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DealMakers AFRICA Q2 2022


Creating a


Fintech is emerging as a major force, shaping the structure of financial services across sub-Saharan Africa and proving to be an integral enabler of bolstering financial inclusion. The opportunity that these new start-ups afford – together with a growing working and educated population, an improving internet connection and technological advancements – is reshaping the continent. The insurance sector is but one, scrambling to adapt to this disruption, resulting in consolidations and partnerships to take advantage of a new phase of growth.

During H1 2022, DealMakers AFRICA captured 250 deals across the continent involving investment by private equity and venture capital funds, predominantly in start-ups. Of these, 34% were fintech/e-commerce. Drilling down further, 3% were in the insurance space. Of the total 384 transactions recorded for H1, 11 involved insurance as the target.

Africa remains desperately under-insured, with a penetration rate of less than 2.78%, with penetration significantly lower than the global average of 7.23%. (McKinsey: Africa’s insurance market is set for takeoff, 2020). In its report, McKinsey highlights six primary insurance regions in Africa: Francophone, Anglophone West Africa, Southern Africa, North Africa, East Africa and Angola. South Africa represents a massive part of Africa’s insurance market, accounting for approximately 69% of total premiums, followed by Morocco (6.6%), Kenya (3.3%), Egypt (2.8%) and Nigeria (2.4%).

According to the Dublin-based Research and Markets firm report (Africa Insurance Market, June 2022), Africa’s insurance market is projected to grow at a compounded annual growth rate of 7% to 2026, raising the value beyond the US$70 billion recorded in 2020. 

The attraction of this trend in the insurance industry for regional and international insurance firms was evident as early as December 2021, when South African-based Sanlam indicated a potential tie-up with Frankfurt-listed heavyweight, Allianz. In May this year, the parties announced a joint venture partnership whereby each would contribute most of their respective African operations (spanning a total of 29 countries) to a long-term commitment of at least 10 years, creating the largest pan-African insurance player worth c.€2 billion.

The terms of the agreement will see Sanlam take the controlling interest of 60% in the JV, with Allianz having the ability to increase its 40% stake to a maximum of 49% over time. Through its wholly-owned subsidiary, Sanlam Emerging Markets, Sanlam has life and general insurance, as well as investment management operations in more than 30 countries including Morocco, Côte d’Ivoire, Nigeria and Botswana. Sanlam will exclude South Africa, Continental Re and the Namibian subsidiaries, but will include its 90% shareholding in the SAN JV. The Namibia operations will be contributed to the JV at a later stage.

Allianz’s insurance portfolio spans 11 countries, including operations in Egypt, Kenya, Cameroon and Uganda. Allianz will acquire the outstanding 10% stake in SAN JV from South African Santam for €120 million, which it will contribute to the new joint venture together with all its African assets, including its minority stake in African Reinsurance and its shareholding in Jubilee’s general insurance businesses in Kenya, Uganda and Burundi. 

Sanlam and Allianz will leverage each other’s strengths to unlock synergies – with Sanlam’s expertise in Africa, the strength of its digitally enabled distribution network and Allianz’s global capabilities and insurance solutions, the aim of the partnership is to increase life and general insurance penetration, accelerate product innovation and drive financial inclusion in high-growth African markets. There is real potential to increase cost efficiencies and profit margins, which are predicted to be huge. According to projections, this scale play is expected to rank among the top three in the majority of the markets in which it is to be present. The chair of the partnership will rotate every two years.

Other large players in this African space jostling for market share include (but are not limited to) Mauritian insurance company, MUA, South Africa’s Old Mutual, French multinational AXA, and Moroccan Wafa Assurance.
Sanlam’s company announcement expects that the effective date of the proposed transaction will be within 12-15 months from May 2022, as approvals from the competition and regulatory authorities and any customary conditions required by each jurisdiction must first be satisfied. Judging by the number of legal advisers involved, this in itself will be a mammoth task!

Despite the uncertainties and slow-down induced by the pandemic, the combination of a burgeoning innovation ecosystem across the insurance sector, an increasingly confident regulatory network and solid economic growth are all contributing to a strong outlook for insurance across the continent. 

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Advisers to the transaction were:

Financial Advisers: JP Morgan and Standard Bank.

Legal Advisers: Webber Wentzel, Bowmans, Slaughter & May, Allen & Overy, ADNA (Morocco, Guinea and Côte d’Ivoire), Noor Partners, Al Tamimi & Co (Egypt), Matouk Bassiouny (Egypt), AF Legal Law Firm (Senegal), MLO (ALN Madagascar), G. Elias (Nigeria), Anjarwalla & Khanna LLP (Kenya & Tanzania), Chazai Wamba (Cameroon), MMAKS Advocates (Uganda), Linklaters (Germany), Linklaters (Lisbon), Linklaters (France), Linklaters (Luxembourg), Bentsi-Enchill, Letsa & Ankomah (Ghana), Desai Law Group (Botswana), Henwood and Company (eSwatini), Kleingeld and Mayet (Lesotho), Savjani & Co (Malawi), Musa Dudhia & Co (Zambia), Scanlen and Holderness (Zimbabwe), K-Solutions and Partners (Rwanda), BLC Robert (Mauritius), Engling, Stritter & Partners (Namibia).

Transactional Support Services: PwC

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