EFG Hermes to diversify into insurance
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.