Regional re-insurer ZEP-RE eyes 56% stake in ACRE Africa to scale up agriculture insurance

KENYA – ZEP-RE, leading African reinsurer created under the auspices of Common Market for Eastern and Southern Africa (COMESA) is seeking to acquire a controlling 56% stake in ACRE Africa, an insurance intermediary in a bid to deepen covers for smallholder farmers in the region.

ACRE Africa, headquartered in Kenya develops and distributes agricultural insurance products.

The company also offers advisory services to development organizations and insurance regulator associations operating in Kenya, Tanzania and Rwanda.

Completion of the acquisition is subject to approval from these countries’ competition and insurance regulators.

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“The additional resources for ACRE Africa will help enhance climate risk insurance solutions to address both gaps, and hence increase farmers’ resilience and growth in the agriculture sector.”

Olga Speckhardt – SFSA Head of Global Insurance Solutions and ACRE Africa Board member

ZEP-RE has already received nod from its shareholders to proceed with the deal that will give it a say in a firm that develops and distributes agricultural insurance products.

“In Sub-Saharan Africa, more than 70% of the population depends on agriculture for its livelihood. Agricultural insurance, however, is rarely available.

“Where it exists, insurance covers a very small segment of farmers. Smallholders face numerous risks, especially related to changes in climate,” said ZEP-RE CEO Hope Murera.

 ZEP-RE’s founding mandate is to develop insurance and reinsurance across Sub-Saharan Africa.

Following its completion, the transaction will see ZEP-RE inject additional cash into the business to strengthen its current platform.

SFSA Executive Director Simon Winter, the present Chairman of ACRE Africa, declared, “ZEP-RE is the ideal new majority stakeholder. This acquisition is a milestone in the history of ACRE Africa and in our quest to build a dynamic and sustainable smallholder agricultural insurance sector. We greatly look forward to seeing ACRE Africa flourish with the support and guidance of ZEP-RE.”

Olga Speckhardt, SFSA Head of Global Insurance Solutions and ACRE Africa Board member, added, “Climate change is a threat to Sub-Saharan smallholders, who are also hampered by lack of access to credit.

“The additional resources for ACRE Africa will help enhance climate risk insurance solutions to address both gaps, and hence increase farmers’ resilience and growth in the agriculture sector.”

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ACRE Africa’s main current shareholders are the Syngenta Foundation for Sustainable Agriculture (SFSA), the Adolf H. Lundin Charitable Foundation and the Grameen Crédit Agricole Foundation (Grameen).

SFSA will now hold a 20.8% stake in ACRE Africa; the Lundin Foundation and Grameen holdings remain at their current level.

We are thrilled to welcome ZEP-RE as a key strategic partner to advance ACRE’s mission and vision to democratize agricultural microinsurance.

“AHL looks forward to continuing to support ACRE’s success across the continent, alongside all our partners,” said Rosanne Whalley, CEO of AHL Venture Partners, managing the Adolf H. Lundin Charitable Foundation.

Guest of Honour at the signing ceremony, Alhaj Kaddunabbi Ibrahim Lubega, Chairman of the East African Insurance Supervisors Association and CEO of the Insurance Regulatory Authority of Uganda commended the parties involved in the transaction and the initiative taken by ZEP-RE which will go a long way in enabling the provision and affordable access to agricultural insurance.

The Regulator also thanked SFSA and the other shareholders for incubating ACRE Africa as a start-up, and for continuing shareholder loyalty in the next phase of growth.

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