Equity Group has announced intention to venture into long term insurance business through a separate arm subject to regulatory approvals.
In a notice sent to investors yesterday, Equity Group Managing Director and Chief Executive Officer James Mwangi said the board had approved the proposal to have Equity Group Holdings (EGH) undertake long term insurance business in Kenya.
Mwangi said all insurance activities of the Group will be handled by a separate holding company.
“The Proposed Insurance Business, including putting in place all the necessary structures, commercial arrangements and any ancillary arrangements … is subject to obtaining shareholder and regulatory approvals," he said.
Mwangi added that the arrangement, if successful, will enable the Group not only to offer competitive services but also deliver value to stakeholders.
"Until further announcements regarding the Proposed Insurance Business are made, the shareholders of EGH and other investors are advised to exercise caution when dealing in EGH ordinary shares on the Nairobi Securities Exchange, the Uganda Securities Exchange and the Rwanda Stock Exchange,” said the notice.
The announcement comes amid improving performance by the company where the Group booked a 22.6 billion profit after tax for the year ended December 31, 2019.
Earnings were boosted by a 23 per cent growth in loan book from Sh297.2 billion to Sh366.4 billion registered in 2018.
Other positive drivers include the lender’s growth of 14 per cent in customer deposits, shareholders’ funds at 18 per cent.
