Hollard wants to expand range
• Insurer wants to offer credit and savings services
Hollard aimed to become a full-service financial services provider to the mass market, offering credit, savings and transactional products, CEO Nic Kohler said on Wednesday.
Hollard aims to become a fullservice financial services provider to the mass market, offering credit, savings and transactional products, says CEO Nic Kohler.
Its acquisition of Regent Insurance Group from Imperial Holdings, which was finalised on Wednesday after securing Financial Services Board approval, was a step towards fulfilling this ambition, Kohler said last week.
The R1.8bn transaction took Hollard’s share in the funeral insurance market to 15%-20%. Regent’s savings products complemented Hollard’s funeral products, hospital cash plans and legal and education policies, Kohler said.
Hollard planned to offer credit and transactional products, which would probably be done through partnerships.
The Regent acquisition will cement Hollard’s position as SA’s second-largest short-term insurer, marginally increasing its lead on Old Mutual Insure, formerly Mutual & Federal. The combined entity, including Hollard’s life insurance business, generates more than R20bn a year in premium income.
Kohler hoped the businesses would be largely integrated by the end of 2017.
The acquisition bolstered Hollard’s presence in the rest of Africa, where it was keenly expanding and which now contributed more than 25% to group profit, said Kohler.
It also increased Hollard’s presence in the commercial vehicle insurance sector.
Following the acquisition, Hollard was the largest insurance company in Botswana and gained an immediate presence in Lesotho, its seventh African market. Last week, Business Day reported that Hollard had partnered with global health insurer Cigna to offer health insurance to companies operating in Africa.
Imperial first announced it had entered into negotiations with Hollard over a possible sale of Regent in May 2015. In January, regulators in Botswana, Lesotho and Zambia approved the sale of Regent’s non-South African operations.
Locally, the deal was delayed over Competition Commission concerns over the sale of Regent’s motor-related valueadded products businesses to MotoVantage, a joint venture between Hollard and FirstRand. The commission said Hollard and Imperial could exchange competitively sensitive information via MotoVantage.
The revised acquisition terms excluded MotoVantage from the deal, which was approved by the commission in April with conditions, including limits on merger-related job losses for three years.
Imperial would retain Regent’s value-added products businesses, which would be
THE REGENT ACQUISITION WILL CEMENT HOLLARD’S POSITION AS SA’S SECOND-LARGEST SHORT-TERM INSURER
underwritten by Hollard for a licence fee, Kohler said.
Kohler, 47, will step down as CEO of Hollard later in 2017 after 10 years at the helm and 20 years with the company. He planned to work with Yellowwoods, the Enthoven family’s investment company. The family is the majority shareholder of Hollard, which is SA’s largest private insurance company.
Responding to a question, Kohler said Hollard had no plans to join the JSE. A public listing created unnecessary short-term pressure, which could distort decision making.
The insurer was keen to create social dividends alongside financial dividends and it was easier to balance these factors as a private company, he said.