…Targets first position in product distribution
Provider of life and health insurance across Africa and Asian markets, Prudential Plc, said an agreement has been reached with Prudential Zenith Life Insurance Limited to acquire the left behind 49 per cent of the insurer, taking full ownership of the Nigerian insurance firm.
The insurer, who initially acquired a 51 per cent stake in Prudential Zenith Life in 2017, is making this move as part of its strategy to expand its operations across Africa by investing in markets with strong growth potential.
Speaking on the acquisition at a press briefing in Lagos, the Chief Executive Officer for Africa, Prudential Insurance, Emmanuel Mokobi, stressed the significance of the Nigerian market in the company’s Africa strategy, stating, “This transaction increases our participation in a market with significant growth potential.
Nigeria’s life insurance market remains underpenetrated, representing less than 0.2 per cent of GDP. Acquiring full ownership of Prudential Zenith Life allows us to unlock more value by leveraging customer initiatives and technology-driven distribution.”
He noted that the insurance company will also maintain its bancassurance relationship with Zenith Bank. Mokobi noted that increasing ownership of the PZL business is a strategic step in Prudential’s focus on deploying capital in existing operations with the greatest potential. “Our purpose is to protect lives and be a partner for the future. The acquisition is a powerful testament to that,” he stated.
He added that the bancassurance partnership with Zenith Bank, stressed its efficiency in the area of market expansion to increase insurance penetration through new distribution channels.
However, expressed optimism that with the acquisition, the company will create innovative insurance solutions tailored to customer needs.
He noted, “When we entered the market, we were ranked tenth in pure insurance, excluding annuities when we entered the market, we were ranked tenth in pure insurance, excluding annuities but currently, we are fifth, and the target is to become number one.”
Mokobi added that part of the strategy to achieve the goal involves enhancing the agency model, which has proven successful in other regions. “We are very strong in the agency model; it has worked in Asia, Ghana, Uganda, and Zambia.
However, he acknowledged that the retail space is challenging globally, requiring significant investment without immediate returns. “It necessitates that you invest and prepare to navigate the challenges that will arise,” he noted.
Also speaking on the opportunities presented by low market penetration, the Chief Financial Officer, Prudential Zenith, Afolabi Lawal, said the partnership with Zenith Bank would be instrumental in expanding the bancassurance model and distribution capabilities.”
“The combination of Prudential, a leader in the global space, has expanded its footprint in Nigeria and enabled it to provide solutions that meet the evolving needs of our customers,” he concluded.
Commenting on the deal, the Managing Director of the Strategic Business Group, Prudential Insurance, Solmaz Altin, said: “We are delighted to take full ownership of the business and have the opportunity to better serve the needs of our customers and create long-term value for our shareholders.
Acquiring the remaining stake is consistent with the new strategy to build a sustainable multi-channel growth platform through targeted investment in structural growth markets across Asia and Africa.
We see substantial long-term opportunities in Nigeria and plan to build on our existing agents, bancassurance partnerships, and direct distribution capabilities, he said
