EFG Her­mes to di­ver­sify into in­surance

The Punch - - CAPITAL MARKET -

EFG her­mes hold­ing has re­vealed its in­ten­tion to di­ver­sify into the in­surance sec­tor.

The com­pany said in a no­tice filed at the Lon­don Stock Ex­change that its wholly owned sub­sidiary, EFG Fi­nance hold­ing, and GB Cap­i­tal en­tered into a de­fin­i­tive sale and pur­chase agree­ment to ac­quire 75 per cent stake in in­surance player ― Tokio Ma­rine Egypt Fam­ily Taka­ful.

It said Tokio Ma­rine Egypt Fam­ily Taka­ful was a wholly owned sub­sidiary of Ja­pan-based Tokio Ma­rine Group.

It said the ac­qui­si­tion deal was worth EGP84.75M and the agree­ment sub­ject to reg­u­la­tory ap­provals as EFG her­mes Fi­nance and GB Cap­i­tal will each own 37.5 per cent of the com­pany.

Tokio Ma­rine Egypt Fam­ily Taka­ful, Ja­pan’s pre­mier in­surance com­pany, has pro­vided in­di­vid­ual and cor­po­rate clients with a broad suite of Shari­a­com­pli­ant life in­surance prod­ucts.

EFG her­mes said the part­ner­ship would cap­i­talise on the grow­ing de­mand for in­surance of­fer­ings in Egypt and the syn­er­gies in­her­ent in the busi­ness mod­els of both the NBFI heavy­weights

The Chair­man/chief Executive Of­fi­cer, GB Auto, Dr Raouf Ghab­bour, said, “We know the Egyp­tian life in­surance in­dus­try is primed for growth, with sig­nif­i­cant un­tapped po­ten­tial for rapid and prof­itable ex­pan­sion.

“Given these promis­ing con­di­tions, we have de­cided to grow our busi­ness in this lu­cra­tive space while en­hanc­ing the so­phis­ti­ca­tion and size of the mar­ket to the ben­e­fit of all play­ers.

“We are hon­oured to part­ner EFG her­mes and Tokio Ma­rine Group and are con­fi­dent that our new re­la­tion­ship rep­re­sents the nat­u­ral pro­gres­sion of our al­ready es­tab­lished, ex­pan­sive and fast-grow­ing

NBFI port­fo­lio of of­fer­ings in the leas­ing, con­sumer fi­nance, fac­tor­ing, mi­cro fi­nance, mort­gage fi­nance, se­cu­ri­ti­sa­tion and fleetleas­ing are­nas.”

The Group Chief Executive Of­fi­cer, EFG her­mes hold­ing, Karim Awad, said the Egyp­tian in­surance mar­ket was largely under-pen­e­trated com­pared to its po­ten­tial, with pre­mi­ums as a per­cent­age to Gross Do­mes­tic Prod­uct, which was still in the sin­gle digit.

he said with an im­prov­ing eco­nomic out­look, cap­i­tal reg­u­la­tions fo­cused on in­surance pen­e­tra­tion and wider fi­nan­cial in­clu­sion, Egypt’s in­surance in­dus­try was poised for sub­stan­tial growth in line with the kind of growth an­tic­i­pated for other emerg­ing mar­kets.

Ac­cord­ing to him, the part­ner­ship not only comes at the per­fect time, but falls per­fectly in line with the com­pany’s strat­egy to con­tinue ex­pand­ing its NBFI of­fer­ing.

Awad said, “Our NBFI foot­print to­day en­com­passes leas­ing, mi­cro­fi­nance, fin­tech-en­abled con­sumer fi­nance, mort­gage fi­nance, fac­tor­ing and se­cu­ri­ti­sa­tion.

“We can think of no bet­ter part­ner with whom to move for­ward on this than GB Cap­i­tal and Tokio Ma­rine Group.”

The state­ment said the part­ner­ship would see EFG her­mes Fi­nance and GB Auto work to­gether with Tokio Ma­rine Group to de­velop and en­hance Tokio Ma­rine Egypt Fam­ily Taka­ful’s life in­surance of­fer­ing.

It added that it would en­able the ad­di­tion of in­no­va­tive prod­ucts to es­tab­lish a com­pre­hen­sive suite of life and med­i­cal in­surance so­lu­tions geared to­ward own­ers of var­i­ous as­set classes to cap­i­talise on cross-sell­ing op­por­tu­ni­ties within both EFG her­mes Fi­nance and GB Auto’s NBFI port­fo­lios.

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