Allianz boosts Sri Lanka general insurance share to 20-pct with acquisition
ECONOMYNEXT – Allianz, a Munich, Germany based insurer said it would become the second largest player in the non-life business in Sri Lanka with the acquisition of Janashakthi General Insurance in a market that has double digit growth.
Zakri Khir, a direction of Allianz Asia operations said Sri Lanka has a lot of infrastructure development and there was middle class that was acquiring assets.
"The more assets people gather, the more things to insure," Zakri said. "We think there is a lot of opportunity here."
The firm is paying 16.4 billion rupees, which is higher than the net asset value.
But there was a strategic fit, with coverage into the hill country, officials said.
Up to September 2017, general insurance premium grew 19 percent to 66 billion rupees in Sri Lanka. Janashakthi posted gross written premium of 8.9 billion rupees, taking over 13 percent of the market.
Janashakthi General is expected to write around 12 billion rupees of business by December, analysts say.
Surekha Alles, Managing Director Allianz Insurance Lanka said the acquisition will make her company the second largest player in general insurance in the island. It is at present the 5th largest player.
Allianz also had a 6 percent share of the life business.
Ramesh Schaffter, director of Janashakthi Insurance said the firm was looking for an international insurance partner and Capital Alliance, an investment bank had found Allianz who had wanted to take the entire stake.
Janashakthi is keeping the life business. Schaffter said the company will boost capital with the sale proceeds and return the balance to shareholders through a buyback.
Janashakthi would continue to search for an international partner for the life business, he said. (Colombo/Feb02/2018)