A consortium led by city advocate Richard Omwela is acquiring a 51 percent stake in Monarch Insurance Company from Moroccan conglomerate Holmarcom Group at an undisclosed sum.
The consortium comprising Ondoba Limited, Kenyoro Limited and Equico Thirteen Limited is buying out Holmarcom, which is exiting Monarch after three years, having acquired its stake in July 2021.
The deal will expand Mr Omwela's interest in Monarch, with Business Registration Service data showing the businessman owns a 50 percent stake in Equico that is already an existing shareholder in the insurer.
Equico invests in the financial services sector including insurance while Ondoba is a new holding company incorporated for the sole purpose of investing in the financial sector.
Kenyoro also invests in the financial services sector. The Competition Authority of Kenya (CAK) has approved the transaction.
"This approval has been granted on the finding that the transaction is unlikely to negatively impact competition in the market of provision of insurance services, nor elicit negative public interest concerns,” CAK said in a statement.
Monarch is involved in the provision of general, life and motor insurance products in Kenya with its general category covering travel insurance, personal accident insurance, home insurance, medical and property insurance, liability plans and marine cover.
The insurer ranks as small by market share and forms a grouping of underwriters with modest stakes in the industry but who when combined control a 51.4 percent market share in the general insurance category.
APA Insurance, Old Mutual and CIC General are the most significant market leaders in general insurance with stakes of 9 percent, 8.7 percent and 8.4 percent respectively.
Monarch Insurance forms part of the Monarch Group, associated with businessman Jared Kangwana and which also owns Maisha Microfinance and real estate properties including Chester House which is located in Nairobi’s central business district.
The exit of Holmarcom from Monarch Insurance is part of the recent trend where financial services players have acquired underwriters.
Earlier this year for instance, NCBA Group announced the completion of its acquisition of a 66.67 percent stake in AIG Insurance Kenya.
The deal which made AIG Kenya a wholly owned subsidiary of NCBA Group is set to position the lender into offering a wider range of financial services.
Allianz’s acquisition of a majority stake in Jubilee General Insurance in 2021 was meanwhile representative of a cross-industry deal which expanded the market share of the German multinational in the region.
Other deals in the industry include the 2017 acquisition of Shield Assurance Company by Prudential Plc which gave the latter entry into the Kenyan market.
