Sanlam and global player Allianz team up to create Pan-African insurance giant

Bruce Whitfield discusses the joint venture with Professor Adrian Saville, Investment Specialist at Genera Capital

Sanlam and Germany's Allianz have agreed to combine their current and future operations across Africa to create the largest Pan-African non-banking financial services entity on the continent.

The South African group is the largest non-banking financial services company in Africa, and Allianz is a leading international insurer.

By putting their portfolios together they will create "the strongest and most extensive network" of non-bank financial services across the continent says Sanlam CEO Paul Hanratty.

By combining Sanlam's expertise as Africa's leading insurer with Allianz's status as the world's leading insurer, we're going to be able to bring the very best of product, service and financial strength and expertise to the African continent... and to reach people who've been previously been denied access to financial services.
Paul Hanratty, Group CEO - Sanlam

South Africa is excluded from the agreement, while Namibia will be included at a later stage.

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Bruce Whitfield gets comment from Professor Adrian Saville, Investment Specialist at Genera Capital.

Prof. Saville says on paper the deal looks "fantastic", but the trick will be to get it right.

You've got an SA giant partnering with a global behemoth... and in many of the markets where they are active in a pan-African context they sit second or third, an the collective will leapfrog them over the others...
Prof. Adrian Saville, Investment Specialist - Genera Capital

... so if they get this right, you will get a leader across the better part of 30 African markets.
Prof. Adrian Saville, Investment Specialist - Genera Capital

Saville says Sanlam's existing partnership with Saham Finances - which gives it access to North and West Africa - serves as a positive example of a South African business trying to internationalise.

In the proposed joint venture with Allianz, Sanlam will be the majority shareholder with 60%.

Allianz will have the opportunity to increase its stake to a maximum of 49% over time.

They're working in different markets and take on different relative positions in these markets, and also in different types of insurance... but put these together effectively and you've got by far the regional leader.
Prof. Adrian Saville, Investment Specialist - Genera Capital

One aspect we need to be particularly sensitive to is that Africa is not a single place... We're talking about Francophone Africa, Anglophone Africa, massive markets like Nigeria alongside smaller champion markets like Côte d'Ivoire or Senegal...
Prof. Adrian Saville, Investment Specialist - Genera Capital

Listen to the discussion on The Money Show:

This article first appeared on CapeTalk : Sanlam and global player Allianz team up to create Pan-African insurance giant