NCBA Group PLC has announced its intention to acquire 100% shares of AIG Insurance Kenya as it bets big on insurance business. The acquisition of the over 50-year-old insurance company, which has dominated insurance business for years, will be a landmark transaction in Kenya’s financial services industry.
NCBA which was formed out of a merger between NIC Group and CBA Group in 2019 has over the last four years grown to become the third largest banking group in East Africa, serving over 63 million customers and with a network of 107 branches.
Commercial banks in Kenya have been moving into the insurance business in recent years to seize the opportunities presented by low rates of insurance penetration under what is technically known as bancassurance. NCBA will take up the two-thirds of AIG shares that it doesn’t already own, NCBA said in a statement.
Speaking on Monday, 25 September in Nairobi-Kenya,NCBA Group Managing Director John Gachora said insurance is increasingly becoming a basic financial need for the type of customers that NCBA serves.
“We believe that by bringing together NCBA’s physical and digital distribution platforms and AIG Kenya’s insurance capabilities, we will accelerate towards our ambition to become a universal bank that addresses a full set of our customers’ financial needs,” NCBA Group PLC Managing Director John Gachora said.
AIG Kenya serves customers across the East Africa region. NCBA serves customers in four countries which includes Kenya, Uganda, Tanzania and Rwanda. As a regional banking Group, NCBA is poised to take advantage of AIG Kenya’s breadth and scale to further entrench itself in the markets in which it operates.
“The announcement of intent by NCBA and AIG is an exciting development as it represents an opportunity to continue to build on AIG Kenya’s sold platform,” AIG Kenya CEO Stella Njunge said. “Through a combination of NCBA’s customer-centric product offering and their cutting edge services, customers will access a variety of insurance products and services at large.”
The execution of the transaction is subject to necessary due diligence, approvals from the Boards of NCBA, AIG Kenya, AIG Group and other requisite banking, insurance and other regulatory authorities.
NCBA, which has held its minority stake in AIG Kenya for the last 18 years, has been impressed by the company’s steady revenue growth, said NCBA’s chief executive, Mr John Gachora.