Allianz announced the creation of Allianz Insurance Lanka (Allianz Lanka) after it reached an agreement with Janashakthi Insurance PLC to acquire 100 of its subsidiary (Janashakthi General Insurance Ltd.) for €85.9 million, or approximately US$106.3 million. The transaction is still subject to regulatory approval and is expected to be completed in the first quarter of 2018.
According to Allianz, this acquisition makes Allianz Lanka one of the country’s largest general insurers, with a market share of approximately 20 percent.
Allianz said the acquisition will deliver a range of strategic benefits to all stakeholders, including:
- Strengthening the customer reach and service capabilities of Allianz Lanka. With close to a million policyholders across the island, the expanded client base represents a significant growth opportunity for Allianz in Sri Lanka.
- Janashakthi’s general insurance portfolio complements the businesses Allianz Lanka has and represents a strategic fit across both corporate and retail lines.
- JGIL will benefit from Allianz’ capabilities in data science and technology.
- Support of Allianz’ strategic priorities of achieving market leadership positions and high-quality growth in the Asia Pacific region.
Zakri Khir, a member of Allianz Asia’s executive board, said the deal puts Allianz Lanka in a very good position as the combined entity would let them compete with the top of the sector.
“Now we can compete with the market leader”, said Khir, adding that they are looking for strategic investments in Asia.
Allianz Lanka after good results in Asia
Allianz announced it achieved an excellent set of results in Asia for the full year ended 31 December 2017.
Total revenues in Asia grew 24%, to €6 billion; operating profit went up 22%, to €273 million, and return of equity remained stable at 11.4%. In the Life & Health segment, Allianz’ annualized new premiums rose 33%, to a record €954 million; new business value grew 27%, to €263 million, and operating profit went up 16% to €192 million.
In the Property and Casualty segment, Allianz’ gross written premiums grew 7%, to €794 million; operating profit went up 37%, to €81 million, and combined ratio improved by 3.1 percentage points to 93.7%.
George Sarotel, regional CEO for Asia, commented: “We have finished 2017 on a high in Asia, delivering significant earnings growth across both insurance businesses. This solid performance reflects the strengths of our diversified portfolio across geographies, channels and products, the focused execution of our teams and our commitment to drive a high-quality, value-creating business in the region”.
The creation of Allianz Lanka after the acquisition of Janashakthi is another step towards the strengthening of its position in the continent.
Janashakthi Insurance has been operating in Sri Lanka for over 23 years with a focus on motor, fire and health protection for individuals and corporates. It will continue to focus on its life insurance portfolio in order to strengthen its presence in the Sri Lankan life insurance industry.