By entering into a $100 million strategic partnership with Jubilee Holdings, the German insurance giant is clearly setting out its strategy: priority is now given to the east of the continent.

It is a particularly thin insurance heavyweight that is starting again with an acquisition campaign in Africa. After selling its shares in its subsidiaries in Benin, Mali, Togo and Burkina Faso to Sunu from Senegal in March 2019, then merging its activities in December of the same year with Sunu Centrafrika Assurances, Allianz pulled the

The German insurer has just concluded a strategic partnership with Jubilee Holdings Limited — the largest insurance group in East Africa, founded by the Aga Khan network — which targets the five African countries where Jubilee Insurance currently operates. The agreement covers Jubilee's non-life activities in Kenya, Tanzania and Uganda, and the short-term insurance segment in Burundi and Mauritius, whose control will be transferred to Allianz in exchange for 10.8 billion Kenyan shillings

For its part, Jubilee Insurance will continue its life and pension activities, as well as its medical insurance activities in Kenya, Uganda and Tanzania. The transaction is expected to be completed in the first quarter of 2021, after the approval of the regulatory authorities of the countries concerned.

In the Cima zone, regulations that do not pass

A foothold in the East, therefore, for someone competing for market share with another global giant, the French Axa, which is positioned in North Africa and West Africa (with subsidiaries in Morocco, Algeria, Egypt, Senegal, Ivory Coast, Nigeria, Cameroon and Gabon). This choice can be explained all the more since the regulatory framework is no longer favorable to it in the West of the continent.

This framework makes it difficult to maintain profitability levels in line with our expectations.

“This transaction is in line with the group's strategy as it makes it possible to achieve certain return on equity and profitability objectives. In recent years, Allianz has continued to record satisfactory profitability throughout the Cima zone (Inter-African Insurance Market Conference), including in the entities sold. However, the new CIMA regulation imposes a minimum registered capital of 5 billion CFA francs by mid-2021,” explains to Jeune Afrique Nandini Wilcke, regional director for mergers, acquisitions and transformation at Allianz Africa

He continued: “Given the size of these markets, Allianz's projections suggest that increasing regulatory capital would make it difficult to maintain profitability levels in line with the group's expectations.”

Cameroon and Côte d'Ivoire, still a priority

Decided in 2016, the reform of the capital regulations of insurers in the CIMA zone increased the share capital level of companies in the zone from 1 billion to 3 billion CFA francs (within three years), then to 5 billion in 2021.

We injected capital where it was needed

A reform that is supposed to strengthen the sector and allow the emergence of more solid players, capable of making the investments in products, technical innovations and distribution channels considered necessary for the growth of the sector. However, the cost of this reform has raised numerous concerns among local actors. In the context of the Covid-19 pandemic, she is also questioning the giants of the sector

However, Allianz assures that it has continued to invest in the Cima markets where it currently has strong positions, particularly in Côte d'Ivoire, Senegal and Cameroon. “We have injected capital where needed to meet new regulatory requirements, and we continue to develop our distribution networks to offer the best Allianz solutions to our customers,” says Nandini

The group is now present in twelve countries on the continent.

The German group, which posted a global turnover of 142 billion euros in 2019, including 663 million euros for the African continent, is thus completing the refocusing of its activities on the most successful markets. And it now hopes to reach a leading position also in the east of the continent.

In the meantime, with its foray into four new countries (Allianz Partners is already based in Mauritius), the group, managed by Olivier Bäte since 2015, has a footprint in twelve countries on the continent. Nine, under its Allianz Africa branch