Liberty to acquire a Nigerian insurer for USD12 million

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South Africa’s Liberty Holdings said it will acquire one of Nigeria’s largest insurance company.

Liberty is looking at taking up to 75% stake in a Nigerian long-term insurer for 160 million rand ($12 million).

Some part of the details of the deal was closed on Friday.

Liberty said it is looking at expanding its operations into other parts of the African continent. Liberty has not disclosed further details on the insurance company it is looking at buying.

The company is already in Nigeria through its majority stake in Total Health Trust. On the website of THT, the company said it is a “wholly owned subsidiary of Liberty Group”. It is still unclear which of the insurance companies Liberty is looking at buying.

As for its rationale to enter Nigeria fully, Liberty might be looking at growing its revenue which as at 2016 has declined further. In its full year result released earlier today, the company’s revenue fell to ZARR62.7 billion compared to ZAR74.0 billion.

The company is currently the fourth largest insurance company in South AFrica where annual premium collected by all insurance companies is about USD50 billion as at 2015.

Nigeria’s insurance industry is smaller and narrower with about USD1 billion premium collected by insurance companies i n a year.

With potential for growth, Nigeria’s insurance industry has now become attractive for insurance groups who are looking for growth for the balance sheet. In November 2014, AXA paid EUR198 million/USD246 million for Mansard Insurance. The deal was consummated through an 100% acquisition of Assur Africa Holdings, the company owning 77% of Mansard Insurance.

The race to get into the market is still on. Last year, Swiss Re invested into Leadway Assurance through a 25% stake in the strong insurance company.

The next coming weeks will reveal the insurance company in question.