(NAIROBI, KENYA) – An investment company linked to Prime Cabinet Secretary Musalia Mudavadi and Lamu Governor Issa Timamy will pay KES 3 billion ($23.2 million) to acquire majority stakes in two insurance firms from South Africa’s Absa Group.
Absa Group said in August it had signed an agreement with First Assurance Investments Limited to sell its 63.3% stake in each of the two entities without disclosing the purchase price.
People familiar with the transaction told The Daily Handle that First Assurance Investments has agreed to pay Absa an estimated KES 3 billion ($23.2 million) for the stakes in Absa Life Assurance and First Assurance Kenya Limited. The deal awaits clearance from the Competition Authority of Kenya.
At KES 3 billion ($23.2 million), the transaction values the two insurance firms at KES 4.77 billion ($36.9 million).
“The parties have settled on a KES 3 billion ($23.2 million) deal. They aim to conclude the transaction before the end of the financial year,” said a person familiar with the deal who sought anonymity because he is not authorised to speak on it.
For Mudavadi, the Lamu Governor and their partner in First Assurance Investments Limited, the transaction will see them buy back the shares they sold to Absa, then Barclays Africa, in 2015 in a KES 2.2 billion ($17 million) deal.
Absa Life is the seventh largest life insurer in Kenya, while First Assurance Kenya ranks 13th among general insurers in a market where premiums continue to grow.
The transaction comes amid a wave of consolidation in Kenya’s insurance sector, where ICEA Lion Group, Sanlam Allianz, Jubilee Holdings and Britam Holdings have been involved in acquisitions, mergers and disposals in recent years.
Another stake buyback is under way at ICEA Lion, where First Chartered Securities has agreed to pay KES 8.5 billion ($65.8 million) to buy back a stake it sold to US financial services group Prudential Financial in 2021 for KES 2.4 billion ($18.6 million).
The Absa deal will mark its exit from direct ownership of the two insurance businesses as it shifts towards distributing insurance products through its banking network, a strategy it has also pursued in other African markets.
The deal follows Absa’s move to raise its stake in local subsidiary Absa Bank Kenya by 3.49 percentage points through the acquisition of an additional 189.38 million shares in a transaction that concluded in mid-August this year.
A search at the public registry showed that First Assurance Investments Limited is 47.5% owned by Exclusive Holding Limited, a firm associated with Mr Timamy.
The other 52.5% is held under Syndicate Nominees, a company Mudavadi said he owns during his vetting in 2022 for the Cabinet post.
The shareholding reflects a business union that grew into a political partnership, which saw Mudavadi serve as leader of the Amani National Congress (ANC) party, with the Lamu Governor as his deputy.
The ANC dissolved last year to allow the party to merge with the ruling UDA.
Insurance penetration in Kenya currently stands at 3%, presenting potential for investors seeking growth and dividends.
Absa’s exit from the insurance business in several countries marks a strategic shift as it seeks to tap insurance earnings through bancassurance rather than direct ownership.
The bancassurance model, a partnership in which a bank sells insurance products, will allow Absa to earn from the sector through commissions without putting its capital at risk.
Locally, Absa Bank Kenya’s net profit from bancassurance grew 35% to KES 1.3 billion ($10.1 million) in the year ended December 2025, placing it top in the country’s bancassurance business.
During the same period, Absa Life’s net profit fell 26% to KES 790.1 million ($6.1 million), a performance that offers clues on why the South African group is selling its majority stake in the two companies.
Absa’s deal with First Assurance Investments Limited comes as the Johannesburg-based group increases its stake in Absa Bank Kenya to 85% from 68.5% in a KES 30.9 billion ($239.3 million) deal.
Absa Group’s subsidiary, Absa Financial Services, last year sold its 100% ownership in Absa Life Botswana to Hollard International, the international arm of South Africa’s Hollard Insurance Group.
In the same year, it sold its entire stake in Absa Life Zambia and its Mozambique insurance operations to the same entity.
“We switched to a bancassurance distribution model with key partners across our Africa regions, hence selling our insurance businesses in Botswana, Zambia and Mozambique,” Absa Group said in its 2025 annual report on the three deals.
Mr Mudavadi owns First Assurance through two investment vehicles, First Assurance Investments Limited and directly through Syndicate Nominees with a 12.35% holding, giving the Prime Cabinet Secretary a 21.26% stake.
Other shareholders of First Assurance include Stephen Githiga (4.0%), Chandaria Ventures Limited (1.67%), Epoch Investments Limited and Absa Pension Services Limited with 0.84% each.
Mr Githiga is the former chief executive of First Assurance Company and Sasini. Chandaria Ventures is associated with Darshan Chandaria and Neer Chandaria, while Epoch Investments is associated with Jambojet chairman Ayisi Makatiani.
Absa Life Assurance Kenya was licensed in 2015 and has grown into the top 10 life insurers in the country.
It was the first life insurer in Kenya to adopt bancassurance.
First Assurance was established in Kenya in 1930 as Prudential Assurance Company, and Kenyan investors bought the entire stake from UK owners in 1991.