KENYA – Absa Life Assurance Kenya (ALAK), an Absa Group subsidiary, has signed a product distribution agreement with Hisa Africa Insurance Agency.
The partnership will see Hisa Africa sell insurance products from ALAK.
“At Absa Life Assurance Kenya, our commitment towards meeting the needs of customers is rooted in our purpose of bringing possibilities to life for our customers, which covers the whole process from product design, customer choice, ease of accessibility and delivery of promised benefits in an operating environment that is efficient, seamless and has the requisite controls,” ALAK Managing Director Waiguru Githanji said.
ALAK was incorporated in Kenya and licensed by the Insurance Regulatory Authority in February 2015 to provide life insurance to the Kenyan population through various distribution channels.
“The insurance industry plays a significant role in the financial services sector in Kenya and supports Vision 2030,” said Hisa Africa Insurance Agency Chief Executive Officer, Alfred Mathu.
“We also continue to support efforts to improve Kenya’s socio-economic status which will aid in raising the insurance penetration levels which have remained relatively low.”
It is a subsidiary of Absa Group Limited and has an extensive, well-established local presence and combines its global product knowledge with regional expertise whilst drawing experience from other African markets where Absa Group Limited runs leading life assurance businesses to deliver high quality service.
Hisa Africa is a reputed insurance agency that advises on life assurance, investment products, and medical insurance.
This comes as Johannesburg-based Absa Group has written off KSh219.5 million (US$ ) of its investment in Kenya’s First Assurance, indicating that the subsidiary’s performance has been below expectations since the multinational acquired it in 2015.
The impaired amount represents the premium –also known as goodwill— that Absa paid to buy the company.
Goodwill represents the premium on the purchase price of an asset above its fair value and is written off down the road if the asset is for instance unable to generate the projected cash flows.
Absa did not elaborate on what caused it to impair the investment. The multinational, then trading as Barclays Africa, acquired a majority 63 percent stake in First Assurance in 2015.
The move was meant to help grow its local subsidiary’s footprint in the insurance sector, which in the past decade has attracted banks that are looking to expand their revenue streams away from the traditional corporate and retail lending market.
The multinational’s local banking subsidiary Absa Bank Kenya already ran an assurance arm which in March 2019 took over First Assurance’s life insurance business. This left First Assurance to focus on general and medical insurance business.
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