbo.
Sanlam Emerging Markets loaned Sanlam General on May 5, 2022 and the loan was to mature on May 5, 2025 after an 18-month extension.
Sanlam Kenya says in the annual report for 2024 that Sanlam General Insurance has received a letter of support from the parent company, SanlamAllianz, committing to provide financial support for at least 12 months.
Allianz SE and Sanlam Limited in 2023 said their joint venture, SanlamAllianz, will have a combined group equity value of approximately R35 billion (Sh254.2 billion), giving customers a broader offering of insurance products tailored to their needs.
The two firms are aiming to become top three players in terms of both market share and profitability in the markets in which the venture will operate.
