South African financial services group, Sanlam Emerging Markets (SEM) has added short term general insurance services such as vehicle and household insurance, to its life insurance business in Ghana.
This is made possible following a 40 percent shareholding acquisition of Ghana Stock Exchange (GSE)-listed Enterprise Insurance Company (EIC) for R240 million ($21.4 million).
“The transaction brings together two great financial services players with nearly 200 years of doing business in Africa, and holds much promise for the future of both groups,” said Trevor Trefgarne, Enterprise Group Chairman.
Prior to the new insurance investment, Sanlam already owns considerable stakes in Enterprise Life and Enterprise Trustees.
The acquisition which is still subject to regulatory approval comes a day after Sanlam declared that it was buying 28.7 percent stake of Afrocentric Healthcare Assets Proprietary for about R700 million ($62.4 million). The acquisition will see Sanlam own 27 percent in Medscheme, South Africa’s largest health risk management services provider.
But why is Sanlam making additional investment in Ghana at a time when the country’s economy is facing severe challenges?
Chief Executive at Sanlam Emerging Markets, Heinie Werth said his company is looking beyond the present economy predicament of the West African nation which has been one of its successful stories.
“I agree Ghana is going through challenges. If you look from a bigger perspective, there is still a lot of companies who invest in Ghana. There’s still confidence,” Werth said.
According to Sanlam ,Ghana’s insurance market has good prospects given the current insurance penetration which stands at about 1.1 percent and average market growth of 26 percent over the past five years.
Werth said Sanlam’s partnership with EIC, Ghana’s largest independent insurer, will further help the company increase its economic interest in a rapidly growing and underpenetrated insurance market.
In the future, Sanlam hopes to offer asset management services in Ghana.
In the first half of the year, Sanlam reportedly has about R3billion ($268m) in discretionary capital. The two deals it has invested in leaves it with R2billion ($178.4 million) for future investments which would likely be in African countries where it has set his eyes on. These countries include Angola, Mozambique and Zimbabwe.
“We would like to do something in all these countries in the next 12 to 18 months,” Werth said.
