Africa’s largest insurance company Sanlam, announced Wednesday, May 4, an agreement with Allianz to combine current and future operations across Africa. The information was reported in a press release issued on the Johannesburg Stock Exchange by South African group. The transaction still awaits validation from regulators in the markets where both groups operate.
According to a joint release, the agreement aims to “create the largest pan-African non-banking financial services entity on the continent.”
In Cameroon, where these two companies operate in the property and casualty P&C insurance, the approval of the merger by the Inter-African Conference of Insurance Markets Cima will give a new face to the local market. In particular, it will bring in a new market leader, all insurance lines included.
Data from the Directorate of Insurance at the Ministry of Finance showed that for the year ending December 31, 2020, the merger between Allianz Cameroon (9.04% market share) and Sanlam Cameroon (5.28%) should now weigh 14.32% of the market share in the property and casualty line, which posted a turnover of CFA140.77 billion in 2020.
According to the Ministry of Finance, Allianz Cameroon is the market leader with 28.62% of the local market share, compared to 3.48% for Sanlam Life Cameroon. This means that the merger of the two companies should represent more than 32% of the market share of the life branch and 14.32% of the market of the property branch. This corresponds to an overall control of 42.32% of the entire insurance market in Cameroon.
The terms of the merger agreement revealed by Sanlam indicated that the deal does not include reinsurer Continental-Ré, which is also present in Cameroon. This company will remain under the control of Sanlam, which had taken over its assets following the takeover of Moroccan group Saham in 2018. The agreement between the two companies also stipulates that Allianz will be a 40% shareholder in the new entity following the merger, with the possibility of increasing its assets to 49%. The remainder will be controlled by Sanlam.