Britam’s acquisition of Housing Finance good for local financial sector - experts

Regional insurance firm, Britam is optimistic its stake increase in Kenyan mortgage firm, Housing Finance (HF) will strengthen its capacity to seek the same synergies with a local banking partner should the regulatory environment support the Bancassurance business model. Bancassurance is the partnership between a bank and an insurance company whereby the insurance company uses the bank sales channel in order to sell insurance products, an arrangement in which a bank and an insurance company form a partnership so that the insurance company can sell its products to the bank’s client base. Bancassurance, the sale of insurance and pensions products through a bank, has proved to be an effective distribution channel in a number of countries in Europe, Latin America, and Asia. A few weeks ago, Britam announced its intention to acquire the Equity Bank’s 24.76 per cent equity in Housing Finance. Britam already has a 21.46 per cent stake in the mortgage company, meaning the impending deal could push its ownership of the mortgage firm to 46 per cent, Patricia Wanjama, the head of legal and assistant company secretary at Britam Group’s Nairobi head office, said in an email interview with Business Times last week. Jonathan Gatera, the National Bank of Rwanda director general of the financial stability committee, said in an interview last week such deals between banks and insurance firms could also take place in Rwanda but with the regulator reviewing them first, to avoid a conflict of interest between the two parties.