LeapFrog Investment eyes 24pc ICEA stake

By Steve Umidha
Wednesday, July 8th, 2020
ICEA Lion Insurance Holdings. Photo/Courtesy
In summary
    • Players predict a rougher 2020 and while majority of local insurers do not cover pandemic risks, experts say “out of the box strategies” will be a key component if industry players are to avoid an expected upsurge in claims
    • Kenya Re Managing Director Jadiah Mwarania: “How long the Covid-19 pandemic will last and the full range of its impact is difficult to predict. What is certain, however, is that the downward trend will continue.”

LeapFrog Investment (LSAI) plans to acquire 24 per cent stake in ICEA Lion Insurance Holdings, in a deal expected to accelerate the insurer’s renewed push in digitalising its core operations across the region.

The deal will see ICEA Lion Group announce itself as a key Pan-African insurer and financial services provider in a market largely dominated by Sanlam and Old Mutual.

“ICEA Lion Insurance Holdings Limited (ICEA Lion Holdings) and LeapFrog Strategic Africa Investments (LSAI) are pleased to announce that they have entered into an agreement which, subject to various regulatory approvals and other conditions precedent, will on completion see LSAI acquire a 24 per cent shareholding in ICEA Lion,” it said in a statement.

Special purpose vehicle

The investment in ICEA LION Holdings will be undertaken by Eastern Africa Holdings Limited, a wholly LSAI owned special purpose vehicle.

ICEA Lion Holdings is the non-operating holding company of the ICEA Lion Group, which is primarily involved in insurance and asset management in Kenya and subsidiaries in Uganda and Tanzania.

LSAI is an investment partnership between LeapFrog Investments and the US based financial services Prudential Financial, operating a $350 million (Sh36 billion) separate managed fund – with the objective of the LSAI fund to identify and make strategic investments in high quality financial services companies in selected African markets.

Mergers boom

Kenya’s insurance industry has seen ‘mergers boom’ in the last three years in an aggressive drive by the firms to protect their market share.

This comes on the back of a rush by insurance firms to beat a solvency requirement deadline by end of June 2020 or last week.

Last year’s key deals included the acquisition of a 13.8 per cent stake in Britam by Swiss Re whose market value Cytonn Investment was put at Sh425 million.

Others included Barclays Africa Group’s Sh2.9 billion acquisition of Kenya First Assurance and Africa Merchant Assurance which was looking to raise between Sh500 million to 700 million through the sale of a stake.