Germanyâ€™s Allianz plans to pay $35 million for 98 per cent stake in Nigerian insurer, Ensure Insurance, in a push for growth in Africa, where many people are uninsured.
Foreign insurers are banking on growing premiums as the continent develops its infrastructure and a consumer class demands protection from risk.
A Reuters report disclosed that Allianz said that it would acquire the stake from UK-based holding company Greenoaks Global Holdings.
Ensure Insurance offers life and non-life cover to businesses and retail clients and generated 11 million euros ($13 million) in gross premiums last year.
The Allianz group has operations in 16 African countries and views the Ensure acquisition as an opportunity to tap into Nigeriaâ€™s strong demographics and economy.
â€œThe transaction gives Allianz access to the fifth-largest insurance market in Africa and is in line with our strategy to capture long-term growth opportunities on the continent,â€ said Allianz Africa spokeswoman Bettina Sattler.
â€œIt is also a market with significant entry barriers, which is another reason why this acquisition is a great opportunity for us. Entering Nigeria with a team that knows the market was essential for us.â€
Allianz expects the acquisition to close this year and said it intends to retain Ensureâ€™s management team.
The German insurer plans to focus on property and casualty insurance, particularly underwriting industrial and speciality risk in the energy sector as well a large complex risks such as infrastructure.
â€œIn the past two years, we have been quite visible in Nigeria, sharing our risk-management expertise in power, oil and gas, as well as cyber insurance,â€ Sattler said.
â€œNow that we have a company locally … the retail sector is another growth sector for us.â€
Allianz follows British insurer Prudential which last month bought a majority stake in Nigeriaâ€™s Zenith Life to gain access to the African countryâ€™s fast-growing insurance market.