German insurance giant Allianz has agreed to acquire Sri Lanka-based Janashakthi General Insurance (JGIL) for LKR16.4bn (€85.9m).

The German firm signed the transaction with JGIL’s parent firm, Janashakthi Insurance (JINS).

Subject to regulatory approval, the agreement is expected to close in the first quarter of this year.

After completion of the deal, Allianz Insurance Lanka will be one of the country’s largest general insurers, with a market share of about 20%.

The German insurer said with nearly a million policyholders island-wide, the expanded client base represents a significant growth opportunity for Allianz in Sri Lanka. 

The general insurance portfolio of Janashakthi complements Allianz Lanka’s existing business. JINS will continue to focus on its life insurance portfolio in order to expand its presence in the Sri Lankan life insurance industry.

Allianz said it will bring its core capabilities in data science and technology to offer superior experiences for all customers.

The Sri Lankan general insurance market, which registered a compound annual growth rate (CAGR) of 12.1% between 2010-2016, is anticipated to accelerate to 12.5% by 2020 due to enhancing trade and macro-economic conditions, as well as increased insurance penetration.

Allianz Asia Pacific Regional CEO George Sartorel said: “This transaction provides a highly attractive opportunity to transform our market presence in Sri Lanka, while accelerating our growth agenda in the Asia Pacific region.”

Janashakthi Insurance managing director Prakash Schaffter said: “I am convinced that this amalgamation with Allianz represents the natural progression of JGIL’s evolution from a small, home grown general insurance business to a leader in the industry, while reflecting the strength of the business we’ve built over the last 23 years.

“Becoming part of Allianz’s larger organisation also provides many new opportunities for our employees and our customers. We share many of the same values, and we are happy to see our commitment to customer service excellence and belief in driving process enhancement and digitalisation reflected in Allianz’s priorities and strengths.”

Image: Allianz Sri Lanka is expected to have a market share of 20%, after the acquisition. Photo: Courtesy of Allianz.