Germany’s Allianz plans to pay $35 million for 98 percent stake in Nigerian insurer Ensure Insurance in a push for growth in Africa, where many people are uninsured.
Foreign insurers are banking on growing premiums as the continent develops its infrastructure and a consumer class demands protection from risk.
Allianz said that it would acquire the stake from UK-based holding company Greenoaks Global Holdings. Ensure Insurance offers life and non-life cover to businesses and retail clients and generated 11 million euros ($13 million) in gross premiums last year.
The Allianz group has operations in 16 African countries and views the Ensure acquisition as an opportunity to tap into Nigeria’s strong demographics and economy.
“The transaction gives Allianz access to the fifth-largest insurance market in Africa and is in line with our strategy to capture long-term growth opportunities on the continent,” said Allianz Africa spokeswoman Bettina Sattler.
“It is also a market with significant entry barriers, which is another reason why this acquisition is a great opportunity for us. Entering Nigeria with a team that knows the market was essential for us.”
Allianz expects the acquisition to close this year and said it intends to retain Ensure’s management team.
The german insurer plans to focus on property and casualty insurance, particulary underwriting industrial and speciality risk in the energy sector as well a large complex risks such as infrastructure.
“In the past two years, we have been quite visible in Nigeria, sharing our risk-management expertise in power, oil and gas, as well as cyber insurance,” Sattler said.
“Now that we have a company locally … the retail sector is another growth sector for us.”
Allianz follows British insurer Prudential which last month bought a majority stake in Nigeria’s Zenith Life to gain access to the African country’s fast-growing insurance market.
South African insurer Liberty Holdings, which bought remaining shares it didn’t already own in Nigeria’s Total Health Trust in August 2015, said in February that it would acquire a 75 percent stake in an unidentified Nigerian long-term insurer for 160 million rand ($12 million).
France’s AXA acquired Nigeria’s fourth-largest insurer Mansard Insurance three years ago.