Santam, South Africa’s short-term insurer, has entered into an alliance with MTN South Africa, that will see the company purchase the mobile telecommunication firm’s device insurance book.
The acquisition, and alliance, is aimed to support MTN South Africa in broadening the reach of device protection to their clients, in line with the importance of devices in the lives of customers.
MTN South Africa’s device insurance book currently has just over 400 000 policies and an annual Gross Written Premium value of nearly R400 million.
Tavaziva Madzinga, the Santam Group CEO, said the acquisition was an opportunity to expand the company’s refreshed strategy which seeks to lay a foundation for future growth through partnerships. An important focus of the strategy is the building of partnerships across various sectors including telecommunications, amongst others, while putting clients at the centre of delivering Insurance, Good and Proper.
“We are delighted to conclude this important step as part of the wider strategic alliance with the MTN Group and are excited at the prospect to develop further digitally enabled short-term insurance solutions for the South African market through aYo Holdings, the MTN Group’s InsurTech platform. Through aYo, the alliance will continue to build and develop digital insurance and investment offerings that provide people across Africa with easier access to financial service products, particularly those people who have typically been unable to access traditional distribution channels,” he said.
Charles Molapisi, the Chief Executive Officer of MTN South Africa said the partnership was a boon for the company’s customers.
“MTN South Africa is equally excited to be partnering with Santam and the Sanlam Group in driving financial inclusion across South Africa and providing customers with insurance and investment products tailored to the needs of the South African consumer,” he said.
The implementation of the transaction remains subject to the fulfilment of various conditions, including regulatory approvals which are expected to be fulfilled within the next 12 months. On 13 March 2023, the Competition Commission approved the acquisition without any conditions.
The agreement follows on the heels of the announcement in November 2022 of a strategic alliance to market insurance and investment products across Africa between Sanlam and MTN Group, the holding companies of Santam and MTN South Africa, respectively.