Britam, which has presence in Kenya, South Sudan, Rwanda and Uganda, says the consultants are expected to integrate Real Insurance’s operations in Kenya, Tanzania, Malawi and Mozambique to form one group.
Consultants are expected to advise Britam on how to deal with the extra employees (and assets) in Kenya, the only country where businesses interests overlap.
Britam expects to pick the consultant(s) in coming months.
Financial services group Britam is in talks with global consulting firms Mckinsey and Acentia to help it merge its business with operations of Real Insurance, which could result in job losses for some staff.
Britam, which has presence in Kenya, South Sudan, Rwanda and Uganda, says the consultants are expected to integrate Real Insurance’s operations in Kenya, Tanzania, Malawi and Mozambique to form one group.
It is also seeking integration of its IT systems, rebranding of assets and even synchronising price quotations.
More importantly, the consultants are expected to advise Britam on how to deal with the extra employees (and assets) in Kenya, the only country where businesses interests overlap.
“Kenya is the only country where the two businesses have interests and integration is likely to be more complex. For instance, you cannot have two departments of human resource (employees) in Kenya doing the same thing.” said the CEO, Benson Wairegi, hinting at possible layoffs or redeployment of staff.
Britam expects to pick the consultant(s) in coming months.
Real Insurance has 13 branches across the country including in towns such as Nairobi, Nyeri, Mombasa, Eldoret and Kisumu, town where Britam also has a presence.
This overlap of offices, and employees, is what is set to leave Britam with a big headache.
“Integrating of two stand-alone businesses is a complex matter and that is why we are holding discussions with consultants like McKinsey and Acentia to advise us,” he added.
Acentia is a global technology and management consulting firm whose high profile clients include the US Department of Defence and Internal Revenue Service (IRS).
The buyout of rival Real Insurance will see Britam pay Sh825 million in cash and issue new shares worth Sh550 million to the shareholders of the 36-year-old insurer.
The transaction will lift Britam closer to industry leader Jubilee Insurance, given that it will now have a combined market share of 10.9 per cent compared to the Jubilee’s 11.9 per cent.
Britam could simply absorb the new employees or it could redeploy some of the Real workers to other branches where there are overlaps.
However, assigning duties to employees who have a wider role such as regional managers could prove a problem since they already have similar staff in both firms.
While announcing Britam’s full year results last week, Mr Wairegi said the company had formed committees – including one for HR -- to deliberate on the integration process.
“It is important that we have such committees since people issues can be very sensitive,” he said last Friday while announcing that Britam’s after-tax profit had grown 5.5 per cent to Sh2.65 billion.
In 2011, Kenya Commercial Bank contracted McKinsey to undertake a restructuring plan, in what led to the laying off of top and middle level staff.
The exercise trimmed the bank’s executive team to less than 10 from 22 in a move aimed at checking check staff costs that rose from Sh4 billion in 2006 to Sh9.3 billion in 2012.
