Rwanda: Nigeria group take big stake in country’s largest insurer

Publisher: Korir, africanpress@gtmail.no source.eastafricanbusinessweek.ug

Kigali (Rwanda) -Leading Nigeria’s Industrial and General Insurance Plc (IGI) has acquired a 35% majority stake in Sociète Nouvelle d Assurance du Rwanda-Sonarwa-the country’s largest insurance firm.

The acquisition comes after IGI Plc emerged the best bidder after presenting a technical bid to the typical shareholders of Sonarwa S.A. The deal aims at improving Sonarwa’s strategic orientation program of national, regional and global competitiveness. IGI becomes the majority shareholder in the 33 year old Sonarwa. The 35% IGI stake is equivalent to 17,500 shares worth Rwf1.6billion(US$2.9m) has increased Sonarwa’s capital from Rwf1.9bn($3.4million) to Rwf3.5billion($6.3m) and asset base worth Rwf14billion($25.4m), making it the biggest and most capitalised insurance firm in the country.

The acquisition is in line with IGI’s insurance expansion programme in the East African region after acquiring 60% majority stake in Uganda’s National Insurance Corporation (NIC) and strategically seeking to launch operations soon in Burundi, Tanzania and the DR Congo. Announcing the deal in a function held in Kigali last week, the Executive Vice Chairman and Chief Executive Officer of IGI Plc, Mr. Remi Olowude, said that IGI’s acquisition of 35% biggest single stake in Sonarwa would shortly grow to 51%.

Our partnership is in sync with our stated goal of expanding in the continent and bringing our expertise to affect the lives of the people of the continent, Olowude said. We will ensure that Sonarwa achieves its target growth within the shortest possible time” he added. Under the arrangement, IGI will have a representation of three directors in the board and set up a new management to run the company’s daily business. Currently, Sonarwa has a new board chairman and a chief executive officer.

The IGI’s existence in Rwanda will allow extension of its acknowledged expertise in Insurance market from Nigeria to Rwanda’s insurance industry, one of the fast growing economies in East Africa.
The arrangement, according to the newly appointed Chief Executive Officer of Sonarwa, Mr. Corneille Karekezi, will allow the company face the growing local, regional and international competition by streamlining its procedures and systems and developing existing staff capacity and expanding its line products.

The IGI officials stated in Kigali that they are also looking at other opportunities in which they can invest in Rwanda as well as her neighbouring countries. In Rwanda, they are injecting $10million into a hotel in Kigali and they are seeking to invest heavily in health sector. The 16 year old Nigerian company, after revamping Uganda’s National Insurance Corporation (NIC), they have been granted a banking license to set up a bank-Global Trust Bank Limited which is on the verge of a rollout, according to the company’s chief executive officer.

Created in 1975 as the parastatal insurance company and pioneer in the insurance industry, Sonarwa, whose mission was to develop the industry, has grown to a market share of about 50% in the country making it the largest. Sonarwa a composite insurance company offers two-fold services of which include general business and life and pensions. In the past five years, the company has paid claims worth Rwf7.8bn ($14,18million) and generated gross premium income in excess of Rwf22.4bn ($40.7million).

With 21 branches country wide, 90,000 clients and 200 sales agents, the company is ready to list 6% stake of the government on the Rwanda over the Counter (OTC) market as the first government’s Initial Public Offer (IPO) in a move to start equities market. Likewise, IGI is also looking to list on the Nigeria Stock Exchange. The stake in Sonarwa is IGI’s third strategic investment in East Africa in the past three years. In 2005, IGI purchased the Ugandan government’s 60% stake National Insurance Corporation Uganda. NIC had since been turned into a profitable company which paid dividends to its shareholders for the first time in 2006 and recently paid the largest single claim of $7.22million.

The 16 year old IGI Plc, started in 1992, has also acquired Ghana’s Network Life Assurance Company Limited now renamed IGI Ghana Limited and Gambia’s Gamstar Insurance Company Limited.
In the last five years, IGI paid claims amounting to $138.98million and generated gross premium income in excess of $61.8million in 2007 with shareholders fund in excess of $194.9million and assets base of more than $277.5million as of December last year.

————-

African Press International - api