Amana Takaful Life Limited (ATLL), a fully-owned subsidiary of Amana Takaful PLC, last week announced an Initial Public Offering (IPO), via an Offer for Sale of Rs. 75 million, thereby becoming the first segregated life insurer in Sri Lanka to do so following the mandatory segregation of Life and General insurance companies on February 1, 2015.
Listing on the Diri Savi Board of the Colombo Stock Exchange (CSE), the company is offering 50 million ordinary voting shares at a price of Rs. 1.50 per share, which represents a 10% stake in the company. The issue will open on July 21 and the Prospectus (which can be referred to for more information on the IPO) and application forms will be available from July 4.
The minimum subscription has been set at 1,000 shares and multiples thereof. The Financial Advisor and Manager to the offering is Acuity Partners (Pvt) Limited and Amana Bank is the Banker to the issue.
The IPO, which complies with the Insurance Board of Sri Lanka’s (IBSL’s) Regulation of Insurance Industry (Amendment) Act, No. 3 of 2011, is expected to provide further strength and growth impetus to Amana Takaful Life Limited (ATLL), which has outperformed the industry for three consecutive years in terms of growth (IBSL Statistical Review 2015).
“This Initial Public Offering, while further strengthening the company, will offer an opportunity for members of the public to become part of Amana Takaful Life’s growth story,” Amana Takaful Life Limited (ATLL), Chairman, Tyeab Akbarally said.
“We see tremendous opportunity in the growth story of Sri Lanka,” ATLL CEO, Reyaz Jeffrey said. “The market is relatively untapped and we see increased demand for Life insurance, stemming from key economic activity and infrastructure development. As we approach USD 4000 per capita income, there will be key segments that will actively seek life insurance as opposed to the current push strategy.”
ATLL has outperformed the industry, growing at a Compound Annual Growth Rate (CAGR) of 31% over the last five years and recorded a Gross Written Premium (GWP) of Rs. 928 million in the financial year ending December 31, 2015. Comparatively, the industry grew by 11% CAGR over the same period and 20% in 2015 (IBSL Statistical Review 2015). Despite 2015 being the company’s first year of operations as an independent entity, (and notwithstanding pressure from increased post-segregation costs and lower yields on investment income) ATLL recorded a profit of Rs. 18 million.
ATLL plans to grow at 34% CAGR over the next five years, supported by several strategic initiatives that include growing its Agency force and entering in to Bancassurance arrangements with Amana Bank –discussions regarding which are underway. It also envisages strengthening its sales force by arming them with digital devices, which also doubles up to provide real time activity tracking and management information.