Allianz said the transaction represents one of the largest investments into Sri Lanka, which demonstrates its confidence in this market.
"Sri Lanka is a growing general insurance market and with this acquisition we have gained almost 20% market share of the Sri Lanka's general insurance market," a member of the Allianz Asia Executive Board, Zakri Khir said......at a Media conference in Colombo.
Meanwhile, speaking at the occasion Janashakthi PLC Director, Ramesh Schaffter said they have plans to utilize part of the divestment earnings to pay a dividend to common shareholders and also part of the earnings to expand their life insurance business with digital and bancassurance methodologies.
In 2015,Janashakthi Insurance acquired the AIA General Insurance Lanka Limited for Rs 3.2 billion and Earlier (2001) they had acquired the State National insurance corporation for Rs 800 million.
"We have gained a significant capital gain through this deal and the consideration represents a multiple of 2.2x JGIL's adjusted net asset value in 2017," Schaffter said.
Currently JGIL is the 3rd largest life insurer in Sri Lanka and Allianz Insurance Lanka Limited is ranked in 5th position.
Allianz is in Sri Lanka's insurance business since 2007.
"With this acquisition we will be the 2nd largest life insurer in Sri Lanka with the Rs 18 billion asset base," Managing Director of the Allianz Insurance Lanka Limited, Surekha Alles said.
The transaction is subject to regulatory approval and is expected to complete in the first quarter of 2018.
Meanwhile, Allianz statement said the acquisition will deliver a range of strategic benefits to all stakeholders, including, strengthening Allianz Lanka's customer reach and service capabilities, with close to a million policyholders across the island, the expanded client base represents a significant growth opportunity for Allianz in Sri Lanka.
Janashakthi's general insurance portfolio complements Allianz Lanka's existing business and represents a strategic fit across both corporate and retail lines.
JGIL will benefit from Allianz' capabilities in data science and technology.
Janashakthi Insurance has been operating in Sri Lanka for over 23 years with a focus on motor, fire and health protection for individuals and corporates. It will continue to focus on its life insurance portfolio in order to strengthen its presence in the Sri Lankan life insurance industry.
The country's general insurance market has posted a compound annual growth rate (CAGR) of 12.1 percent between 2010-2016, which is expected to accelerate to 12.5 percent by 2020, according to Allianz Group Economic Research. Such growth will be driven by improving trade and macro-economic conditions, as well as increased insurance penetration, the company noted.
"This transaction provides a highly attractive opportunity to transform our market presence in Sri Lanka, while accelerating our growth agenda in the Asia Pacific region," said George Sartorel, Allianz's regional CEO for Asia Pacific.
"We are greatly impressed with the JGIL team, and believe the expanded business provides a strong foundation from which to drive continued innovation and excellence for our customers."
Prakash Schaffter, Managing Director, Janashakthi Insurance, said: "I am convinced that this amalgamation with Allianz represents the natural progression of JGIL's evolution from a small, home grown general insurance business to a leader in the industry, while reflecting the strength of the business we've built over the last 23 years. Becoming part of Allianz's larger organization also provides many new opportunities for our employees and our customers."