April 2021 BusinessDaily; Insurance firm AAR plans to exit Tanzania on reduced visitor numbers to its eight clinics and financial troubles worsened by the Covid-19 pandemic.
The insurer announced in a memo to staff, it has started the winding up process since it can no longer meet its obligations to employees and creditors in a timely manner.
This comes days after the Kenyan business posted a 55 per cent dip in performance in the year to December 2020, attributed to a surge Covid-19 in claims.
“The company’s parent AAR Health Care Holdings is no longer willing to support the financial requirements of the company (AAR Healthcare Tanzania Limited) ,” said AAR Health Care acting chief executive Andrew Rowell.
The winding up process involves convening a meeting of the company’s creditors to agree on liquidators.
The creditors meeting is slated for April 22.
AAR Insurance started operating in Tanzania in 2007.
It also has operations in Uganda where it launched in 1994 alongside its Kenyan operations started in 1984.
AR Healthcare (K) Limited is the largest provider of out-patient healthcare services in the East Africa, running a network of 18 medical centres in Kenya.
AAR Insurance Kenya’s overall performance decline by 55 per cent to Sh234 million last year compared to Sh517 million in 2019.
Net claims and policyholders’ benefits rose 54.2 per cent to Sh2.59 billion from Sh1.68 billion the previous financial year, with the company paying out close to Sh200 million in Covid-19 claims in 2020, signalling the harsh financial impact of the pandemic on health insurers.