British global insurer AON has quit 10 African markets including Uganda, citing weak economy that can’t permit its growth. According to a February 20, 2017 statement, Capitalworks, a leading Africa focused and based private equity firm specialising in investing on the continent, is to acquire AON’s shareholding in 10 countries including Uganda, Angola, Kenya, Lesotho, Malawi, Mozambique, Namibia, Swaziland, Tanzania, and Zambia.
The new entity will become Aon’s exclusive correspondent for these 10 countries and will be Aon’s largest exclusive global network correspondent on the African continent. The transaction will become effective once all regulatory approvals have been granted.
“… We believe that empowering colleagues and partners is the most effective way to serve our clients and unlock growth potential,” said John Cullen, CEO of AON Risk Solutions in EMEA. AON Uganda is headed by Maurice Amogola as Chief Executive Officer.
AON quitting comes barely three months after American insurance giant AIG quit Uganda, citing a weak economy. AIG said it opted out as a result of change of its global strategy to exit from the weak markets.
“AIG is pulling out of the Ugandan market because of scalability; whereas AIG has been making profits over the years, it cannot get the profits it wants even if it pumps in more money. The Ugandan economy is simply too small for its expansion. There are a few American companies in Uganda because the economy is small,” a source, who preferred anonymity, said, adding that the new directors of AIG decided to pull-out from 25 countries (including Uganda) deemed not economically viable.
Scalability is the capability of a system, network, or process to handle a growing amount of work, or its potential to be enlarged in order to accommodate that growth. AIG clients (agents) have since been taken over by Lion Assurance.