British firm buys out Blue Shield offshoot
What you need to know:
- British ambassador to Kenya Christian Turner said the entry of Prudential was part of a “new wave” of investments worth 100 million pounds (Sh15 billion) in various sectors that will be announced soon.
- National Treasury Cabinet Secretary Henry Rotich said investing in life insurance was part of mobilisation of savings that can be channelled towards infrastructure development since they are long-term investments.
A leading British life insurance company has bought Shield Assurance Company Ltd.
The deal announced Tuesday, in which Prudential Plc is taking over a local insurer, is the first such major take-over by foreign investors.
Shield Assurance, which deals in life cover, is an offshoot of Blue Shield Company that is currently under statutory management.
Prudential with operations in the UK, America and Asia will invest Sh1.5 billion in Shield Assurance over the next 12 months. It plans to hire 4,000 agents by 2020.
YOUTHFUL POPULATION
Describing the deal as a milestone, Prudential Africa boss Matt Lilley said it “creates the first step towards formation of new business in East Africa. The life insurance market is growing at 20 per cent every year, but represents a tiny fraction of Kenya’s expanding economy. Therefore, we see exciting opportunities.”
Kenya becomes the second country after Ghana where Prudential has set up operations. The firm with $770 billion (Sh66.99 trillion) and which is listed in London, New York, Hong Kong and Singapore is betting on expanding the middle class and the largely youthful population to grow.
The firm operated in Kenya up to the 1970s when it pulled out due to a nationalisation programme that saw many companies taken over by Africans. Mr Lilley said Prudential wants to make Kenya the life insurance hub in East Africa.
“The investment being announced today will allow us to take the business to the next level, creating innovative new products and expanding our distribution to allow us to serve more customers,” Shield boss Charles Mang’ee said.
British ambassador to Kenya Christian Turner said the entry of Prudential was part of a “new wave” of investments worth 100 million pounds (Sh15 billion) in various sectors that will be announced soon.
National Treasury Cabinet Secretary Henry Rotich said investing in life insurance was part of mobilisation of savings that can be channelled towards infrastructure development since they are long-term investments.
He said a new Bill that will improve the regulation of insurance companies by introducing the best international practices, will soon be tabled in Parliament.
Insurance Regulatory Authority CEO Sammy Makove says Prudential’s entry into Kenya is a big boost for life insurance, whose current penetration is only 1 per cent.
