Allianz has entered into an agreement with Janashakthi Insurance to acquire 100 percent of its subsidiary Janashakthi General Insurance (JGIL) for LKR16.4bn (US$106mn).
The acquisition makes Allianz Insurance Lanka one of the country’s largest general insurers, with a market share of approximately 20 percent. This transaction also represents one of the largest investments into Sri Lanka.
The acquisition will deliver a range of strategic benefits to all stakeholders. These include; strengthening Allianz Lanka’s customer reach and service capabilities; Janashakthi’s general insurance portfolio complements Allianz Lanka’s existing business, and represents a strategic fit across both corporate and retail lines. In addition, Allianz will bring its core capabilities in data science and technology to deliver superior experiences for all customers. Together with its 6 percent share in the country’s life insurance market, the acquisition positions Allianz Lanka as one of the strongest protection leaders in the country. Janashakthi Insurance will continue to focus on its life insurance portfolio in order to strengthen its presence in the Sri Lankan life insurance industry, and remains committed to its vision of lighting the lamp of insurance in every home and workplace.
Janashakthi Insurance has been operating in Sri Lanka for over 23 years focussing on motor, fire and health protection for individuals and corporates. The Sri Lankan general insurance market has posted a compound annual growth rate of 12.1 percent during 2010 to 2016. This is expected to accelerate to 12.5 percent by 2020, driven by improving trade and macro-economic conditions, as well as increased insurance penetration.
The transaction is subject to regulatory approval and is expected to complete in the first quarter of 2018.
Allianz’s regional CEO for APAC, George Sartorel said: “This transaction provides a highly attractive opportunity to transform our market presence in Sri Lanka, while accelerating our growth agenda in the Asia Pacific region.”
Surekha Alles, managing director, Allianz Insurance Lanka, said: “We’re excited about our future ahead, and look forward to welcoming Janashakthi customers and employees to the Allianz family. Together, we will be well-placed to seize growth opportunities in Sri Lanka, and generate enduring benefits for our customers and stakeholders.”
Prakash Schaffter, managing director, Janashakthi Insurance, said: “I am convinced that this amalgamation with Allianz represents the natural progression of JGIL’s evolution from a small, home grown general insurance business to a leader in the industry, while reflecting the strength of the business we’ve built over the last 23 years. Becoming part of Allianz’s larger organisation also provides many new opportunities for our employees and our customers. We share many of the same values, and we are happy to see our commitment to customer service excellence and belief in driving process enhancement and digitalisation reflected in Allianz’s priorities and strengths.”