SA Insurance Groups Eye Kenya

February 16 - South African insurance groups are eyeing the East African market after the Kenyan government announced that it would be consolidating the country's insurance industry.

According the Global Fund Manager at Sanlam Investment Management, Kokkie Kooyman, a number of top South African insurance groups were already showing interest in the Kenyan market.

Kooyman said that groups such as Metropolitan, Sanlam and Liberty were all interested in purchasing existing small operations, however the prices were often too high.

"If the existing guys in Kenya are realistic about their prices and have a good business model then I am sure South African insurers would be sniffing around," said Kooyman.

According to top insurance executives in Kenya, the consolidation of the local market is imperative due to globalization.

"The Kenyan regulator has ... put a minimum level of capital below which insurers cannot operate," explained Kooyman. "This would obviously force smaller players to merge or get bought out by a foreign insurer."

Old Mutual already has a strong presence in the Kenya insurance market. Last year, the CEO of the group, Kuseni Dlamini said that Old Mutual was planning on expanding into the entire east African market.