Wednesday 30 December 2015

Janashakthi eager for more buys : Bouyant after AIA General acquisition

Janashkthi Insurance over the years has grown through acquisitions and are bullish on more in this direction, Janashakthi Insurance Managing Director Prakash Schaffter said.

Speaking to Daily News Business he said that this was the logic that came into play when the company decided to acquire AIA Insurance’ General Business recently.

He recalled that in 2001 too they made a similar investment to purchase Sri Lanka Insurance. “We are on the lookout for more similar acquisitions.”

Janashakthi Insurance, a company established in 1994, paid Rs.3.2 billion to AIA Insurance Lanka to seal off its acquisition of AIA General Insurance Lanka Limited in October. With the financial aspects of the transaction now complete, Janashakthi will commence amalgamation of AIA General Insurance Lanka Limited with Janashakthi General Insurance Limited.

Janashakthi received the go ahead from its shareholders to raise over Rs.3.357 billion by way of a Rights Issue of over 181.5 million new ordinary shares at its Extraordinary General Meeting (EGM) to raise capital for this acquisition.

“In line with our long term growth plans and to be the number one in the industry, the acquisition of AIA General Insurance Lanka Limited marks a significant milestone in Janashakthi’s history. With the combined strengths of the two entities as we strive to deliver greater value to our customers, employees and shareholders,”Schaffter said.

“Currently we are overstaffed but with the opening of new branches this will be resolved.”

Currently Janashakthi is the third largest general insurer in Sri Lanka, the resulting entity will account for an estimated Gross Written Premium (GWP) of Rs.11 billion with a market share of approximately 17.5%. Commenting on the industry he said they see lot of potential since the insurance penetration levels are very low. “In India it’s at around 3% and back in Sri Lanka it’s around 5.6%”

He said that the 2016 budget proposals saw an increased of NBT which he said would have a negative impact on them. “We hope that the new taxes would not be detrimental to the industry.”

He said looking back at 2015 the Easy Claim product (Solution that enables a fast claim payment via ATMs up to Rs.100,000 paid through from any Sampath Bank ATM) was very popular. In addition the Premier Medical (International health insurance plan provides a global coverage for Sri Lankans and expatriates) and the Janashakthi Green Light (Only life cover available to those who have been diagnosed with HIV) are very popular.

Janashakthi General Insurance is the third largest general insurer in Sri Lanka with an estimated Gross Written Premium of Rs. 7.5 bn (market share of approximately 11.4%).

www.dailynews.lk

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