Absa exits Kenyan insurance as wealthy politician Musalia Mudavadi’s firm takes full control of two insurers

Absa Group has completed its exit from Kenya’s insurance market, handing full control of two insurers to First Assurance Investments, a firm majority owned by wealthy Kenyan politician Musalia Mudavadi.

The buyer completed its acquisition of Absa’s entire shareholding in First Assurance Holdings, which controls First Assurance Company and Absa Life Assurance Kenya, Capital FM reported on Monday. The deal closed after regulatory approvals and other customary conditions were met.

As part of the handover, both insurers will drop the Absa name. Absa Life Assurance Kenya will become First Assurance Life, and First Assurance Company will be renamed First Assurance General. For six months, the two companies will carry the line “Formerly an Absa Group Company” before the full brand change takes effect.

Customers are not expected to be affected. Existing distribution arrangements with Absa Bank Kenya will stay in place, and the companies said a joint transition process was designed to avoid disruption. Managing directors Githanji Waiguru and Stephen Lokonyo said “our products and services are not affected by this transaction,” Mt Kenya Times reported.

Neither side disclosed the final price. However, Billionaires.Africa reported last month that First Assurance Investments agreed to pay 3 billion shillings ($23.2 million) for Absa’s 63.32% stake in each insurer, below the 3.8 billion shillings Absa had been expected to seek.

The buyer is regaining shares after 11 years of Absa ownership. Kenyan investors sold First Assurance to Barclays Africa, Absa’s predecessor, in 2015 for 2.2 billion shillings ($17 million).

Mudavadi’s link to the buyer runs through Syndicate Nominees, which holds 52.5% of First Assurance Investments. Mudavadi told parliament during his 2022 vetting that the company belongs to him. Exclusive Holding, a Mombasa-based investment firm, owns the remaining 47.5%, and Lamu Governor Issa Timamy is a director and shareholder, according to regulatory filings and court documents.

Before the purchase, Mudavadi held a combined interest of about 21% in First Assurance, including a 12.35% stake through Syndicate Nominees, Billionaires.Africa reported.

The exit comes as Absa is separately raising its stake in Absa Bank Kenya to 85% from 68.5% in a 30.9 billion-shilling transaction, Mt Kenya Times reported.

Mudavadi, 66, is Kenya’s Prime Cabinet Secretary. He previously served briefly as vice president in 2002 and 2003 and as deputy prime minister from 2008 to 2013. During his October 2022 cabinet vetting, he declared a net worth of 4.1 billion shillings ($31.7 million), including real estate in Nairobi’s Riverside Estate, office blocks, a helicopter leasing company and shares in Absa Bank Kenya and First Assurance.