Multinational brands snap up Zurich Insurance Group’s African assets

The first transaction was confirmed on 17 June 2016, when Allianz Group announced a binding agreement for Allianz to acquire ZAM for a consideration of €€244m. ZAM is among the largest insurance companies in Morocco, currently ranking at number seven in the property and casualty market and serving more than 600,000 customers. Allianz Group said that it viewed Africa as an important growth market. “This deal is a major milestone for our strategy to expand in Africa,” said Sergio Balbinot, board member of Allianz SE in charge of southern and western Europe, Africa, MENA and India. He added that Morocco offered good growth prospects for both personal and commercial lines and that the acquisition would enable Allianz to support both Moroccan and international customers in their local and international business. “Allianz is an employer of choice in Africa – we therefore look forward to developing and promoting local talents in a growing market,” he said. The second transaction was confirmed on 7 July 2016, when Canada-based Fairfax Financial Holdings (Fairfax) announced that it had acquired 100% of Zurich SA. The deal includes Zurich SA, Zurich Insurance Company Botswana Limited and Zurich Life South Africa Limited and is subject to regulatory and competition commission approval. Zurich SA is South Africa’s sixth largest short-term insurer (measured by gross written premium, according to the regulator’s 2014 figures) and reported R3.520bn from South Africa and R177.3m from Botswana in the year to 31 December 2014.hideFairfax is an investment holding company which, through its subsidiaries, is engaged in property and casualty insurance, reinsurance and investment management. It has operations in the UK and globally. Fairfax has other interests in Africa, including a stake in Africa Re (an African reinsurance company that operates across the continent) and the South Africa-based listed agricultural services company, AFGRI. Fairfax emerged as the top contender for Zurich SA due to its global industry expertise (derived from its portfolio of many internationally renowned insurance, reinsurance and investment management businesses); its strong balance sheet and available capital, which will allow the firm to deliver on its African growth ambitions; and its decentralised model, which will leave business operations to the discretion of the existing management team and employees. In a communication immediately following the announcement, Zurich SA noted that South Africa and Botswana remained attractive markets. “The acquisition is the ideal outcome for our customers, our employees, the group and the insurance markets in South Africa and Botswana,” said Edwyn O’Neill, CEO of Zurich’s business in South Africa. “The level of interest received in acquiring our business is testament to Zurich SA’s position as a well established insurance leader with a strong balance sheet, experienced management team, skilled employee base and a loyal broker network.” The insurer expects “business as usual” for its partners, suppliers, policyholders, brokers and employees and has indicated that its operational processes will remain unchanged, that it will uphold all existing contracts and honour claims as before. Although the Zurich SA brand will eventually be replaced by that of Fairfax, the insurer’s business, ethos, passion and drive will remain the same. Day-to-day management at the firm will remain largely unaffected over the short term. “Fairfax applies a decentralised model to the management of its portfolio companies – performance evaluation and succession planning are undertaken at a central holding company level, leaving business operations to the discretion of the existing management team and employees,” said Mr O’Neill. “This allows us to continue to run the business independently with a strong local focus, while still having access to global expertise and the necessary capital to deliver on our growth ambitions.” Zurich SA expects the transaction to open many doors for the insurer and its broker partners. “We are excited about what the future holds as prospects for mutual success have never looked better – going forward, our focus will remain on sustaining ongoing growth, profitability, quality customer service and enduring value for our brokers and their customers,” concluded Mr O’Neill.

Multinational brands snap up Zurich Insurance Group’s African assets

Want to read this article?

Read Next

Courage and collaboration needed to manage emerging construction sector risks

Munich Re ‘more likely’ to exceed 2024 profit target after €2.1bn gain in Q1

Insurance Europe calls for EC to ‘get it right’ on Solvency II

Zurich North America names professional liability, cyber leader

Arch Insurance International names deputy CEO

Courage and collaboration needed to manage emerging construction sector risks

Munich Re ‘more likely’ to exceed 2024 profit target after €2.1bn gain in Q1

Insurance Europe calls for EC to ‘get it right’ on Solvency II

Zurich North America names professional liability, cyber leader

Arch Insurance International names deputy CEO

Want to read this article?

Read Next

Courage and collaboration needed to manage emerging construction sector risks

Munich Re ‘more likely’ to exceed 2024 profit target after €2.1bn gain in Q1

Insurance Europe calls for EC to ‘get it right’ on Solvency II

Zurich North America names professional liability, cyber leader

Arch Insurance International names deputy CEO

Related Articles