MUA wants to be big in East and West Africa

Mauritius Union Assurance (MUA) is tackling East Africa and has set its eyes on the west of the continent. Bertrand Casteres, its managing director, says that its July 2020 takeover of the non-life activities of Saham Kenya is a major step forward for the group. “Our main challenge is to successfully integrate the two entities by the end of the year,” Casteres said, which it succeeded in doing by mid-2021.

The Mauritian insurance specialist has big ambitions for the new operations in Nairobi. In this highly fragmented sector, where none of the 35 or so players present represents more than 10% of the market, the leaders UAP Insurance, Jubilee (controlled by Allianz), CIC General, Britam Insurance, APA Insurance and GA Insurance each make do with shares ranging from 5% to 8%.

In 2018, MUA Kenya accounted for just 0.5% of Kenya’s written premiums, with a turnover of $6.5m. Saham Kenya, on the other hand, captured about 2% of the country’s insurance premiums before being absorbed by its Mauritian rival, with a turnover nearly four times larger.

MUA, founded in 1948, broke into East Africa in 2014, acquiring Phoenix Insurance, which had a presence in the region (Kenya, Tanzania, Rwanda and Uganda) dating back more than 100 years.

MUA, which controls 23% of the Mauritius property and casualty market and 11% of the life insurance market, targets a critical 3% threshold for each of its locations. When it has a lower market share, MUA aims for acquisitions. This strategy is made possible by its financial capacity and its ability to mobilise funds quickly thanks to its 2,000 shareholders, including a handful of players who hold 40% of its equity and have an appetite for risk. Between October 2021 and January 2022, MUA shares rose 75%.

Raising equity

“The group has demonstrated its ability to raise equity and debt, particularly in recent years, in the form of two bond issues [Rs600m ($13.8m) between 2019 and 2021] and a capital increase for a total of Rs415.8m,” analysts at local rating agency CARE Ratings said.

The non-life branch of Saham Kenya – which was not integrated during South African Sanlam’s acquisition of its Moroccan ex-rival Saham – was an ideal target for MUA. “This [merger] allows us to reach the critical size to expand in East Africa and, in addition, to gain a foothold in the region’s healthcare sector,” adds Casteres.

By 2020, according to CARE Ratings analysts, MUA represented 3% of the market in Kenya, 5% in Tanzania, 15% in Rwanda and 3% in Uganda. In terms of assets, the operation increases the share of East Africa in MUA’s revenue ($138m in 2020) from 25% to 40%.

This is a success that the Mauritian company intends to build on to look for markets in the French-speaking world. But for the time being, the group, which has been listed on the stock exchange since 1993, will not say more.