Jubilee Insurance Company gets regulatory approval to split insurance units

KENYA – The Jubilee Insurance Company of Kenya has gotten an approval from the Insurance Regulatory Authority (IRA) to split its insurance businesses to increase efficiency and management focus, with the company creating two new subsidiaries to house medical and general underwriting business.

Operations of the Nairobi Securities Exchange-listed firm had been run under its fully owned subsidiary Jubilee Insurance Company of Kenya Limited (JICKL).

In the application, JICKL said it would transfer its medical insurance business to the newly created Jubilee Health Insurance Limited. JICKL is also spinning off its general insurance business to the newly formed Jubilee General Insurance Limited.

The transactions, which have been approved, are to be completed retrospectively and will cover insurance contracts in existence as of December 31, 2018.

“The Insurance Regulatory Authority approves the transfer of the medical insurance business following the scheme of transfer fated December 31, 2018, between The Jubilee Insurance Company of Kenya Limited (transferor) and Jubilee Health Insurance Limited (transferee),” IRA Chief Executive Godfrey Kiptum said in the latest Kenya Gazette.

The regulator has issued a similar approval with regard to the general insurance business.

Jubilee chairman, Nizar Juma told the Business Daily in an earlier interview that JICKL would now focus on pensions and life insurance which is long term in nature.

Nizar noted that the various subsidiaries would ultimately be owned by Jubilee Holdings, which is the publicly traded entity.

The separation, which will see medical and general insurance businesses operate independently, will result in about 8.2 per cent of the 628 full-time positions being declared redundant.

The existing company will continue to operate the individual and group life insurance, pension and annuity businesses and will be renamed Jubilee Life Insurance Limited.

According to the chairman, all three businesses have been licensed to operate by the Insurance Regulatory Authority. He said the insurer is in the advanced stages of legalising the three companies.

Local and international regulatory requirements now require firms to carry out long-term and short-term insurance business in separate corporate entities to safeguard policyholders’ funds.

Besides chopping its workforce, the exercise will also see the transfer of Jubilee Insurance Company of Kenya staff to their respective companies and the identification of staff to be shared by the three companies.

Nizar said the split of the business will provide more focused service delivery to the insurer’s customers.

“We are committed to providing the best to our customers and the split will provide opportunities to simplify and strengthen our operational model and further enhance both service delivery and efficiency.”

The separation might also require the company to recapitalise the businesses to carry weighted risk and trigger the appointment of three new principals to head the separate entities.

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