Britam to buy Real Insurance in a share deal

Britam building situated at Upper Hill in Nairobi. FILE
Britam building situated at Upper Hill in Nairobi. The firm intends to purchase 99 per cent of Real Insurance. FILE 

Financial services firm Britam has acquired Real Insurance in a cash and share swap deal that will give it a presence in southern Africa.

The Nairobi Securities Exchange -listed company, which has interests in insurance, real estate and asset management, disclosed over the weekend plans to purchase 99 per cent in Real Insurance.

“Part of the consideration is be satisfied by an issue of shares in Britam to the shareholders of Real,” said Britam in a public notice without giving details.

The firm says the acquisition is informed by its quest to get a larger share of Kenya’s general insurance like car and house and a presence in more African countries.

Britam has a presence in South Sudan and Uganda, but it derives more than 90 per cent of its earnings from Kenya and plans to change this structure in the coming years as the subsidiaries mature.

This means that Real Insurance will give it a presence in Tanzania, Malawi and Mozambique.

An acquisition provides an easy solution compared to a start up, which could involve buying land, putting up buildings, hiring local staff, seeking regulatory approval and struggling to fight for market share against established rivals.

Britam on November 14 announced a 25 per cent stake in property development firm Acorn. as it races to boost its presence in the real estate market.

Its ambitions to rump up foreign subsidiaries mirror the rush by local insurers including UAP Insurance, Jubilee Insurance and CIC Insurance to open units outside Kenya.

While Kenya’s insurance market has 45 players, the neighbouring countries have few insurers, attracting more Kenyan firms like Britam.

Britam’s net profit rose 28.7 per cent to Sh2.1 billion in the six months to June, helped by capital gains in its equity portfolio.