Allianz And Sanlam Joint Venture Will Maximize Value Creation For Stakeholders, Leveraging Best Practice Sharing – Allianz Africa Regional CEO
Delphine Traoré, Allianz Africa Regional CEO
Allianz and Sanlam recently agreed to combine their current and future operations across Africa to create the largest Pan-African non-banking financial services entity on the continent. In this interview with EDET UDOH, Delphine Traoré, Allianz Africa Regional Chief Executive Officer, provides highlights and objectives of the joint venture.
What is the objective of the synergy between Allianz and Sanlam?
With this joint-venture Allianz and Sanlam aim to create a premier pan-African financial services entity with operations in 29 countries across the continent (excluding South Africa). Its ambition is to be the largest pan-African insurance player with a meaningful market positioning in the majority of the markets in which it will operate. Allianz sees a number of strategic benefits in this partnership, including the ability to combine Sanlam’s experience, know-how, and footprint with Allianz’s broad expertise and global capabilities.
The partnership will also enable the joint venture to further strengthen its position in key markets on the continent, by achieving scale as well as improved geographic and product diversification. Ultimately, we believe the joint venture will maximize value creation for both Allianz and Sanlam and their respective stakeholders, leveraging on best practice sharing and leaner operations.
What solution framework is this partnership bringing to the table?
Allianz and Sanlam will leverage each other’s strengths to unlock synergies and provide customers with best-in-class, innovative insurance solutions and technical excellence.
The joint venture ambitions to support the increase in life and general insurance penetration accelerate product innovation and drive financial inclusion in high-growth African markets.
Africa is known as an emerging market with very huge potential and numerous opportunities. How is this partnership likely to explore these growth potentials and advantages for the betterment of the market?
Allianz strongly believes in the growth potential of the Africa continent. This partnership accelerates Allianz’ presence on the continent and we believe that the combination of both partners activities is bound to lead to new opportunities across all our businesses. A joint venture is the best setup to capture the potential of the African continent. Sanlam’s capabilities extend our local reach and market penetration, and the joint venture allows us to establish leading positions in key growth markets for Allianz.
What Innovation, what changes, and what new products is this joint venture planning to introduce into the market that will be different from what we have already?
We will leverage each other’s strengths to enhance our operations and provide our customers with best-in-class, innovative insurance solutions and technical excellence. Together, we will be able to broaden our geographic presence and expand our market share. Both partners place innovation at the core of their strategies and we expect the joint venture and its customers to continuously benefit from this approach.
Technology is the growth driver of every modern business. How much is the new joint venture earmarking for technology acquisition and staff training for all its companies across the 29 countries where Allianz and Sanlam operate.
This is even more true for Africa, where its young and growing population is particularly fond of new technology, as evidenced for instance by the skyrocketing number of mobile subscription and usage of mobile money.
As mentioned above, the joint venture will look to continuously innovate and provide its customers with state of the art processes. Technology is a key enabler and our employees are central to this ambition. We expect digitisation to be a cornerstone of our offering to achieve this through the provision of innovative digital solutions in partnership with various fintech and insuretechs.
In Nigeria, for instance, insurance awareness and activities is mostly concentrated in the city and urban centers while the significant population of the country living in the remote areas of the country are not aware of the benefits and importance of insurance. How is this partnership going to deal with this situation not only in Nigeria but in other African countries with similar situations?
Insurance literacy remains low in several parts of Africa, not only in Nigeria. By placing innovation at the core of its strategy, this partnership will aim to increase the overall insurance penetration on the continent by providing accessible and affordable products to its customers. One of the objectives of this partnership is also to drive financial inclusion in high growth African markets. The joint venture will play its part in this ambition by leveraging the capacity of both partners to work with in-country stakeholders to enable this.
With the plan to establish an African insurance giant, in terms of brand identity – with the joint venture, is there a plan for a new name? If yes what is the name?
Yes, we do have a co-branding plan which will be rolled out in due course.
Currently, Allianz and Sanlam are in 29 out of the 54 African countries with a ‘combined total group equity value (GEV) in excess of 33 billion South African rands (approximately 2 billion euros).’ For real impact on the continent, there is a need for expansion. Is there any plan in the joint venture for expansion into some or all the remaining 25 countries?
The joint will combine Allianz and Sanlam’s current operations in the African continent except in South Africa. The focus is on ensuring a smooth execution for our existing businesses in close collaboration with the various regulators. As such, it is still too early to comment on future expansion plans.
Can you share with us five-year or ten-year plans (if any) for the joint venture?
The long term plans remain to be a leader in all key markets across the continent while positively contributing to financial inclusion and insurance penetration.
Between Life and Non-Life which one is the preferred business for the joint venture?
Allianz and Sanlam both currently provide life and non-life insurance products in their existing businesses in Africa. The joint venture will continue to do so and aims to be a one-stop shop for all insurance needs of its customers.
In Nigeria, we have Allianz Nigeria as an entity and we also have FBN Insurance as another entity under the Sanlam Group. Today insurance penetration in Nigeria is less than one per cent with a population of over 200 million people and contributing only three per cent to the nation’s GDP. With the joint venture, what is the plan to tap into the Nigerian huge potential in terms of population and demographic to turn around this narrative?
Nigeria is a key part of our strategy for the same reason mentioned. But expanding insurance penetration in Nigeria cannot just rest on one insurer. This is an industry initiative led by our local regulator which we hope the joint venture can significantly contribute to.
What is the short and long term plan for the joint venture for Africa and Africans?
We view Africa as the key growth/strategic pillar where we view our combined efforts and experience will yield the largest value creation for all stakeholders.
The joint venture will help us to realize our strategic ambition to take leadership positions in many of the major markets where we will operate across the continent.
The strategy for the joint venture is to create value for all stakeholders through leaner operations, a broader geographic presence, a larger market share, and a more diversified product offering.
What are the strategies to tackle emerging risks such as Terrorism, cybercrime, Political, kidnapping etc in Africa?
As insurers in any market emerging risks remains also a top priority for us. It’s important that as a collective in the insurance industry we also provide products and solutions that are a priority for our customers in these markets. As such we will continue to explore ways to contribute.
(For the moment we are focussed on ensuring we receive all the required regulatory approvals. Further details will be announced in due course. )
What are the plans under the Joint Venture agreement to take advantage of the African Continental Free Trade Area IAfCFTA)?
For the moment we are focussed on ensuring we receive all the required regulatory approvals. Further details will be announced in due course.
