Pan Africa Insurance seeks major stake in Gateway
Members of the public visit the Pan Africa Life Assurance stand during a past exhibition at KICC in Nairobi. FILE PHOTO |
What you need to know:
- The acquisition comes after Pan Africa recorded a 42 per cent drop in first half 2014 pre-tax profits blamed on a significant drop in investment returns.
- If successful, the deal will increase Pan Africa’s market share which currently stands at 3.9 per cent.
Pan Africa Insurance Holdings Limited, the holding company of Pan Africa Life Assurance is set to take over a controlling stake in Gateway Insurance group in a multi-billion deal subject to regulatory approval.
The company, controlled by South African insurer Sanlam, said on Tuesday in a cautionary statement that discussions are underway to acquire majority of Gateway’s issued shares in a bid to grow its service delivery.
“The board of directors of Pan Africa Insurance Limited wishes to advice shareholders and the general public that it has entered into an agreement with Gateway Insurance Limited which may culminate in the acquisition of a controlling stake,” the notice read.
Pan African Insurance underwrites all classes of long-term business, with the exception of industrial life insurance while Gateway Insurance specialises in general cover.
The acquisition comes after Pan Africa recorded a 42 per cent drop in first half 2014 pre-tax profits blamed on a significant drop in investment returns.
The Nairobi Securities Exchange-listed firm posted Sh495 million in earnings during the period to June after its investment returns fell by 59 per cent to Sh221 million.
If successful, the deal will increase Pan Africa’s market share which currently stands at 3.9 per cent, ranking it as Kenya’s 8th largest insurer with premiums totalling Sh1.6 billion as at March 2014.
