Listed insurer and wealth management firm Liberty Kenya Holdings Ltd has entered the general insurance market in Uganda by acquiring a 51 per cent stake in East African Underwriters Ltd (Eaul).
Liberty said the acquisition will enhance Liberty’s position in the East African market and position it for further growth.
Eaul is owned by the Madhvani Group.
“This extension of the partnership will provide Liberty with a full insurance offering to enable our growth strategy of leading in our chosen customer segments in the Uganda market and East African region,” said Mike du Toit, Liberty’s Regional Executive for East and Central Africa.
Liberty announced its regional expansion on the day it said its 2015 profit would be at least 25 per cent lower than the previous year.
Liberty said its earnings in equities business have been hit by the bear run on the Nairobi Securities Exchange in 2015.
“The board of directors of Liberty Holdings wishes to announce that the company’s earnings for the year ended 31 December 2015 are expected to be at least 25 per cent lower than then earnings reported for the same period in 2014,” Liberty Holdings chairman Susan Mboya Kidero and Mr du Toit said on Friday in a joint profit warning announcement.
They noted that while the core business operations of Liberty Holdings experienced sound growth in the year, there was a general decline in the values of listed equities and fixed income securities in the markets where the group operates.
“As a result, there was a decline in asset values which negatively impacted the investment income when compared to the previous year,” they said.
Liberty Kenya Holdings, which is the parent company of Liberty Life Assurance Kenya Limited and Heritage Insurance Company Kenya Limited, posted a Sh1.15 billion profit after tax for 2014, a 3.9 per cent increase compared to Sh1.1 billion for 2013.
Following its Uganda foray, Mr Du Toit said Liberty’s strategy is to grow its regional business and tap the insurance potential in Uganda.
Uganda’s insurance penetration is among the lowest in sub-Saharan Africa at 0.85 per cent, according to the Uganda Insurance Regulatory Authority.
“It (Uganda business) will support our service capabilities for clients and intermediaries who operate across the East African region, thus improving service delivery and timeliness in responding to client needs,” said Heritage Insurance Kenya Managing Director Godfrey Kioi.
Liberty holdings has two operating segments: Long term business and general insurance business.