Johannesburg - Liberty Holdings has acquired a controlling stake in an insurance firm in Uganda, and the Standard Bank subsidiary was awarded with a licence to expand its life and health business into Lesotho.
Liberty said it clinched the 51 percent stake in East African Underwriters, a short-term-insurer and an arm of the Madhvani Group, one of east Africa’s largest diversified companies. The group is among the top six biggest short-term insurers in Uganda and that country’s biggest life insurer.
Sandile Hlophe, the chief executive of Liberty Group Arrangements, said the firm was part of a strategy for growth. “Liberty’s expansion strategy on the continent and the opportunities to increase access to affordable, accessible and simple solutions are enablers of the group’s vision to become the trusted leader in insurance and investments in Africa and other chosen markets,” Hlophe said.
He said Africa was the second-largest and most-populous continent in the world, projected to more than double to 2.4 billion people by 2050, which presented a great opportunity to increase financial services and financial inclusion.
“You need to have a long-term view to capture these opportunities, especially with the current low insurance penetration rates reported across the continent.
“Liberty is committed to ensuring people across Africa have access to simple, relevant and competitive insurance solutions of an international standard, enabling them to choose those that best suit their personal short-term and long-term needs.
“To remain competitive in the growing east Africa region, there is an increasing need to offer comprehensive insurance propositions, notably life, health and general insurance.”
Liberty rose 1.82 percent to close at R112, as the rand surged to R15.94, although this was in tandem with its peers.
According to Liberty Life 2014 annual report, the combination of low penetration of insurance and investment products and expectations of strong economic growth in many countries in the sub-Saharan region was strategically attractive.
The acquisition in Uganda was expected to strengthen Liberty’s position in the east African general insurance market as the group already had a short-term insurance presence in Kenya and Tanzania trading under the Heritage brand.
An analyst, who spoke on condition of anonymity, said the acquisition was part of the company’s growth strategy.
“The strengthening of Liberty stock cannot be linked to the transaction as it was small. It has more to do with the banking stocks which were all high today.
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