The Competition Authority of Kenya (CAK) has approved the acquisition of the medical insurance business of Allianz Kenya by Jubilee Health Insurance set to be the second transaction between the two insurers.
Jubilee Health, wholly owned by Jubilee Holdings Limited, will acquire Allianz Insurance Company Limited’s medical insurance business, amid a move by Allianz Kenya to cede its medical insurance business.
“The proposed transaction involves the acquisition of control of the medical insurance business of Allianz Insurance by Jubilee Health,” CAK stated.
“The transaction therefore qualified as a merger within the meaning of Section 2 and 41 of the Competition Act No. 12 of 2010. The post-merger shareholding will not change since the transaction involves the acquisition of the business, not share capital.”
The transaction comes after the global general insurer Allianz SE completed the acquisition of a majority stake in Jubilee General Insurance (property and casualty insurance) owned by Jubilee Holdings Limited.
Jubilee Group signed an agreement in 2020 to sell stakes ranging from 51 percent to 66 percent in its general insurance subsidiaries in Kenya, Tanzania, Uganda, Burundi and Mauritius for a total of Sh10.8 billion.
Jubilee Holdings however retained ownership of its life and pensions operations and its medical insurance business in Kenya, Uganda and Tanzania.
The transactions to buy the general business in the five countries has seen the follows as Allianz SE moves to drop its medical insurance business.
Jubilee Health Insurance was the third insurer in market share in the three month to March with 11.1 percent control in gross premiums after Britam Life Assurance and ICEA Lion Life Assurance, according to data by the Insurance Regularity Authority (IRA).
The data show Jubilee Health and Allianz Insurance medical insurance had a market share of 18.48 percent and 0.23 percent respectively as of December 2020 with a combined market share is 18.71 percent.
“The target’s market share is low and, therefore, post-merger the market structure and concentration will not significantly change to occasion competition concerns. Additionally, it is anticipated that the merged entity will face competition from the other market players controlling 81.29 percent,” CAK added.