Britam targets acquisitions in Africa expansion plans

Britam Holdings plans to expand into new markets, including through acquisitions, as part of its growth strategy.
The insurer operates asset management, pension management, life and general insurance businesses in seven countries — Kenya, Uganda, South Sudan, Rwanda, Tanzania, Mozambique, and Malawi.
“We do have ambitions to expand beyond our current footprint. We will look at all options by either offering new products or looking at potential new markets,” said Britam chief executive Tavaziva Madzinga at an investor briefing on Thursday. “We have lots of opportunities for expansion with potential mergers and acquisitions.”
He did not give a timeline for the planned geographical expansion or the targeted markets and estimated capital investment. Britam’s acquisition of Real Insurance in 2014 saw it enter Tanzania, Malawi, and Mozambique besides
boosting its market share in Kenya. Before the deal, Britam had a direct presence in Kenya, South Sudan, Rwanda, and Uganda but derived more than 90 percent of its earnings from the local market.
Britam raised a total of Sh9.3 billion growth capital in 2017 from the International Finance Corporation and private equity firm AfricInvest. The money was invested in the insurer’s current operations, including boosting capital and
strengthening its technological platforms. Mr. Madzinga disclosed the insurer’s growth plans a day after it announced a record net loss of Sh9.1 billion for the year ended December, reversing the prior year’s after-tax profit of Sh3.5 billion. The performance was mostly driven by provisions for investment losses of Sh5.2 billion in Britam Wealth Management Fund LLP, a fund managed by the insurer’s asset management arm. Besides the planned expansion, the insurer is also seeking to diversify its investments into infrastructure projects.
This comes after the Retirement Benefits Authority allowed Kenyan pension funds to invest up to 10 percent of their assets in infrastructure projects through public-private partnerships. “If you look at the development needs of East Africa and infrastructure build-out, we are constantly looking for new asset classes to invest in and allow our portfolio to diversify away from just equities and commercial properties,” said Mr. Madzinga on Thursday.