Quick-term insurer King Value has purchased African Financial institution’s former life insurance coverage enterprise, Stangen, paving a means for it to enter the South African life insurance coverage market.
Up till now, King Value, which entered South Africa’s insurance coverage market in 2012, has solely offered short-term insurance coverage, providing motor, family, enterprise and different specialist insurance coverage merchandise. Its short-term ebook now collects annual premiums of R2.three billion, and the insurer says it sells greater than 12 000 insurance policies a month.
Nevertheless it has demonstrated progress aspirations lately, beginning with its R2 billion bid for Alexander Forbes’ quick time period insurance coverage enterprise when it was up on the market early in 2019. That bid was, nevertheless, received by Momentum Metropolitan Holdings.
Quickly after the Alexander Forbes bid, in June 2019 King Value introduced that it had additionally made a bid to accumulate Stangen from African Phoenix Investments, the corporate that emerged when African Financial institution Funding Restricted got here out of enterprise rescue.
On Tuesday, King Value mentioned it lastly acquired the inexperienced mild from regulatory authorities to accumulate Stangen on 28 February for R140 million. Stangen has greater than 55 000 policyholders throughout its life cowl, group schemes insurance coverage and funeral cowl companies. The insurer presents life cowl, incapacity, funeral plans, group advantages and extra. By including a life insurance coverage portfolio, King Value now joins business heavyweights like Previous Mutual, Sanlam, Metropolitan and Hollard in competing for the share of shoppers’ expenditure on life insurance coverage.
“We’d at all times deliberate to enter the life insurance coverage market, which is 3 times the scale of the short-term insurance coverage market in SA, and shopping for an current, area of interest life insurance coverage enterprise is sensible on so many ranges,” mentioned King Value CEO, Gideon Galloway.
He mentioned by shopping for an current life insurer as an alternative of constructing its ebook from scratch, King Value would achieve a working begin into the extremely aggressive life insurance coverage market. He mentioned King Value would launch its life model throughout the subsequent 12 months, and forecast that life merchandise will make up half of its income inside 10 years of the acquisition.
Gideon mentioned he was assured that King Value would be capable to maintain a 40% year-on-year progress goal following the acquisition.
“Our current distribution channels are entrenched, and we’ll depend on them to extend the dimensions of the Stangen ebook. We see large potential for vital progress available in the market,” he mentioned.