Dubai-based PE firm invests 51% stake in Kenyan micro-insurer


UAE-based private equity firm AJ Capital & Investment LLC (AJCI) has acquired a 51% stake in Kenyan micro-insurance company, Insurance for All (IFA) Limited.

The two firms announced the deal today when they signed a Memorandum of Understanding (MoU) in Nairobi. Under the deal, AJCI will inject equity capital to enable IFA roll out innovative and affordable health insurance solutions for its clients, mostly targeting low income earners who mostly work in the informal sector.

IFA, which specializes in providing affordable health insurance services mainly to low income earners and informal sector, says it will deploy the additional capital in expanding its business and reach in Kenya. The insurer, founded in 2014, offers health covers for as low as Ksh6,750 per annum and currently boast over 1600 customers.

The company’s CEO John Paul, says the deal with AJCI comes at an opportune time when it is growing its business by aggressively targeting the huge uninsured market in Kenya.

“The equity injection by AJ Capital will help us scale up our innovative approach to health insurance, and especially micro-health insurance, as we strive to provide affordable and relevant insurance solutions to our clients in the low income and informal segments,” explained Paul

The company, he says, is also in the process of rolling out innovative products IFA has also developed a health management system for clients in the informal (jua kali) sector.

AJ Capital & Investment Group Chief Executive Officer, Mr. Danny Ochieng, says that IFA is uniquely positioned to grow its business as Kenya strives to achieve universal health coverage.

“IFA has since inception four years ago developed expertise in serving the uninsured market in Kenya, in particular, the micro-health insurance segment. This was an attractive investment proposition to us given the strong growth prospects for affordable medical insurance in Kenya,” said Mr. Ochieng.

He added that AJCI, a family-owned PE firm based in Dubai, UAE, is actively exploring investment opportunities in Kenya and the region.

The acquisition of a stake in Insurance for All by AJCI comes against the backdrop of accelerated investment by local and foreign PE funds in Kenyan businesses across sectors like financial services, manufacturing, hospitality, education, health care and ICT.

PE firms pumped an estimated Ksh120 billion ($1.2 billion) billion into local enterprises in 2017-2018 according to the East Africa Private Equity and Venture Capital Association. The deal between AJ Capital and IFA further signifies growing interest in Kenya’s insurance and financial services market by foreign investors.

However, insurance penetration in Kenya remains low with a paltry three per cent of the population said to have access to any form of risk cover. The Ministry of Health estimates that 75 per cent of the population finances their health expenses out of pocket. As such, several health insurance products designed for the low income market have been launched in Kenya in recent years.

With the government currently implementing a universal health scheme under its Big Four Agenda, it is expected that demand for micro-health insurance products will continue to grow.

Makueni Governor Prof. Kivutha Kibwana who attended the signing ceremony, hailed the ‘partnership as a milestone for Kenya’s quest for 100% universal health coverage.

“This partnership between AJ Capital and IFA is significant as it will enable more low income households access affordable health care,” said Prof. Kibwana.




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