Allianz has agreed to acquire an 8 percent stake In Africa Re in a bid to increase its presence in fast-growing African markets.
Under the terms of the agreement, Allianz will pay a total cash consideration of $81mn, valuing the African reinsurer at more than $1bn and making Allianz one the largest shareholders in the company.
Through cooperation and innovation in various areas, Allianz and Africa Re aim to jointly support insurance penetration in Africa and the economic development of the continent.
The partnership, built on mutual business support, will enable co-operation in areas of reinsurance, business development, sharing of best practices, risk management tools, as well as training and technical support, especially in emerging areas and underserved markets.
Africa Re was founded in 1976 by the member states of the African Union and African Development Bank (ADB) and has operations across the continent. It conducts business in more than 60 countries and territories and has a strong market share of the African reinsurance market, particularly in Kenya and Nigeria.
In 2017, the reinsurer generated gross written premiums of EUR622mn and net income of EUR73mn.
Commenting on the transaction, Allianz board member Niran Peiris remarked: “Having identified Africa as one of the future growth markets, we continue to invest step-by- step in the continent.”
“This investment in Africa Re is a major milestone for Allianz’s long-term growth strategy in Africa.”
Africa Re group managing director and CEO Corneille Karekezi added: “This partnership with Allianz Group, a reliable and strong partner with a global network, particularly in agriculture and the emerging field of cyber insurance, will definitely strengthen Africa Re’s capacity to offer its clients services of higher quality,”
“This partnership with Africa Re is a strategically complementary one for both companies, as well as being beneficial to our clients on the continent, who can rely on the support, experience, and cooperation of both Allianz and Africa Re,” Peiris concluded.