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SanlamAllianz: What Happens Next?

In this iPMI Insights article, International Health Insurance 2023 report author, Ian Youngman, takes a look at the Sanlam and Allianz insurance deal in Africa. 

About The Author

Ian Youngman is a writer and researcher specialising in insurance. He writes regularly for a variety of magazines, newsletters, and on-line services. He publishes a range of market reports, and undertakes research for companies.  

  • Sanlam, Africa's largest non-banking financial services provider, and Allianz, one of the world's leading insurers and financial services providers, have received regulatory approvals for the joint venture that will create the leading Pan-African non-banking financial services company with a presence in 27 countries in Africa.
  • The joint venture will operate as SanlamAllianz.
  • All is from a legal effective date of 04 September 2023.
  • SanlamAllianz’s ambition is to be among the top three players, in both market share and profitability, in the markets where the company will operate.
  • The joint venture is expected to have a combined group equity value of $1.8bn.
  • Sanlam holds 60% of the new joint venture, with Allianz owning 40% - with the ability to increase its shareholding to a maximum of 49% over time.
  • Allianz is expected to contribute to the new venture, its shares in its African subsidiaries including majority stakes in Jubilee general insurance in Uganda, Burundi and Kenya. 
  • Provisions have been included in the transaction agreements for certain adjustments to be made afterwards, to obtain the final joint venture company shareholding split.
  • SanlamAllianz has the capability to gain leadership positions in all key markets in both general insurance and life segments.
  • With this powerful partnership, it wants to unlock the potential of multiple fast-growing African markets and access a wider range of customers, particularly in the corporate segment.
  • Sanlam and Allianz will contribute their respective African operations into a newly incorporated joint venture company creating a leading Pan-African financial services group with an extensive footprint across the African continent.
  • Allianz has two million customers in its African business and 2,600 employees, as well as a strong presence in Egypt, Kenya, Cameroon and Uganda. 
  • Sanlam is present in 33 African countries. 

27 countries

This list has not been confirmed.

  • Algeria
  • Angola
  • Benin
  • Botswana
  • Burkina Faso
  • Burundi
  • Cameroon
  • Egypt
  • Eswatini
  • Gambia
  • Ghana
  • Ivory Coast
  • Kenya
  • Lesotho
  • Madagascar
  • Malawi
  • Mali
  • Mauritius
  • Morocco
  • Niger
  • Nigeria
  • Rwanda
  • Senegal
  • Tanzania
  • Tunisia
  • Uganda
  • Zambia

Countries excluded:

South Africa

  • Namibia will be included at a later stage
  • Malaysia
  • India
  • Middle East

Products and services

  • Products and services will be available in the markets where one or both companies currently operate.
  • Retail and corporate clients will benefit from a broader offering of insurance products tailored to their needs.
  • Sanlam, Africa's largest non-banking financial services provider, and Allianz, one of the world's leading insurers and financial services providers, have received regulatory approvals for the joint venture that will create the leading Pan-African non-banking financial services company with a presence in 27 countries in Africa.
  • IPMI will almost certainly be included, and PMI is probable.
  • The priorities of SanlamAllianz are to drive financial inclusion, focusing on the number of lives touched, by providing greater access to products and services through digital innovation; and leveraging their telecommunications and bancassurance partnerships to create new opportunities across the Africa region.

 Analysis

  • This will enable Sanlam to enhance its capabilities in existing markets and expand its footprint and market leading positions in certain key jurisdictions on the African continent.
  • Sanlam’s joint venture with Europe’s largest insurer, Allianz, has been in the making for at least a decade, with on and off informal discussions between the parties over the years.
  • Africa's insurance market pays out USD 6 to 8 billion annually to western insurance entities mainly through brokerage and reinsurance services, according to the Africa Insurance Organisation.
  • Every country in Africa is different.
  • Insurers must not make the mistake that many Americans initially made in Europe of thinking that all countries have the same health insurance needs.
  • Not all partnerships in Africa work as last year major ones disintegrated.
  • Local high-tech and huge ticket businesses insure with foreign companies due to a lack of capacity, technical know-how and lack of capital at home.
  • African insurers often act as agents for overseas insurers due to lack of local capacity.
  • There are few credible Pan African players.
  • Africa has a rising middle class in number and wealth.
  • Africa has many minerals that are needed in tech and electric vehicles.
  • Africa used to be dominated by governments and companies from the USA, UK, France, Italy and Germany.
  • They are losing out to China, India and Russia.
  • As yet few insurers from India or China are targeting Africa for IPMI and PMI – but do not rule out a mega insurer doing that.
  • Ping An is a massive banking, tech and insurance giant- think Sanlam Allianz plus a massive tech and healthcare presence.
  • When India- as it has to do for the economy- move banks and insurers from state to private ownership the next step will be going global.
  • As a counter to foreign insurers taking the African market regional insurers agree that cooperation and collaboration among regional and sub regional insurers will go a long way to strengthen them for optimal performance.
  • So African insurers can either partner with Americans and Europeans or set up their own mega competitors.
  • Increasing insurance penetration rates in African countries has huge potential.
  • Allianz has 26 million customers in more than 70 countries and 155,000 employees, but the African business is just very, very marginal.
  • Allianz wants to be in Africa, but revenue from its African business is around €500m, less than 0.01% of group revenue.

What Next?

  • The country list will be confirmed.
  • Further detail will be provided at Sanlam’s Capital Markets Days held in Johannesburg and scheduled for 18 and 19 October 2023.
  • Brokers and smaller insurers/MGAs need to decide to work with or against the new mega player.
  • Large insurers can seek to compete across Africa but to do so without local partnerships is very brave.
  • Africa is less corrupt than before, but corruption and influence and political upheaval remain.
  • The political picture is volatile in some countries, but it does change so an exit strategy is essential.
  • One new African government made all insurers buy worthless government bonds.
  • The African market has massive potential but huge risks with the insurance market.
  • The micro health insurance market is massive, so you have traditional PMI-IPMI at one end and tech based micro insurance at the other.

Get More iPMI Market Intelligence

The recent iPMI report, International Health Insurance 2023, by market analyst Ian Youngman, provides 177 country profiles, along side a whole host of business intelligence. Get your own copy of the report, click here.

Full report Multi user licence is £4,200 and is already on sale on R & M. As always, due to a long standing business partnership with the author, iPMI Global can offer discounts on this must-have #iPMI market intelligence report.

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