Foreign insurers eye piece of Kenya

Several international insurance companies have expressed interest in either buying stakes in existing Kenyan enterprises or setting up new outfits.

The Insurance Regulatory Authority Monday said the fast growth of the sector had been noticed by some foreign investors, and several buy-outs or buy-ins were expected soon.

“There are three potential greenfield entries into the insurance industry. Kenya’s infrastructure, which makes it a financial hub, is serving as an entry into the East African region for foreign investors,” IRA managing director Sammy Makove said.

He spoke at the Nairobi trade fair grounds on Monday, where insurance companies are exhibiting their products.

The good performance of the sector is part of the allure that is making foreign companies seek to invest in the country.

HIGHEST GROWTH

Association of Kenya Insurers boss Tom Gichuhi said: “Kenya registered the highest growth in insurance in Africa, at 20.4 per cent in 2013, according to a survey by AM Best.

It was also the second fastest after Lebanon, at 24 per cent. With this kind of growth, several foreign companies have shown interest in investing here.”

He said the requirement that caps individual ownership at 25 per cent had helped companies seeking partners to dilute their stake.

Mr Gichuhi said the industry was “moving towards consolidation in the next five years, which could result in seven strong companies controlling significant market shares”.

He added: “Most of the insurance companies are commanding between four and 12 per cent. There are no companies driving the market currently. Indications are that some of the companies are becoming big and in about five years, I foresee market shares changing substantially in favour of five to seven companies.”

The latest international company to come calling is Prudential Insurance that bought out Shield Assurance. And Phoenix Insurance is said to be on the radar of some investors from Mauritius.