German insurer Allianz has agreed to acquire Moroccan insurance unit, Zurich Assurances Maroc, from Zurich Insurance Group, the insurer said on Friday.
Zurich Assurances Maroc is currently the seventh largest insurance company in Morocco. The company generated around 114 million Euros (£88 million) in gross premiums written last year, serving more than 600,000 customers in the Kingdom. The company also has a license for life and health insurance products, which Allianz plans to exploit.
Allianz will pay 244 million euros (£189 million) to Zurich once regulatory approvals have been finalised. The transaction is expected to close end of 2016
This transaction enables Allianz to make a remarkable entry into the insurance sector in Morocco and capture future growth in the Africa region. Morocco is Africa’s second largest insurance market after South Africa.
“This deal is a major milestone for our strategy to expand in Africa. Morocco presents good growth prospects for both personal and commercial lines.” said Sergio Balbinot, board member of Allianz SE in charge of southern and western Europe, Africa, MENA and India.
The German group will, however, face stiff competition in a market dominated by the likes of Saham Insurance, Wafa Assurance, RMA Watanya and the French behemoth AXA.
The deal follows a similar agreement with Taiwan-based Hotai Group to acquire Zurich’s general insurance operations in Taiwan.
In a statement, Zurich explained that the “hard” decision to sell its Moroccan subsidiary was taken after a thorough examination which revealed that there is limited potential to achieve operating scale to justify continued investment of capital and management resources.
Despite the growth potential of the Moroccan market, Zurich ruled that other companies were best placed to manage these businesses.
In 2015, Allianz achieved a turnover of 125.2 billion euros (£95 billion), for a net profit of about 6.99 billion euros. The group has 142,000 employees serving more than 85 million customers across 70 countries.