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Pan-Africa Insurance in talks to acquire Gateway, increase market share [Jerusalem Post (Israel)](Jerusalem Post (Israel) Via Acquire Media NewsEdge) Pan Africa Insurance Holdings Ltd (PAIHL) has announced a take-over of Gateway Insurance Company in a move widely expected to bolster its market share and strengthen its position in the general insurance business. In a media advert yesterday the insurer, which started its underwriting business more than six decades ago, said it has entered into an agreement with Gateway insurance in a deal that is likely to end in the acquisition of a controlling stake in Gateway Insurance. "Completion of the transaction is to be conditional upon the receipt of regulatory, shareholder and other approvals," said PAIHL. "Accordingly shareholders and the general public are hereby advised to exercise caution when trading and or otherwise dealing in the shares of PAIHL, as the transaction is material." The acquisition could also be a blessing in disguise for a highly competitive insurance industry whose registered players stood at 48 by December 31, 2013, according to Insurance Regulatory Authority. Last year British American Investments Company Limited (Britam) acquired 99 per cent shareholding in Real Insurance Company Ltd both in cash and share swap transaction. The transaction was partly informed by the growing desire by Britam to acquire a larger share of general insurance business and diversify its presence into major geographical areas including Tanzania, Malawi and Mozambique. Kenya's insurance industry is relatively less developed compared to insurance markets in the developed economies, but it is ranked fourth highest in Africa in terms of penetration after South Africa, Namibia and Mauritius. However, the industry continues to attract foreign direct investment from Africa and the rest of the world. It is argued that the recent developments in the Kenyan economy like the discovery of oil and gas and the recognition of micro insurance products would play a vital role in terms of growth for the industry thus increasing penetration. In the 2007/08 budget, the then Finance minister, Amos Kimunya, proposed an increment in the paid-up capital for all insurance companies. The move was geared at strengthening their financial base, and to clamp down on a string of failures that had rocked the industry. All rights reserved (c) 2014 The Jerusalem Post Provided by SyndiGate Media Inc. (Syndigate.info). |