Senior managers employed at Jubilee Allianz General Insurance Kenya and Sanlam Kenya's general insurance subsidiary will compete for the same roles once the two businesses are merged, with those left out to be declared redundant.
The draft business transfer agreement between Jubilee Allianz General Insurance Kenya and Sanlam General Insurance —a subsidiary of Sanlam Kenya— shows the completion of the deal will also result in unspecified job losses in the lower ranks.
The two insurers will conduct a joint review to determine which senior employees will be retained. Those not selected to join the merged business will be declared redundant, with each company paying redundancy costs for its respective staff.
According to the agreement, affected senior employees in duplicate positions will first be issued redundancy notices informing them that their roles are being considered for merger. They will then apply to be considered for roles in the merged entity.
“The parties shall give an opportunity to the affected employees from the transferee (Jubilee Allianz) and transferor (Sanlam) to apply for the amalgamated role; the parties shall jointly determine, based on an objective criterion, which of the employees they wish to retain, subject to business needs and applicable law,” reads the agreement.
Within the period between the agreement and its conclusion, the two firms have agreed not to hire new staff or grant any management or senior employees, executives or executive directors an increase in compensation or benefits, such as bonuses, without the prior written consent of the other party.
The transaction, part of a broader Africa-wide integration between South Africa’s Sanlam Group and Germany’s Allianz SE, will see Sanlam’s general insurance portfolio in Kenya merged into Jubilee Allianz, consolidating their operations under the new Sanlam Allianz Africa structure.
The draft agreement further shows Sanlam will meet all costs associated with the termination of employees in lower ranks who decline to transition to Jubilee Allianz or whose positions are rendered redundant after the merger.
“The parties agree and the transferor (Sanlam) undertakes that before the completion date, it shall duly terminate by way of redundancy the employment contracts of all the other employees of the transferor who decline to execute their respective tripartite contract...and shall pay to such respective other employees... all accrued dues and benefits arising from their employment contracts,” the contract reads.
Employees whose positions remain will be offered new contracts with Jubilee Allianz through tripartite agreements between the two insurers and the affected staff.
The contracts will offer “terms no less favourable” than their existing employment and will recognise previous years of service, ensuring continuity of benefits.
Sanlam Kenya will receive Sh220.6 million from the deal that is valued at Sh820.6 million. The Sh820.6 million is inclusive of Sh600 million, which is the minimum solvency capital required for Sanlam General operations.
The deal marks Sanlam’s strategic exit from direct general insurance operations in Kenya, leaving it with the life business.
