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Corporate

Britam seeks Sh300m stake in Nigerian firm

Britam building situated at Upper Hill, Nairobi. The firm is eyeing about 30 per cent of Continental Re Kenya Ltd. Photo/FILE
Britam building situated at Upper Hill, Nairobi. The firm is eyeing about 30 per cent of Continental Re Kenya Ltd. Photo/FILE 

Britam is mulling over acquiring a minority stake in a Nairobi-based reinsurer as part of its diversification strategy.

The Nairobi-bourse listed firm is eyeing about 30 per cent of Continental Re Kenya Ltd, people familiar with the backroom process and who cannot be named given the sensitivity of the matter told the Business Daily.

The sources estimate the deal to be worth Sh300 million in what values Continental Re, a fully-owned subsidiary of Lagos-based Continental Reinsurance, at Sh1 billion.

Britam CEO Benson Wairegi declined to comment on the matter and did not respond to our e-mail enquiries.

Continental Re opened shop in Nairobi in 2012 seeking a slice of the reinsurance market dominated by Kenya Re. Other players are Africa Re, East Africa Re, ZEP-Re, Swiss Re and Ghana Re.

Britam’s entry into the reinsurance business is strategic given Kenya Re’s local concession, which guarantees the company 18 per cent of the country’s re-insurance premiums, is set to expire next year.

The Nigerian Stock Exchange-listed reinsurer began operations in Kenya as a branch in 2007 before converting it into a subsidiary in a bid to cash in on the growing uptake of insurance products and the subsequent need for reinsurance.

Reinsurance firms underwrite risks taken by insurance firms.  

Continental Re Plc. made 11.3 billion naira ($70.1 million, Sh6 billion) in gross premium income in the nine months to September last year.

It has operations in 43 African countries in general and life business and East Africa accounts for four per cent of Continental Re’s business while Nigeria makes up two-thirds of revenue.

The Kenyan unit’s gross premiums was 1.6 billion naira ($10.2 million, Sh882.9 million) in 2012 and made a loss of 65.2 million naira ($0.4 million, Sh34.6 million), according to Continental Re Plc’s annual report.

Kenya’s gross premiums in the reinsurance category grew by nearly a fifth to Sh12.4 billion last year compared to Sh10.4 billion in 2012, latest data from the Insurance Regulatory Authority shows.

Britam has of late been on an acquisition spree to consolidate its market share and broaden revenue sources.

The listed financial services group acquired 99 per cent of Real Insurance in December last year in a cash and share swap deal valued at Sh1.4 billion.

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