Allianz announced it has entered into an agreement with Janashakthi Insurance PLC (JINS) to acquire 100 of its subsidiary Janashakthi General Insurance Ltd. (JGIL) for LKR 16.4 billion (€85.9 million, or approximately US$106.3 million).
The transaction is subject to regulatory approval and is expected to complete in the first quarter of 2018.
This acquisition makes Allianz Insurance Lanka (Allianz Lanka) one of the country’s largest general insurers, with a market share of approximately 20 percent, said Allianz in a statement.
Allianz said the acquisition will deliver a range of strategic benefits to all stakeholders, including:
- Strengthening Allianz Lanka’s customer reach and service capabilities. With close to a million policyholders across the island, the expanded client base represents a significant growth opportunity for Allianz in Sri Lanka.
- Janashakthi’s general insurance portfolio complements Allianz Lanka’s existing business and represents a strategic fit across both corporate and retail lines.
- JGIL will benefit from Allianz’ capabilities in data science and technology.
- Support of Allianz’ strategic priorities of achieving market leadership positions and high-quality growth in the Asia Pacific region.
Janashakthi Insurance has been operating in Sri Lanka for over 23 years with a focus on motor, fire and health protection for individuals and corporates. It will continue to focus on its life insurance portfolio in order to strengthen its presence in the Sri Lankan life insurance industry.
Allianz noted that the transaction represents one of the largest investments into Sri Lanka, which demonstrates its confidence in this market. The country’s general insurance market has posted a compound annual growth rate (CAGR) of 12.1 percent between 2010-2016, which is expected to accelerate to 12.5 percent by 2020, according to Allianz Group Economic Research. Such growth will be driven by improving trade and macro-economic conditions, as well as increased insurance penetration, the company noted.
“This transaction provides a highly attractive opportunity to transform our market presence in Sri Lanka, while accelerating our growth agenda in the Asia Pacific region,” said George Sartorel, Allianz’s regional CEO for Asia Pacific. “We are greatly impressed with the JGIL team, and believe the expanded business provides a strong foundation from which to drive continued innovation and excellence for our customers.”
Prakash Schaffter, managing director, Janashakthi Insurance, said: “I am convinced that this amalgamation with Allianz represents the natural progression of JGIL’s evolution from a small, home grown general insurance business to a leader in the industry, while reflecting the strength of the business we’ve built over the last 23 years. Becoming part of Allianz’s larger organization also provides many new opportunities for our employees and our customers.”
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