37294 - Britam Kenya

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Summary of Investment Information

Project Number

37294

Company Name

BRITAM HOLDINGS PLC

Date SPI Disclosed

Jan 30, 2017

Country

Kenya

Region

Africa

Projected Board Date

Dec 21, 2016

Environmental Category

FI-2 - Limited

Status

Active

Last Updated Date

Sep 17, 2017

Department

CFGS6 - Global Industry, Financial Markets/FIG Operations - CAF

Industry

Financial Markets

Previous Events

Approved : Dec 21, 2016
Signed : Dec 30, 2016
Invested : Sep 6, 2017

Sector

Composite Insurance (Life and Non-life)

Project Description

The proposed investment consists of an equity investment of up to Kenya Shillings 3,553,375, 000 in newly issued common shares of Britam Holdings Limited (“Britam” or the “Company”) to support the Company (i) develop its local agency network, (ii) strengthen the capital base of its core subsidiaries in Kenya and its recently acquired subsidiaries outside of Kenya to meet new regulatory capital requirements, and (iii) support the integration of a new IT platform. Britam is a leading insurance and financial services group in East Africa with headquarters in Kenya and subsidiaries in Uganda, Tanzania, South Sudan, Rwanda, Mozambique and Malawi. The Company is also the largest shareholder in Housing Finance Group Ltd and one of the largest shareholders of Equity Group Holdings Ltd.

Sponsor / Cost / Location

Product Line	IFC Investment (million USD)
Risk Management
Guarantee
Loan
Equity	34.89

Development Impact

- Insurance Sector Development: The Company has been a pioneer in microinsurance reaching segments of the population which traditionally do not have insurance protection. Wider insurance coverage fosters (i) job creation, (ii) economic growth, and (iii) an increase in living standards. - Enabling Fund Accumulation and Allocation: Britam through its asset management business performs the role of a catalyst of long-term funds to profitable investment opportunities, thereby ensuring a more professional allocation of resources to profitable economic uses. - South-to-South Investments: Britam plans to expand and invest into frontier markets such as the as DRC and Ethiopia and is in need of capital to strengthen its existing subsidiaries across Africa. - Medical Insurance for Low Income Population: In 2014, Britam launched a low income, microinsurance-type medical insurance policy, which contributed 20% to the Company's total medical insurance premiums, and this year the Company focuses on group micro health solutions.

- Stamp of Approval: Britam is a system-critical player in Kenya's and East Africa's insurance space. IFC's involvement will enhance the Company's market perception and attract new investors. - Governance: IFC will help Britam implement international best practices in corporate governance. - Regional Knowledge and Sector Experience: IFC can share its knowledge and experience as a long-standing investor in the region with the possibility of bringing global relationships and knowledge to the Company. - Political Risk Mitigation and Expansion: Partnership with IFC will help the Company to cope with higher than usual political risk environments for example in South Sudan.

E&S Category Rationale / Risks and Mitigation

This project has been classified as category FI-2 in accordance with IFC's Policy on Environmental and Social Sustainability. The company offers individual and corporate insurance products to clients in Kenya and other East African countries - Uganda, Tanzania, South Sudan, Rwanda, Mozambique and Malawi. The company's primary focus is insurance - life assurance and general insurance. The company is also involved in asset management, banking and property development and management. It is noted that Britam does not hold controlling stakes in the banking businesses and these businesses are not considered subsidiaries. In addition, some Britam sub-projects could potentially be high risk. However, the overall portfolio risk is considered medium as the overall risks associated with the company's activities are considered limited. The identified applicable requirements are the IFC Exclusion List, the applicable national social and environmental laws in the countries of operation and the IFC Performance Standards.

The main E&S risks and impacts relate to the ability of the company to identify and manage the E&S risks associated with its business activities (Performance Standard 1) as well as the company's labor standards (Performance Standard 2). An assessment of Britam's risk management procedures revealed that although E&S issues are assessed for certain transactions, the Company is working to enhance its E&S risk management processes to meet IFC's Performance Standards; specific requirements are set out in the action plan below. Furthermore, an assessment of the company's labor practices in relation to Performance Standard 2 revealed some minor non-compliances. In relation to the property business, life and fire safety was identified as an aspect to be addressed for existing assets. The gaps identified in relation to these aspects have been addressed in the action plan below.

Contacts

For Inquiries About the Project, Contact

Britam Centre
Dr. Benson Wairegi
Group Managing Director
Tel: +254 020 2833 000/2710 927
info@britam.com
P.O. Box 30375, 00100
https://www.britam.com/

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IFC supports its clients in addressing environmental and social issues arising from their business activities by requiring its real sector clients to set up and administer appropriate grievance mechanisms and/or procedures to address complaints from Affected Communities in relation to environmental and social issues arising from IFC's clients' business activities. Since 2012, IFC's Financial Intermediary clients applying the Performance Standards are required to develop External Communications Mechanisms to receive and review inquiries or complaints from any interested party regarding the E&S risks and impacts of their operations.

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Complaints may relate to environmental and social harm regarding any aspect of the planning, implementation, or impact of a project or sub-project, and can be made by any individual, group, community, entity, or other party affected or likely to be affected by the environmental or social impacts of an IFC- or MIGA-financed business activity.

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CAO receives and addresses complaints in accordance with the CAO Policy, which can be accessed at: https://www.cao-ombudsman.org/policies-guidelines.

This Summary of Investment Information (SII) is prepared by IFC to disclose a factual summary of the main elements of the potential investment. It also includes findings and recommendations related to environmental and social considerations regarding this potential investment. The purpose of the SII is to enhance the transparency of IFC’s activities. For any project documentation or data included or attached herein, whether prepared by the project sponsor or otherwise, authorization has been given for public release by the project sponsor. IFC considers that this SII is of adequate quality for release to the public, but has not necessarily independently verified all of the project information therein. It is distributed in advance of IFC Board of Directors’ consideration and may be periodically updated thereafter. Board dates are estimates only and this document should not be construed as presuming the outcome of the Board Directors’ decision. The following SII is disclosed in accordance with IFC's Access to Information Policy (AIP) that went into effect on January 1, 2012.

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Task Title & Description	Anticipated Completion Date
Nominate officers	12/30/2016
Establish SEMS	04/30/2017
Staff Training	10/27/2017
Performance Standard 2 Compliance	10/27/2017
Life and fire safety audits	04/30/2018

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