Investors linked to Prime Cabinet Secretary Musalia Mudavadi and Lamu Governor Issa Timamy have agreed to pay Sh3 billion to acquire majority stakes in two Kenyan insurance companies from South Africa’s Absa Group, in a transaction that would return the businesses to investors associated with their previous owners.
First Assurance Investments Limited will acquire Absa’s 63.3 percent stake in Absa Life Assurance Kenya and a similar interest in First Assurance Kenya Limited, according to people familiar with the transaction cited by Business Daily. The proposed acquisition is awaiting approval from the Competition Authority of Kenya (CAK). Absa announced in August that it had agreed to sell the interests to First Assurance Investments, with the transaction price now reported at Sh3 billion.
The consideration implies a combined equity valuation of approximately Sh4.74 billion for the two insurers, based on the reported 63.3 percent shareholding being sold. The deal comes as ownership changes reshape parts of Kenya’s insurance industry, with local investors seeking greater control of established businesses and international financial groups reassessing how they participate in the market.
A return to ownership after 11 years
The transaction would reverse a major ownership change dating back to 2015, when investors associated with Mudavadi and Timamy sold their interests to Barclays Africa, the predecessor of Absa Group’s current regional brand, in a deal valued at Sh2.2 billion. The proposed buyback would restore majority ownership to First Assurance Investments, bringing the businesses closer to the Kenyan investors who previously held interests in them.
The acquiring company is owned by Exclusive Holding Limited, which holds 47.5 percent and is associated with Timamy, and Syndicate Nominees, which owns the remaining 52.5 percent. Mudavadi said during his 2022 Cabinet vetting that he owned Syndicate Nominees. He also holds interests in First Assurance Kenya through investment vehicles, with his overall stake reported at 21.26 percent.
The ownership links add a public-interest dimension to the transaction because both investors hold senior political positions. The acquisition itself, however, remains a commercial transaction subject to the relevant regulatory requirements, with the CAK responsible for reviewing its competition implications.
The two insurers occupy established positions in their respective markets. Absa Life Assurance Kenya ranks among the country’s leading life insurers, while First Assurance Kenya is a general insurer with a history stretching back to 1930, when it was established as Prudential Assurance Company. Kenyan investors acquired the entire stake from its British owners in 1991, before the subsequent sale to Barclays Africa.
Absa’s move towards bancassurance
Absa’s sale of the Kenyan insurance businesses forms part of a wider strategy to distribute insurance through banking relationships rather than retain direct ownership of insurers in selected African markets. The group has also disposed of insurance operations in Botswana, Zambia and Mozambique, selling those businesses to Hollard International, the international arm of South Africa’s Hollard Insurance Group.
In its 2025 annual report, Absa said it had moved to a bancassurance distribution model with key partners across its African markets, explaining the disposals in the three countries. Under this arrangement, banks distribute insurance products and earn commissions while partner insurers manage the underlying policies and underwriting risks.
The approach allows Absa to use its existing customer relationships, branches and digital banking channels to generate insurance income without directly owning the businesses providing the cover. The Kenyan transaction would therefore end its direct majority ownership of Absa Life and First Assurance Kenya while leaving room for insurance distribution through partnerships.
The financial results of Absa’s Kenyan operations illustrate the distinction between the two activities. Absa Bank Kenya’s net profit from bancassurance grew 35 percent to Sh1.3 billion in the year ended December 2025, while Absa Life’s net profit declined 26 percent to Sh790.1 million over the same period.
The contrasting results provide context for the group’s strategy, although they do not establish that the decline in Absa Life’s profit was the sole reason for the disposal. Bancassurance income depends on distribution volumes, commission arrangements and operating costs, while an insurer’s profitability is also affected by claims, expenses and investment performance.
Absa is simultaneously increasing its ownership of Absa Bank Kenya. The group agreed to acquire an additional 189.38 million shares, representing 3.49 percentage points, in a transaction valued at Sh30.9 billion. The acquisition would raise its stake in the local banking subsidiary as it deepens its position in the banking business while reducing direct insurance ownership in selected markets.
Kenya’s insurance market sees more ownership changes
The proposed Absa transaction comes amid other changes in the ownership of Kenyan insurance businesses. ICEA Lion Group has been involved in a separate buyback, with First Chartered Securities agreeing to pay Sh8.5 billion to reacquire a stake previously sold to US financial services group Prudential Financial in 2021 for Sh2.4 billion.
The ICEA Lion transaction and the proposed Absa buyback have different ownership histories and transaction structures, but both illustrate how investors are reassessing their positions in established insurance businesses. Other major industry participants, including Jubilee Holdings, Sanlam Allianz and Britam Holdings, have also featured in acquisitions, mergers and disposals in recent years.
The market offers room for expansion, with insurance penetration reported at approximately three percent. Reaching more households and businesses could create opportunities for insurers, although growth will depend on affordability, customer trust, distribution costs and the ability to develop products that meet the needs of underserved customers.
For Absa, bancassurance offers a way to retain access to insurance customers through its banking operations. For First Assurance Investments, the proposed acquisition would restore majority control of two established insurers, returning the businesses to a group linked to investors who previously sold their interests to Barclays Africa.
The outcome will depend on regulatory approval and completion of the transaction, which would mark another significant change in the ownership of Kenya’s insurance industry.
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