Companies

Jubilee Insurance extends market lead over Britam

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Jubilee chairman Nizar Juma (left) with the insurer’s CEO Patrick Tumbo when they announced the firm’s results June 10, 2014. Photo/FILE

Insurance group Jubilee has widened the market share lead over its closest rival Britam, helping it cement its position as Kenya’s biggest underwriter, latest figures by the regulator show.

Jubilee’s market share stood at 12.8 per cent as at March this year compared to the combined market share of Britam and Real Insurance at 10.4 per cent, according to the Insurance Regulatory Authority (IRA) figures.

The gap between Jubilee and Britam has widened to 2.4 percentage points at the end of the first quarter from 0.8 percentage points as at the end of 2013, based on the firms’ total underwritten premiums.

The insurance industry saw gross underwritten premiums grow by nearly a fifth in the first three months of the year to Sh43.2 billion from Sh36.8 billion recorded by the end of a similar period in the previous year.

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The IRA data show that Jubilee controlled premiums worth Sh5.5 billion compared to the combined entity of Britam and Real (Sh4.5 billion), CIC (Sh3.5 billion), ICEA Lion (Sh3.2 billion), UAP (Sh2.9 billion) and APA with policy covers valued at Sh2.7 billion.

CIC Insurance is ranked third in the IRA report with a market share of 8.1 per cent followed by ICEA Lion (7.5 per cent), UAP (6.8 per cent) and APA with 6.3 per cent to complete the list of Kenya’s top-tier underwriters.

The top three insurance firms have in recent years raised billions of shillings in new capital to expand their businesses, grow earnings and defend market share in the highly competitive financial services market.

Jubilee has announced it will, for the first time since listing at the Nairobi bourse, hold a rights issue this year to raise cash to fund acquisitions as grow its market share.

Britam last week opened a Sh4 billion five-year corporate bond issue to be used for acquisitions and investments in real estate, private equity and regional expansion.

READ: Britam bond first tranche targets Sh4bn in a month

CIC Insurance plans to raise Sh3 billion through a corporate bond issue and an unspecified amount through a shareholders’ cash call to fund the firm’s expansion plan through investments in real estate and entering new regional markets.

“We have planned a rights issue this year. We are looking for mergers and acquisitions and are already talking with several companies,” Jubilee Holdings chairman Nizar Juma said at the firm’s AGM last week.

“A number of companies are announcing mergers and takeovers and this may result in a de-facto attempt to challenge our leadership position,” he added.

Britam in December acquired 99 per cent of Real Insurance in a cash and share swap deal valued at Sh1.4 billion. It has also acquired a 25 per cent stake in property development firm Acorn as it races for a share of the real estate market.

The listed financial services firm said it was drawn to Real because it now expands Britam’s reach to Tanzania, Mozambique and Malawi, bringing its geographical presence to seven countries.

Britam is set to complete the Real acquisition by end of this month and has signalled its thirst for fresh takeovers.

“After completion of the Real Insurance acquisition, Britam’s regional expansion strategy shall be further bolstered,” said Benson Wairegi, group managing director at Britam.

Britam’s market capitalisation now stands at Sh34 billion, nearly four times that of the smallest listed insurance firm Liberty Kenya which is valued at Sh9.1 billion.

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