Sanlam and FBN Holdings acquire Oasis Insurance

The acquisition of Oasis provides an entry point into the general insurance sector of the Nigerian insurance industry, which, according to the Nigerian insurance industry statistics contributed close to 80% of total insurance premiums in the country. The acquisition will leverage off the extensive branch network of FirstBank and FBN Life's existing distribution infrastructure.

Oasis " business lines predominantly comprise of motor and fire insurance. In addition, Oasis" business also includes general accident and oil/gas insurance, marine, engineering, bond and aviation insurance.

"The acquisition of the majority stake in Oasis complements our existing life insurance interest in Nigeria and will provide a more diversified financial services offering to FBN Life's existing client base," says the Chief Executive Officer of SEM, Mr Heinie Werth.

Africa remains a key investment destination for the Sanlam Group and this latest transaction is in line with the Group's strategy to focus on deepening relationships with existing partners.

Mr Valentine Ojumah, Managing Director of FBN Life, says: "We are delighted to formally announce our acquisition of Oasis Insurance Plc. Having received regulatory approvals from both the Securities and Exchange Commission and the National Insurance Commission, FBN Life Assurance Limited has set the stage for its emergence as a dominant player in the insurance industry. This acquisition is expected to facilitate the diversification of FBN Life's revenue by taking advantage of the Bancassurance business opportunities, as well as other opportunities."

SEM, which is currently doing business in India, Malaysia and 10 countries in Africa (outside of South Africa), delivered exceptional growth of 83% in gross profits from financial services for the half year to 30 June 2013. This was despite a challenging operating environment across all markets

"This transaction is another highlight of our progress in finding value-accretive opportunities in emerging markets and we look forward to enhancing our mutually beneficial relationship with the FirstBank Group," Werth concluded.

Nigeria Insurance Industry Fast Facts

Nigeria has a population of approximately 162 million, making it Africa's most populated country and accounts for 47% of West Africa's population.

It is estimated that 48% of the country's population are urban dwellers, and in 2011 the country's labour force was estimated at around 50m.

GDP of approximately US$244 billion making it the second largest economy in Africa (after South Africa).

Growth in real GDP in Nigeria has been strong, at an average growth rate in excess of 7.6% p.a. since 2003, and is expected to remain healthy over the medium term.

The insurance industry in Nigeria is currently very small when compared to the size of the overall economy. Total insurance premiums written in 2011, amounted to roughly US$1.6bn (source: Swiss Re).

Although the non-life insurance penetration is higher than the life penetration rate, it is still low at 0.5% of GDP, which is still well below the world and emerging market averages of 2.8% and 1.3% respectively.

However, due to the expansion in the economy and capitalisation of the insurance companies, premiums have been growing rapidly by an average of 18% p.a. over the past five years.