Resolution Health plans to acquire insurance businesses

By Patrick Githinji

Medical insurance provider, Resolution Health East Africa Limited (RHEAL) intends to acquire two insurance businesses by the end of the year.

"We would be acquiring two insurance companies this year. Our target is to buy two insurance business after every one year," said Peter Nduati, the firm’s chief executive.

He was speaking at a Nairobi Hotel yesterday when releasing the firm’s financial results for the year ended December 2010.

He said the move is aimed at increasing the company’s market share.

He declined to divulge the cost of the intended acquisition due to fear that insurance companies that are not doing well may raise their value when approached.

Nduati did not disclose more details on the acquisition.

"The reason we raised capital through German-based private equity fund Africa Development Corporation (ADC) is to make all these acquisition".

Early this year, RHEAL announced that ADC a rapidly growing financial services group focusing on the Sub-Saharan Africa region had bought a 25.1 per cent stake in the company for Sh184 million.

Market share

Nduati hinted that the intended buyout will position the company to compete aggressively for market share with leading competitors.

RHEAL underwriting profit last year grew to Sh1.1 billion from Sh983 million accrued in 2009. The firm recorded a net income growth of 47 per cent posting Sh207million compared to Sh179 million in 2009.

Nduati attributed the growth to aggressive growth of client pool. Claims grew by 16 per cent and the firm spent Sh671million in funding health care needs of its clients.

The company expects to focus more on individual and family business.

"This will drive our business in future. We are targeting Sh1.6 billion revenue this year," he said.