DEAL: AfricInvest acquires minority stake in Royal Exchange General Insurance Company.

AfricInvest, a leading Pan-African asset management company has announced the acquisition of a minority stake in Royal Exchange General Insurance Company (REGIC). The investment was made through its private equity fund, FIVE, in the form of a subscription to a capital increase.

According to a notice issued by the company and filed with the Nigerian Exchange Limited (NGX), the new investment has already been approved by National Insurance Commission (NAICOM).

Following the recent investment, the Board of REGIC will be subsequently restructured to reflect this new reality. New directors from FIVE (the private equity arm of AfricInvest), will join the Board of REGIC, alongside Royal Exchange Group and Blue Orchard’s InsuResilience Investment Fund (IIF) that had earlier invested in the company in July 2019.  These new directors are expected to bring their wealth of experience and expertise in their various fields into play and chart a new strategic direction for REGIC, especially as the company seeks to be among the top 3 general insurance companies in Nigeria within the next 5 years. The appointment of these new Directors is awaiting approval from the primary regulatory body, NAICOM.

Why this matters: The investment will avail REGIC the opportunity to expand its underwriting capacity in key priority areas considered as the future of insurance, such as the retail mass market, agricultural insurance and insurtech, among others. In this light, the firm will be empowered to participate in more large-ticket corporate transactions, diversify its existing business and product lines as well as diversify its delivery channels.

In addition, the firm (REGIC) disclosed that the recent investment will help strengthen its execution capabilities at top and middle management in order to ensure the successful implementation of an ambitious growth plan for the company within the next 5-7 years.

What they are saying: Commenting on the new investment by AfricInvest, the Chairman of Royal Exchange Plc, Mr. Kenneth Ezenwani Odogwu, Chairman of Royal Exchange Group added, “Being the first insurance company in Nigeria and having been in business for over 100 years, I am excited and hopeful that we will be just as prominent for the next 100 years. The investment by AfricInvest and Blue Orchard is an important inflection point on this journey. Under the auspices of a new board led by a seasoned professional like Mr. Ike Chioke (awaiting NAICOM approval), I am confident that we will continue to provide relevant services and products to a new generation of insurance customers

Mehdi Gharbi, Senior Partner at AfricInvest and Co-head of FIVE, commented, “REGIC represents a perfect fit with the investment strategy of FIVE as it combines return and impact. REGIC’s expansion plan will allow the Company to achieve sustainable and strong growth, facilitating access to insurance while creating value for stakeholders. I’m excited to join the REGIC’s board and to contribute alongside my colleagues the emergence of a new champion in the Nigerian insurance market.”

Ernesto Costa, Head of Private Equity Investments at BlueOrchard and representative of IIF in the board of REGIC added, “One of the key drivers behind our decision to invest in REGIC in 2019 was the history of the company, as well as the commitment of the key shareholders and management team to chart a new strategic direction for the company towards retail and improving the resilience of small-scale farmers, SMEs and households against the effects of climate change. We are happy with the addition of AfricInvest, a like-minded and experienced investor, as a strategic shareholder and together, we will offer the necessary expertise, leadership and direction from the Board to ensure REGIC continues on its growth trajectory.’’

Sylma du Plessis, Partner at Alkebulan and advisor to the Royal Exchange Group commented, “This transaction is testament to REGIC’s strong management and opportunity set that it could successfully attract investors of the caliber of FIVE. We are proud to have played a part in securing funding for and giving financial advice to the Royal Exchange Group.”

What you should know:

  • Royal Exchange General Insurance Company (REGIC) is one of Nigeria’s biggest private insurance companies established in 2008, following the restructuring of the then Royal Exchange Assurance Nigeria (REAN) which had been in operation for over a century in Nigeria.
  • AfricInvest is a leading private equity firm in Africa that has raised over $1.9 billion in funds. It was founded in 1994 and has made over 180 investments in more than 25 countries across the African continent in a variety of sectors.
  • Financial Inclusion Vehicle (FIVE) is the private equity arm and the evergreen investment vehicle of AfricInvest. It was raised in December 2017 and dedicated to the financial sector in Africa.
  • For this transaction, Royal Exchange General Insurance Company had Messrs Alkebulan and Co as its Financial Advisers, while Sefton Fross were its Legal Advisers. On the other hand, Udo Udoma, Bello Osagie (UUBO) and Co acted as the Legal Adviser for FIVE, while Punuka International Law Centre acted as the Legal Adviser for Royal Exchange Plc.


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