South African insurance company Sanlam says it plans to finalize three or four acquisitions in other African countries this year, as a strategy to gain entrance into faster-growing economies.
“I would hope to have one wrapped up either in Mozambique or in Angola. I would hope for one or two in east Africa,” Margaret Dawes, CEO Rest of Africa for Sanlam’s Emerging Markets said at Reuters Africa Summit.
This is in line with the company’s plan to expand into North Africa and Portugese-speaking nations since it already has operations in 10 English-speaking countries in Africa.
It also aligns with its strategy to hedge against maturing market Southern Africa including Namibia, Botswana and, especially, South Africa.
According to Dawes, Sanlam’s goal is to increase its profit from other African markets to 20 percent in five years, compared to the 9 percent profit realized in 2013.
A fund of $374 million has been earmarked for acquisitions in Africa and Asia, some of which include the buy-out of Malawi-based Nico’s insurance in four countries and an increase in the controlling shares of Kenya’s Pan Africa Insurance.
Although acceptance of insurance is still low in comparison to developed countries, Sanlam’s continued expansion into other markets is an indication that Africans are gradually becoming aware of the importance of insurance cover.