Regional insurer Jubilee Holdings is looking to acquire three to four companies in what it says is likely to be the trend in the struggling sector.
Group Chairman Nizar Juma predicted a full-scale consolidation of the sector by next year, with Jubilee set to lead the way with the acquisition of the unnamed companies.
"To that effect, among other strategies, we seek to expand to more countries like Ethiopia even as we are looking at three or four companies with a view to acquiring them,” he said at a press briefing in Nairobi.
According to industry statistics, a total of 19 out of 40 insurance companies sunk into losses last year, with the sector recording an underwriting loss of Sh1.9 billion.
It further showed that more than half of the sector players had capital adequacy ratios of less than 100 per cent for both life and non-life businesses. This has forced some players to pursue various strategies to secure their survival, including mergers and buyouts.
"Given the capital adequacy as required by law is now 200 per cent, yet many insurers do not meet this threshold, you expect to see a lot of consolidation come next year,” said Jubilee Regional Chief Executive Julius Kipng’etich.
He said product innovation would be at the centre of the firm’s growth strategy.