German insurance giant Allianz has acquired a 98% stake in Ensure insurance. Terms of the deal where however not disclosed. Two other firms Wapic Insurance Plc and Hollard of South Africa had recently indicated an interest to acquire the company.
Why the move
The Nigerian insurance industry has several small players that lack capital to underwrite major risks. Insurance penetration in the country is quite low with less than 10% of Nigerians having any form of insurance policy. National Insurance Commission (NAICOM) which is the industry’s regulator has instituted a risk based capitalization programme which ties the amount of risk a company can insure to the size of its capital base. The policy has led to a series of mergers and acquisitions in the industry. Liberty Holdings, a South African firm acquired UNIC insurance in a deal valued at $12 million. Prudential, a UK-based firm, had last month acquired a controlling stake in Zenith Life.
Ensure Insurance (formerly known as Union Assurance) was incorporated in 1993, but began operations in 1998. In 2014, it was incorporated as a public limited liability company and acquired by GreenOak Global Holdings for $35 million. The company was subsequently rebranded to Ensure Insurance. For the financial year ended December 2016, Ensure Insurance made a gross premium income of N4.0 billion and a Profit After Tax of N1.05 billion.
Allianz , founded in 1890 is a financial services company located in Germany. Its core businesses are insurance and asset management, with more than 86 million customers worldwide. HY 2017 results show it made revenues of €66.2 billion.