Allianz to acquire Janashakthi General Insurance in Sri Lanka
KUALA LUMPUR: Global financial services leader Allianz announced that it has entered into an agreement with Janashakthi Insurance PLC (JINS) to acquire 100 per cent of its subsidiary Janashakthi General Insurance Ltd (JGIL) for 16.4 billion Sri Lankan rupees (RM41 million).
The transaction is subject to regulatory approval and is expected to complete in the first quarter of 2018.
This acquisition makes Allianz Insurance Lanka (Allianz Lanka) one of the country’s largest general insurers, with a market share of approximately 20 per cent. The acquisition will deliver a range of strategic benefits to all stakeholders.
George Sartorel, Allianz’s Regional CEO for Asia Pacific, said: “This transaction provides a highly attractive opportunity to transform our market presence in Sri Lanka, while accelerating our growth agenda in the Asia Pacific region.
“We are greatly impressed with the JGIL team, and believe the expanded business provides a strong foundation from which to drive continued innovation and excellence for our customers.”
Janashakthi’s general insurance portfolio complements Allianz Lanka’s existing business, and represents a strategic fit across both corporate and retail lines. In addition, Allianz will bring its core capabilities in data science and technology to deliver superior experiences for all customers.
Together with its six per cent share in the country’s life insurance market, the acquisition positions Allianz Lanka as one of the strongest protection leaders in the country.
This supports Allianz’s strategic priorities of achieving market leadership positions and highquality growth in the Asia Pacific region.
Janashakthi Insurance PLC will continue to focus on its life insurance portfolio in order to strengthen its presence in the Sri Lankan life insurance industry, and remains committed to its vision of lighting the lamp of insurance in every home and workplace.
The consideration represents a multiple of 2.2 times JGIL’s adjusted net asset value in 2017. Janashakthi Insurance has been operating in Sri Lanka for over 23 years with a focus on motor, fire and health protection for individuals and corporates.
This transaction also represents one of the largest investments into Sri Lanka, demonstrating Allianz’s confidence in this market. The Sri Lankan general insurance market has posted a compound annual growth rate (CAGR) of 12.1 per cent between 2010-2016.
This is expected to accelerate to 12.5 per cent by 2020, driven by improving trade and macro-economic conditions, as well as increased insurance penetration.
Prakash Schaffter, managing director, Janashakthi Insurance PLC, said: “I am convinced that this amalgamation with Allianz represents the natural progression of JGIL’s evolution from a small, home grown general insurance business to a leader in the industry, while reflecting the strength of the business we’ve built over the last 23 years.
“Becoming part of Allianz’s larger organisation also provides many new opportunities for our employees and our customers. We share many of the same values, and we are happy to see our commitment to customer service excellence and belief in driving process enhancement and digitalisation reflected in Allianz’s priorities and strengths.”