NCBA Group has announced its plans to acquire 100 per cent of AIG Kenya Insurance Company.
This acquisition, if successful, will be a significant transaction, as AIG Kenya is a well-established insurance business with over 50 years of experience and a strong reputation for providing general insurance services to corporates, SMEs, and individuals.
NCBA was formed from a merger between NIC Group and CBA Group in 2019 and has grown rapidly over the past four years.
It is now the third-largest banking group in East Africa, serving over 63 million customers through a network of 107 branches.
John Gachora, NCBA Group Managing Director, explained that the acquisition aligns with NCBA’s ambition to become a universal bank that addresses all of its customers’ financial needs.
He believes that combining NCBA’s physical and digital distribution platforms with AIG Kenya’s insurance capabilities will help them achieve this goal.
“We have held a minority shareholding in AIG Kenya for over 18 years and have been impressed by the steady revenue growth of the business, the expertise of the management team and the customer-centric spirit that is at the heart of its long-standing customer relationships.”
“Insurance is increasingly becoming a basic financial need for the type of customer that NCBA serves. We believe that by bringing together NCBA’s physical and digital distribution platforms and AIG Kenya’s insurance capabilities, we will accelerate towards our ambition to become a universal bank that addresses a full set of our customers’ financial needs,” said NCBA managing director John Gachora.
AIG Kenya serves customers across the East Africa region, while NCBA operates in four countries: Kenya, Uganda, Tanzania, and Rwanda.
Stella Njunge, CEO of AIG Kenya commented, “The announcement of intent by NCBA and AIG is an exciting development as it represents an opportunity to continue to build on AIG Kenya’s solid platform.”
The transaction is subject to necessary due diligence and approvals from the Boards of NCBA, AIG Kenya, AIG Group, and the requisite banking, insurance, and other regulatory authorities.
The deal with AIG Kenya is set to generate a minimum of KSh2 billion for the American Insurance Group (AIG), according to the most recent valuations of the local subsidiary.
The majority stake was valued at KSh2 billion as of December 2022. This valuation is based on NCBA’s assessment of its existing 33.33 per cent ownership in the local insurer, which was estimated at Ksh1.028 billion.