The Competition Authority of Kenya (CAK) has approved the acquisition of a 51% stake in Monarch Insurance Company Limited by a consortium comprising Ondoba Limited, Kenyoro Limited, and Equico Thirteen Limited. The transaction has been cleared unconditionally, following a detailed merger analysis that found no significant impact on competition or public interest in the insurance sector.
The transaction qualified as a merger under Kenya’s Competition Act, which requires approval for deals involving firms with combined turnovers exceeding KSh 1 billion. This threshold was met, prompting the CAK to carry out a comprehensive analysis under the Competition (General) Rules, 2019.
Ondoba Limited, one of the lead acquirers, is a newly incorporated holding company focusing on financial sector investments. Kenyoro Limited, another member of the consortium, engages in investment activities within Kenya’s financial sector, while Equico Thirteen Limited has a more diversified portfolio, including significant involvement in the insurance industry.
Monarch Insurance, a long-standing player in Kenya’s insurance industry, offers a wide range of products, including general insurance, motor solutions, and life insurance. Despite the acquisition, the merged entity is not expected to disrupt the competitive landscape in the provision of insurance services. According to the CAK’s assessment, the post-merger market share of the newly combined entity will be just 0.05%, far below the threshold to influence market concentration.
Kenya’s insurance sector remains competitive, with 58 licensed Insurance Companies as of January 2024. Monarch competes with several industry giants, including APA Insurance, Old Mutual General Insurance, and CIC General, which hold substantial market shares. Monarch falls within the “Others” category, which collectively accounts for over half of the general insurance market.
Kenya’s insurance market is structured into life and non-life insurance, with the latter comprising 11 distinct segments, including motor, medical, marine, and liability insurance. Monarch’s offerings span both life and general insurance, positioning it as a full-service provider catering to the needs of individual and corporate clients
The competitive environment in Kenya’s insurance sector is characterized by a wide array of players, with a small number of companies holding substantial market shares. For example, APA Insurance controls 9.0% of the general insurance market, followed by Old Mutual General Insurance at 8.7%, CIC General at 8.4%, and Britam General Insurance at 8.2%. Despite Monarch’s relatively small individual market share, it operates within a broader ecosystem of firms that together control 51.4% of the general insurance market.
In addition to evaluating the competitive impacts, the CAK’s analysis included a review of potential public interest concerns, such as employment and the competitiveness of small and medium-sized enterprises (SMEs). The findings indicated no adverse effects. The proposed acquisition will not lead to job losses, as the transaction merely involves an investment in Monarch without changes to its management structure.
Public interest factors are critical in merger reviews, especially when they relate to employment, the ability of industries to compete in both local and international markets, and the potential effects on specific sectors of the economy. In this case, Monarch’s strategic direction is not expected to undermine any of these concerns.
This is not the first time Monarch Insurance has undergone scrutiny by the competition regulator. In July 2021, the CAK also approved a separate transaction involving the acquisition of a 51% stake in Monarch by Holmarcom Africa Financial Services.
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