Old Mutual Holdings Plc has divested its Tanzanian subsidiary, UAP Insurance Tanzania, for Kes 73.5 million, below the unit’s net asset valuation. This decision, approved at the company’s annual general meeting, stemmed from the subsidiary’s failure to meet expected capital returns.
Acquired in 2015 as part of Old Mutual’s East African expansion strategy, UAP Insurance Tanzania faced persistent operational difficulties. Consequently, Old Mutual sold the unit at a discount to Strategic Ventures Company Limited, based on its net assets as of December 31, 2023. The subsidiary’s net assets were valued at Sh245 million at the end of 2023, but the agreed sale price was set at 50 percent of this value.
In 2023, UAP Insurance Tanzania reported a narrower loss of Kes 191.8 million compared to Kes 265.4 million in 2022, with negative net revenues from insurance totalling Kes 216.9 million due to high service expenses.
Old Mutual East Holdings Plc, a subsidiary of Old Mutual East Africa Holdings Group, owned 60.0% of UAP Insurance Tanzania through its stake in UAP Africa Limited. This comprised 137,400 ordinary shares and 100% of the unit’s preference shares.
Despite exiting the short-term insurance business in Tanzania, Old Mutual remains committed to the East African market. “We plan to collaborate with local entities to extend our product and service offerings in the region,” the company stated, emphasizing its long-term growth strategy in East Africa.
Old Mutual has other subsidiaries in Uganda and South Sudan, including UAP Old Mutual Insurance Uganda Limited and UAP Properties Limited (South Sudan).
The company reported a reduced loss of Kes 113.8 million for the year ended December 31, 2023, compared to a loss of Kes 2.2 billion in 2022. The group’s improved performance was driven by a rebound in insurance service results, with insurance revenues increasing to Kes 32.6 billion from Kes 28.4 billion. However, the group’s total expenses and commissions rose from Sh1.8 billion to Sh3.3 billion due to higher operating expenses.
