Financial services provider Sanlam has acquired half of mobile operator MTN ‘s insurtech platform aYo.
The strategic alliance, which takes effect on 31 October 2022, will market and distribute insurance and investment products across Africa through MTN Group’s insurTech aYo, in which each partner will hold 50%.
“The group entered into an agreement with Sanlam Emerging Markets Proprietary Limited (Sanlam) to sell 50% of aYo’s issued shares for S$40 million ( approximately R735 million translated at the signature date ),” MTN said on Monday.
“Subsequent to the sale, a new shareholders’ agreement has become effective governing each shareholder’s rights in relation to aYo.”
MTN added that it retains control through its substantial rights in the shareholders’ agreement.
The agreement gives MTN power over the detailed business plans that will enable it to manage the relevant activities of aYo.
The alliance with Sanlam through aYo is in line with MTN’s strategic intent to lead digital solutions for progress in Africa.
It will also help accelerate MTN’s insurtech platform, which will build and leverage the strengths and assets of both companies to build a digital insurance and investment capability across Africa.
MTN also disclosed that aYo generated $4.8 million in service revenue and $7.7 million in premium revenue in the 2022 financial year.
The company added that the number of active policies decreased by 31.7% due to the ongoing change in strategy, which focuses on higher average revenue per policy, as well as the migration of the platform to its own infrastructure.
“This resulted in the termination of free policies in the portfolio, particularly in Uganda and Zambia,” said MTN.
“We anticipate a return to growth in active paid policies with higher average revenue per policy during 2023.”
The ongoing expansion of Africa’s mobile networks and ecosystems is driving unprecedented levels of digital and financial inclusion across the…
