Equity Group will lend Sh800 million to its proposed subsidiary for the general insurance business to help in funding capital and initial operating costs.
The firm plans to seek approval from shareholders next week to formally set up and operate a general insurance business in Kenya through its wholly-owned subsidiary, Equity Group Insurance Holdings.
Details of the AGM agenda show the board will also be seeking approval to give the general insurance subsidiary an Sh800 million loan to fund the share capital while the balance will take care of initial operating expenses.
The Insurance Act requires a paid-up share capital of Sh600 million to set up a general insurance company and an additional Sh150,000 registration fees, meaning about Sh149 million will be available to cater for initial operating expenses.
Equity Group mid last month announced the Insurance Regulatory Authority (IRA) had approved in principle its application to start a general insurance business.
The lender last year January made inroads into the insurance sector with the launch of the life insurance business, which promises to take strongly on insurers if early numbers are anything to go by.
IRA data for last year showed Equity's insurance subsidiary hit Sh3.84 billion gross premiums from the group credit business, becoming the second-highest insurer in underwriting the risk of customers defaulting on loans due to death or injury.
Equity Life Assurance, which closed the year with Sh405 million pretax profit, overtook Britam Life to account for 24.33 percent of the Sh15.79 billion credit life business. This was behind the market leader CIC which wrote Sh4.56 billion or 31.26 percent of this segment.
