By Silvia Nyambura
Global financial services company Old Mutual Group has officially announced it has acquired 60.7% stake in UAP Group. This is expected to give UAP muscle to operate in markets north of the Sahara and south of the Limpopo area. As a group UAP currently has a foot print across 5 markets in East and Central Africa and runs 4 businesses in Life and General Insurance as well as Financial and Property services. This acquisition adds banking to the group’s portfolio through Old Mutual’s subsidiary Faulu Microfinance Bank. The integration brings with it a wider focus for the business and financial leverage to drive investments in Uganda’s financial services market supported by global expertise.
Addressing the media today, Old Mutual Group CEO Peter Mwangi said, “As a group we started way back in 1845 with roots in South Africa. We have about 170 years of making and keeping promises to our customers generation after generation. As at the end of 2014 we had over 17.5 million customers in the region and we earned over 1.6 billion pounds in revenues in the same period. The growth and expansion potential of our merged business is huge. There is no doubt that together we are greater than the sum of our parts.”
Mwangi explained integration of services under one roof is the right strategy for East Africa given the low penetration levels across the region.
“These two businesses have been pursuing the same agenda with the same vision and aspirations. Blending financial resources, expertise and work plan systems is good for our commercial interests. UAP will now benefit from an investor who not only has financial capital to deploy but also committed to the sector’s growth. In addition, penetration is very low in the region with the highest being at 3%. We see this as a huge opportunity given the unfolding picture of the economic environment of the region. There is going to be increasing need for these services both from individual and households but mostly from entrepreneurs, SMEs, and corporates seeking financial solutions. As economies grow so does disposable income creating more opportunities. We need to be innovative in the way we tap into these opportunities hence the integrated services model,” he added.
Mwangi explained access to banking services in the region is higher than the uptake of insurance. Integration therefore leverages on the distribution network of banks to grow the sector.
“In addition, Mobile telephony is growing every day. People are increasingly using the phones to access financial services. It is time to broaden the offering on that digital platform to include protection products. We have a very robust strategy that we have developed to put us at the top. To do that we will need to introduce new products and invest in the delivery systems to avail those products to our customers. We will also look into training our people, upgrading our IT systems that we need as well as improving our processes and so on,” Mwangi noted.
The Chairman UAP Insurance Uganda Gordon Wavamunno said, “This merger will go a long way in increasing penetration of financial services in Uganda. It will help broaden product offering and accessibility for our customers and business partners.”