, NAIROBI, Kenya, Sep 16 – UK based insurance firm Prudential PLC has entered the Kenyan market after buying out Shield Assurance.
Prudential Africa CEO Matt Lilley said they will be investing Sh1.5 billion in the next 12 months.
Lilley says the company will operate under the Shield Assurance name with changes “expected soon.”
“Today’s announcement is an important milestone for Prudential and represents our first step towards the creation of a new business in East Africa. We now look forward to working with our new colleagues at Shield to create one of Kenya’s leading life insurers, generating jobs and serving our customers,” Lilley said.
With the new changes, at least 500 customers of Shield Assurance have a reason to smile as Prudential will spend Sh200 million in paying their pending benefits.
On the other hand the current Shield Assurance CEO Charles Mang’ee will remain in his position. The current employees will also be retained.
Kenya is the second African country the company is investing into after Ghana.
“Kenya is a great place to do business and we would like to thank the National Treasury and the Insurance Regulatory Authority (IRA) for supporting this investment,” Lilley added.
On his part, Insurance Regulatory Authority CEO Sammy Makove said Prudential will only focus on life insurance business in the country which has a current minimum capital requirement of Sh150 million.
“Life insurance penetration is at less than 1 percent. With the entrance of Prudential, we expect this to improve. We are hoping they will bring international standards of this business which will contribute growth to the sector,” Makove said.
This comes as Treasury announces plans to introduce a new Insurance law aimed at growing the sector and increasing insurance penetration which stands at 3.4 percent by 2013.
Treasury Cabinet Secretary Henry Rotich said the bill will focus on strengthening customers whom he says are still pessimistic about insurance companies.
Prudential plc plans to create 4,000 new jobs by the year 2020, a mixture of direct employees and self employed agents.
With operations in UK, US and Asia, Nairobi will become the headquarters of a planned new East African division.