SANLAM Emerging Markets says it is looking to expand into Zimbabwe in the next year or two after its Kenyan subsidiary made an acquisition in a short-term insurance business in the east African country.

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Sanlam Emerging Markets said Kenyan subsidiary Pan African Insurance Holdings (PAIHL) had bought a 56% stake in Gateway Insurance Company for about $8m. The deal gives Sanlam an opportunity to sell the full gamut of nonbanking financial services in Kenya.

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“Historically we have always been in Kenya. We had a life and asset management company … We needed to get into general insurance,” Sanlam Emerging Markets corporate development executive Thabied Majal said on Thursday. Mr Majal said the company had an option to grow its 56% stake in PAIHL to 60%, but would wait for the right time to do so.

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The Sanlam Emerging Markets deal comes after Old Mutual Emerging Markets acquired a majority stake in UAP, the third largest general insurer in Kenya, in January for about $253m.

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The acquisitions form part of a strategy by South African companies to tap into the higher economic growth and lower insurance penetration in the rest of Africa.

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Sanlam Emerging Markets said gross written premiums in Kenya’s short-term insurance industry have been growing at 20% per annum.

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Previously Old Mutual has said insurance penetration in Kenya was low, at 3.16% of gross domestic product (GDP). The World Bank valued Kenya’s GDP at $44bn in 2013.

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“I think the obvious gaps for us … we still need to do Zimbabwe. Zimbabwe is a key market for us and Angola is another market that we need to look at. We have now done the deal in Mozambique … we need to get to Angola,” Mr Majal said in reference to Sanlam Emerging Markets’ appetite to expand into Lusophone countries.

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“We have to be in Zimbabwe. It’s a matter of when. It’s finding the right asset at the right price. I think Zimbabwe hopefully we will do it in the short-term in the next year or two and Angola in the medium-term.”

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Sanlam said earlier this month that it was looking to invest R3.3bn of its discretionary capital in acquisitions in the rest of Africa and southeast Asia.