Kenya’s NCBA Group, the fourth-biggest bank by market capitalisation, has acquired insurer AIG Kenya from American International Group Inc for an undisclosed amount.

For the past 18 years, NCBA Group, Kenya’s fourth-biggest bank by market capitalisation, has held a minority share in the Kenyan subsidiary of insurer American International Group (AIG) Inc. Now, the lender has a bigger share of the pie.

NCBA has acquired the insurer for an undisclosed amount. The lender finalised a 66.67% buyout deal that will give it full control of AIG Kenya, which controls 2.14% of Kenya’s insurance market, it said in a statement. 

The acquisition puts the lender on track to its ambitious expansion drive to become a “universal bank” that provides customers with all their financial needs, managing director John Gachoras said.

With the buyout, NCBA is eyeing a larger share of Kenya’s $2.3 billion (KES300  billion) insurance industry. The acquisition comes at a time when Kenyan lenders have been moving into insurance to take up opportunities presented by low insurance penetration. Equity Group, the biggest bank in Kenya, announced in March that it will enter the general and health insurance market this month, following a successful launch of life insurance in 2022.

“With insurance increasingly becoming a basic financial need for the type of customers we serve, an ecosystem of NCBA’s physical and digital distribution platforms and AIG Kenya’s insurance capabilities will unlock opportunities to catalyze deeper insurance market penetration in Kenya and the East Africa region,” said Gachora. 

Kenya’s insurance penetration is 3%, the fourth highest in Africa after South Africa (17%), Namibia (7.8%), and Morocco (3.9%). Insurance penetration in Africa’s economic powerhouses like Nigeria and Egypt trails their peers at 0.4% and 0.6%, respectively.

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