5/2/2018 – Global financial services major Allianz on Friday announced that it is going to fully acquire Janashakthi General Insurance Limited at an amount of 85.9 million euros (about US$106.4 million).
Allianz forged an agreement for the transaction, which is currently subjected to regulatory approval, and expected to complete in the first quarter of 2018, with JGIL’s parent company, Janashakthi Insurance PLC (JINS).
This transaction represents one of the largest investment in Sri Lanka and upon completion of the deal, Allianz Insurance Lanka will be one of the country’s largest general insurers, with a market share of approximately 20 percent.
According to George Sartorel, the Allianz’s Regional CEO for the Asia Pacific, “This transaction provides a highly attractive opportunity to transform our market presence in Sri Lanka while accelerating our growth agenda in the Asia Pacific region.”
“We are greatly impressed with the JGIL team, and believe the expanded business provides a strong foundation from which to drive continued innovation and excellence for our customers.”
With about a million policyholders island-wide, Janashakthi’s general insurance portfolio and expanded client base complements Allianz Lanka’s existing business, and represents a strategic fit across both corporate and retail lines.
The consideration represents a multiple of 2.2x JGIL’s adjusted net asset value in 2017. Janashakthi Insurance has been operating in Sri Lanka for more than 23 years with a focus on motor, fire, and health protection for individuals and corporates.
The Sri Lankan general insurance market has posted a compound annual growth rate (CAGR) of 12.1 percent in the 2010 to 2016 period. This is expected to accelerate to 12.5 percent by 2020, driven by improving trade and macroeconomic conditions, as well as increased insurance penetration.
Prakash Schaffter, Managing Director of Janashakthi Insurance PLC said, “I am convinced that this amalgamation with Allianz represents the natural progression of JGIL’s evolution from a small, homegrown general insurance business to a leader in the industry, while reflecting the strength of the business we’ve build over the last 23 years.”
“Becoming part of Allianz’s larger organization also provides many new opportunities for our employees and our customers. We share many of the same values, and we are happy to see our commitment to customer service excellence and belief in driving process enhancement and digitalizations reflected in Allianz’s priorities and strengths.”
Pro-acquisition, Janashakthi General Insurance Ltd. which has been operating in Sri Lanka for more than 23 years will continue to focus on its life insurance portfolio in order to strengthen its presence in the country’s life insurance industry.
