KAMPALA. The Madhvanis have sold a 51 per cent stake in the non-life insurance business, East African Underwriters Limited (EAUL) to Liberty Holdings Limited of South Africa.
The cost of the transaction was, however, not disclosed after the deal was signed last week.
EAUL, which holds a 2.7 per cent market share in the non-life insurance segment in Uganda, holds insurance premiums of Shs10.6b according to the Insurance Regulatory Authority (IRA).
“We believe that this new partnership in the short-term industry will enrich our investment and development efforts by broadening the skills base and bringing new technical expertise to the market,” said Mr Kamlesh Madhvani, the director Madhvani Group.
Access to non-life insurance
On the other hand, Liberty will have access to the non-life insurance segment in Uganda, which it initially was never part of in the country.
In Kenya and Tanzania, Liberty is already in the non-life business. Uganda’s insurance penetration is at a low of 0.86 per cent and Liberty’s entry will seek to improve this figure. “This extension of the partnership will provide Liberty with a full insurance offering to enable our growth strategy of leading in our chosen customer segments in the Uganda market. We are fully committed to growing the insurance market and development needs of the country,” said Mr Mike du Toit, the Liberty regional executive for East and Central Africa.
In Uganda, Liberty has only been active in the life insurance business where it is the market leader. In 2007, Liberty entered a partnership with EAUL to form Liberty Life Assurance, which is now Uganda’s largest life insurance service provider. According to Insurance regulatory Authority statistics, Liberty Life Assurance controls 37 per cent market share in the life insurance segment, making it the market leader in the county.