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Old Mutual intends to undertake at least two acquisitions in the next five years to increase its market share in West Africa, where insurance penetration remains high. According to the CEO of Old Mutual’s West African operations, market size is a crucial consideration for clients when picking insurers in the region.
“This is a market where if you are outside the leading companies, then you really struggle to get attention – not only from the corporate sector but also from the retail sector,” Samuel Ogbu, chief executive officer for Old Mutual West Africa, said in a telephone interview from Nigeria’s commercial hub, Lagos.
Old Mutual, headquartered in Johannesburg, was founded in 1845 and provides general financial services, such as underwriting, pensions, and asset management, in around 17 countries, primarily in Africa and China.
In Nigeria, where its activities rank 15th in terms of premium income, the insurer aspires to be one of the top five. It also hopes to break into the top three in Ghana, where it is currently the fifth largest, with the planned purchases. “We have held talks with several parties and we are likely to make at least two acquisitions,” Ogbu said.
For a takeover in Nigeria, it is looking for companies in the insurance and allied industries. Meanwhile, in Ghana, it will most likely acquire a pension company, according to Ogbu. The acquisitions will allow the company to expand its underwriting operations in the two West African countries while also expanding into other financial services in the region.
Nigeria, Africa’s largest economy, has one of the lowest insurance penetration rates in the world, with only 1% of the population covered by any type of risk insurance. “In Nigeria, I am encouraged by what the regulator is doing,” Ogbu said. “Our aim is to strengthen our position in Nigeria and Ghana to really grow and use those as a basis to penetrate the rest of West Africa over time.”
Due to expansion, Old Mutual’s West African units intend to contribute 25% of the group’s return from operations generated outside of South Africa and China by 2030. According to the CEO, Old Mutual intends to hire employees, use technology, and leverage bancassurance to grow the number of retail consumers.
Story by : Norvisi Mawunyegah