AfricInvest Acquires Minority Stake in Royal Exchange

Ebere Nwoji

AfricInvest, a pan-African asset management company has bought minority share of the Royal Exchange General Insurance Company (“REGIC”) .
The company, said the investment was made through its evergreen private equity fund, FIVE, in the form of a subscription to a capital increase.

The company in a statement said the desire to participate in more large-ticket corporate transactions, diversify existing business and product lines as well as diversification of delivery channels were some of the key drivers behind this push for additional working capital by REGIC.

It further said the additional working capital would also enable the company to expand its underwriting capacity in key business areas such as the retail mass market, agricultural insurance and insurtech, which is the future of insurance.

According to the company this new investment, which has already been approved by NAICOM, would, in addition to supporting the enhancement of REGIC’s underwriting capacities, strengthen the company’s execution capabilities at top and middle management in order to ensure the successful implementation of an ambitious growth plan for the company within the next 5-7 years.

A statement by Royal Exchange said the investment by AfricInvest (FIVE Fund) would also result in the restructuring of the board composition of REGIC, with the expected appointment of new Directors to the Board of REGIC, pending approval by the regulator, NAICOM.
“These new Directors are expected to bring their wealth of experience and expertise in their various fields into play and chart a new strategic direction for REGIC, as the company seeks to be among the top three general insurance companies in Nigeria within the next five years.”

Speaking on the new investment by AfricInvest, the Chairman of Royal Exchange, Mr. Kenneth said, “being the first insurance company in Nigeria and having been in business for over 100 years, I am excited and hopeful that we will be just as prominent for the next 100 years. The investment by AfricInvest and Blue Orchard is an important inflection point on this journey. Under the auspices of a new board led by a seasoned professional like Mr. Ike Chioke (awaiting NAICOM approval), I am confident that we will continue to provide relevant services and products to a new generation of insurance customers”.

Also speaking, Senior Partner at AfricInvest and Co-head of FIVE, Mehdi Gharbi, said that REGIC represents a perfect fit with the investment strategy of FIVE as it combines return and impact. “REGIC’s expansion plan will allow the company to achieve sustainable and strong growth, facilitating access to insurance while creating value for stakeholders. I’m excited to join the REGIC’s board and to contribute alongside my colleagues the emergence of a new champion in the Nigerian insurance market.”

Head of Private Equity Investments at BlueOrchard and representative of IIF in the board of REGIC, Ernesto Costa, added that one of the key drivers behind the company’s decision to invest in REGIC in 2019 was the history of the company, as well as the commitment of the key shareholders and management team to chart a new strategic direction for the company towards retail and improving the resilience of small-scale farmers, SMEs and households against the effects of climate change.