Old Mutual Limited today announced the sale of its full stake in UAP Insurance Tanzania, its short-term insurance business to a group within its current Minority Shareholding, pending regulatory approval.
This decision follows a thorough strategic review of the businesses relative to the immediate-to-long-term objectives of the broader Old Mutual Group.
Old Mutual Holdings CEO, Arthur Oginga commented: “Since acquiring UAP Insurance Tanzania in 2015, it has been our ambition to scale and grow in a way that would position us as one of the leading financial services providers in the market. Along the way, we made strategic investments to ensure that our business remained on the right footing and was able to compete successfully. However, businesses in Tanzania have faced challenges in meeting expected return on capital for various operational and environmental reasons. We have evaluated various options for attaining market leadership in Tanzania, however, we no longer see a clear path to achieving this strategic objective. We believe that the various options require substantial further investment and carry significant risk to attaining the objectives of market leadership and real returns in the medium term. As a result, we have decided to sell our stake in our short-term insurance business to Strategic Ventures Company Limited, a grouping from the existing minority shareholders of UAP Insurance Tanzania Limited.”
While Old Mutual will sell its stake in its short-term insurance business, it confirmed that it intends to partner with local players in Tanzania to offer products and services in the medical insurance space, albeit through its Kenya operations.
UAP Insurance Tanzania said that it does not foresee any impacts on the policies and relationships with its customers and stakeholders in Tanzania and will collaborate with the incoming owners to ensure a smooth transition.
“We are communicating with our customers and key stakeholders, and the reassurance we are giving is that they can expect continued excellent service.”
Old Mutual’s commitment to growing in East Africa remains firm. However, this growth needs to be sustainable, in the best interests of its stakeholders, and pursued responsibly.
“Over the last two years, we adopted a phased approach in rebranding our businesses in the region to Old Mutual to leverage the heritage of our brand and entrench Old Mutual in East Africa. In the coming year, this exercise will continue, and we will strengthen our investment to grow our corporate and retail propositions and position the business as a leading integrated financial service provider,” added Oginga.
Oginga concluded: “We would like to thank the people of Tanzania for embracing UAP Insurance and the Old Mutual group so warmly over the years. We are incredibly proud of the business we have been able to build in the country with the commitment of our local teams.”
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