APA Insurance hires former Jubilee boss as CEO

The leadership mantle at APA Insurance has changed hands after the firm tapped a former Jubilee Insurance CEO as its head.
This comes after Ashok Shah was elevated as CEO of the firm’s holding company — Apollo Investments — and his place taken by Simon Clayton who will be unveiled on Wednesday.

Mr Clayton joined the local insurance firm from United Kingdom’s insurance firm LFC Shield and he served as CEO of Jubilee Insurance for one year in 2007. “Mr Clayton has taken over as the CEO at APA Insurance. I have been appointed the Group CEO of the holding company, Apollo Investments,” said Mr Shah.

Besides APA Insurance, Apollo Investments is the parent company of Apollo Life Assurance, Apollo Asset Management Company and Gordon Court Limited— a property developer. Mr Shah has been the CEO of Apollo’s general insurance business since 1996.

The changes in the APA’s corner office come as it prepares to offer diversified micro-insurance products.

The firm commands the second largest market share in the general insurance business. In 2010, its market share was 8.81 per cent with premiums worth Sh4.6 billion compared to Jubilee’s 8.56 per cent, according to the Association of Kenya Insurers (AKI).

The company is strong in medical and personal accident businesses and it made a net profit of Sh235 million in 2010 compared to Sh175 million a year earlier.

Micro-insurance offers risk cover to the poor, and is seen as an opportunity to increase revenue because of the huge pool of uninsured low-income earners.

The executive changes also come months after Apollo’s busy season in the deal making scene that saw it offer a 20 per cent stake to private equity fund LeapFrog for Sh1.2 billion.

Apollo Investment also bought a 39.97 per cent of its stake from Pan African Insurance for about Sh850 million.

The rivals acquired the stake in 2003 after Apollo Insurance and Panafric Insurance merged their general insurance business to form APA Insurance. LeapFrog is a micro insurance investment fund formed in 2010 by the Soros Funds Management, Flagstone Reinsurance, German development bank KfW and FMO of Netherlands; it is worth Sh8.4 billion.

Pension sector
Its entry in Apollo is said to have prompted the executive changes and will result in product development leaning towards long-term life micro insurance, long-term savings through pension and asset protection.

Long-term life micro-insurance could be a game-changer in a market where most of the life and medical micro-insurance products are short-term.

The deal pointed to the potential of micro-insurance in driving insurance penetration and being the cash-cow of premium income for insurers whose annual income is dwarfed by that of their counterparts in banking and pension sectors.