Non-banking financial services company Sanlam and insurer and asset manager Allianz have agreed to combine their current and future operations across Africa to create the largest pan-African non-banking financial services entity in Africa.
The joint venture (JV) will house the business units of both Sanlam and Allianz in 29 African countries where one or both companies have a presence; however, South Africa is excluded from the agreement and Namibia will be included at a later stage.
Sanlam and Allianz say the JV will create value for all stakeholders through greater economies of scale, a broader geographic presence, a larger combined market share and a more diversified product offering.
The JV will result in the largest pan-African insurance player being formed and it is expected to be ranked in the top three in the majority of the markets where the entity will operate, according to Sanlam and Allianz.
The new entity is expected to have a combined total group equity value in excess of R33-billion.
Combining Sanlam’s expertise in Africa with Allianz’s global capabilities and insurance solutions – particularly for multinational businesses, the partnership aims to increase life and general insurance penetration, accelerate product innovation and drive financial inclusion in high-growth African markets.
“. . . the proposed JV will . . . strengthen our leadership position in multiple key markets that are core to our Africa strategy, building quality and scale where it matters. Allianz[’s] expertise and financial strength will add tremendous value to our businesses,” says Sanlam group CEO Paul Hanratty.
“. . . Sanlam’s capabilities extend our local reach and market penetration and the JV allows us to establish leading positions in key growth markets for Allianz,” says Allianz management board member Christopher Townsend.
He adds that Sanlam shares Allianz’s values, its purpose of securing the future for its clients and Allianz’s long-term, generational approach to growing in new markets.
The CEO of the combined entity will be named in due course, while the chairpersonship of the JV partnership will rotate every two years between Sanlam and Allianz.
The JV agreement is subject to certain conditions precedent, including but not limited to the receipt of required approvals from competition authorities, financial and insurance regulatory authorities and any customary conditions that Sanlam and/or Allianz would be required to fulfil for each jurisdiction.