Sanlam Kenya Raises Its Investments at Gateway Insurance

Sanlam Kenya has raised its investments to a cumulative 914.3 million shillings after acquiring an additional 12 percent stake in Gateway Insurance.

The company had earlier on bought into the general insurer in March 2015, acquiring a 51 percent stake for 561 million shillings. The latest investment has raised its interest in the subsidiary to a new high of 68 percent.

According to the company’s annual report, it made additional 213.6 million shillings in 2016.

The Insurer had announced that it would buy additional shares in the subsidiary to help its founders comply with insurance regulations that cap ownership by individuals at 25 percent.

The move by Sanlam to raise its stake in the subsidiary signals its confidence about company’s future prospects though its earnings have deteriorated following its acquisition.

The buyout marked a change in strategy at Sanlam, which in 2011 exited the general insurance business to focus on life policies by selling its 39.9 stakes in APA Insurance for 855 million shillings.

The company later said it needed to re-enter the general insurance business if it was to get a share of economic growth driven by sectors such as construction.

This prompted the Sanlam General’s acquisition whose completion coincided with increased competition in the parent company’s mainstay life insurance business where it previously was among the largest players.

Sanlam group is one of Africa’s largest financial services providers, with a market capitalization in excess of US$ 10 billion (as at 20 June 2017) and operations in 34 African countries. Its investment management business currently approximates to US $60 billion in assets under management.