Mauritius United Assurance (MUA) has set its sights on Kenyan insurers in a fresh Ksh.3 billion (USD 30 million) investment.
The new facility follows the firm’s first entry into the country through the acquisition of a Ksh.2.2 billion (USD 22 million) stake in Uganda’s owned Phoenix Group in 2014.
Speaking during the pronouncement of the new round of investing, MUA Chief Executive Officer for Kenya and East Africa Ashraf Musbally said the insurer in keen on leveraging on its solid position on the continent to drive-up expansion through acquisitions.
“Surprisingly, Kenya is our smallest operation where we have less than 1 percent of the total industry and hence our reasons for further investments. This will be our largest investment in the country,” he said.
The MUA Group makes up Mauritius largest insurer whose market cap was valued at Ksh. 9 billion (USD 90 million) as of March 2019 to solidify its all time top 10 listing on the Stock Exchange of Mauritius.
The Mauritian insurer saw its profits after taxation soar by Ksh.1 billion (USD 10 million) on increased underwriting as its gross premiums earning reached Ksh.12.2 billion (USD 122.2 million) in 2018.
Further to the growth by acquisition strategy, the insurer is focused on the adaptation of digital competencies such as e-commerce and digitization to increase on efficiency in service delivery and hold down operation-based costs.
The pronouncement of the additional investment in the country comes on the back of regressive growth of the insurance sector in the country following a depressed operating environment across 2018.
Listed insurance firms saw their 2017 earnings wiped off primarily on inflated claims and the impairment of investments in property and stocks.
Britam, which sunk to Ksh.2.2 billion net loss, for instance saw its Ksh.4 billion investment in the Housing Finance Group deteriorate to a Ksh.1 billion valuation in a share-price slide to its 48.2 percent stake.
Similarly, Sanlam and UAP Holdings saw the impairment of Ksh.574 million and Ksh.100 million respectively from the collapse of the Athi River Mining (ARM) Company. The latter further lost an additional Ksh. 300 million from the collapse of Tanzania’s Bank M.
The depressed outlook for the domestic insurance industry is likely to see MUA have an easy sweep of smaller insurers based on their lowered book valuations.
The insurer operates in a total of 6 markets on the continent to include Rwanda, Tanzania and the Seychelles.
The increased investment additionally points to growing interest by Mauritian firms for a piece of the Kenyan corporate sector and follows the entry of the State Bank of Mauritius (SBM) into Kenya’s banking sector in 2016 through the acquisition of the collapsed Fidelity bank.
SBM has since awoken the grounded Chase Bank through the buy-out of a 75 percent stake.
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