DURBAN – Momentum Metropolitan Holdings has completed its acquisition of the Alexander Forbes short-term Insurance business (AFI) following regulatory approval.
The deal was first announced in July last year, pending regulatory approval, with Momentum Metropolitan acquiring AFI for a reported R1.94billion after Alexander Forbes revised its strategy in March and identified AFI as a non-core business.
Momentum Metropolitan said on Friday that this strategic acquisition marked continued progress on its overall reset and grow strategy, and specifically aims to fast-track growth of the short-term insurance interests of the group.
Herman Schoeman, the chief executive of Momentum Metropolitan’s non-life insurance portfolio, said an acquisition of this nature and quality strengthened Momentum short-term insurance’s (MSTI’s) distribution capabilities and complemented its customer value proposition.
“We are excited to harness the areas of expertise that will be brought together by the combined entity to deliver an enhanced customer experience and a broader range of differentiated products for policy holders to choose from,” Schoeman said.
AFI generated a profit after of R135million for the year to end March 2019 while its net asset value was R322m.
AFI targets the middle- to high-income market, offering personal and commercial short-term insurance products.
Hillie Meyer, chief executive of Momentum Metropolitan, said their portfolio of businesses already commanded substantial market share in the life insurance, investments, corporate and health product and advice arenas.
“This transaction more than doubles our client base to 150000 policyholders and positions the combined short-term insurance business of Guardrisk, Momentum Short-term Insurance and AFI within the top three players in the short-term insurance market in South Africa,” Meyer said.
Momentum Metropolitan has identified short-term insurance as an industry segment into which the group will invest capital to support its growth aspirations.
Both Guardrisk and MSTI have shown strong performance in recent years.
The group said this transaction accelerates and broadens the sustainable growth plans for this market segment.
Alexander Forbes chief executive Dawie de Villiers said the firm was pleased with the successful completion of the transaction and that, critically, the clients would continue to receive the premium benefits and service offering that they have enjoyed with AFI.