Fusion Capital enters insurance sector, eyes 5pc market share


Private equity company Fusion Capital has ventured into the insurance industry in its push to grow its footprint in East Africa.

The firm last week announced that it has acquired a licence to run Fusion Insurance Brokers.

Fusion Capital, which has Kenya as its regional business centre, offers various forms of financing such as equity, revolving credits and debt financing exceeding Sh300 million.

Company CEO Luke Kinoti said efforts to purchase a local insurance firm were unsuccessful, forcing it to expand by setting up its own entity.

“We are looking to have a strong base in Kenya, with targets of capturing a five per cent of the insurance brokerage sector in the next five years,” said Mr Kinoti, adding: “we will first begin by offering general and life insurance.”


Insurance is the arm that has been lacking in Fusion’s one-stop financial services shop, said the CEO.

In banking, Fusion has investments in Remu Microfinance as well as Suntra Investment Bank.

Suntra Investment Bank provides stock brokerage, dealership and collective investment vehicle services.

Remu is licensed by the Central Bank to offer financial services targeting savers, who are locked out from the mainstream services offered by commercial banks.

So far, Fusion has pumped over Sh20 billion in real estate projects around East Africa and is optimistic that its strong financial base will provide sufficient working capital for its new underwriting business.

The equity firm steps into the insurance industry at a time when the sector is experiencing a lot of change and cutthroat competition.

“There are mergers, acquisitions and new entrants into the local market. These developments are indicative of the industry’s worth and potential and we hope that we will be able to offer affordable insurance as well as increase penetration,” said Insurance Regulatory Authority CEO Sammy Makove.


Fusion is planning to target the medium sized corporates with its cover products.

It also plans to offer mortgage to its intermediaries in the real estate business.

“Insurance will be an added benefit as we provide fund management and team up with our partner banks to provide mortgage,” Mr Kinoti said.

Insurance penetration in Kenya now stands at 3.4 per cent of the GDP.

This puts the country fourth in Africa behind South Africa, Namibia and Mauritius.

Kenya is, however, ranked first in terms of growth in the continent followed closely by South Africa and Morocco.

This shows that there is need for more entrants to set base with specific targets on the uncovered remote areas.

Financial results released by the Insurance Regulatory Authority in October state that the industry posted an impressive 16.5 per cent jump in the premiums underwritten in 2014 to Sh157 billion as compared to Sh135 billion recorded over the same period in 2013.

Fusion Investment Management is licensed by the Retirement Benefits Authority as a pension fund manager and by the Capital Markets Authority as a real estate investment trust manager.

Fusion has also invested in three other businesses.

The company has interests in San Valencia Restaurant, a chain that has cut an edge in the hospitality and food industry.

Further, the equity firm has majority shareholding in Gal Baking Services, a company that bakes cakes, cookies, pies, croissants and other pastries.


In the media, the company is the majority shareholder in X-News, a free, daily newspaper circulated in Nairobi.

“We thought time was due for the region to have such a newspaper,” Mr Kinoti said.

“We are the majority investor but we give the newspaper full editorial independence.”