Turning somewhat Japanese
It has never been easy to put a value on Hollard, the unlisted insurer. But Tokio Marine, Japan’s oldest insurer, has just bought 22.5% for $327m, which would value the whole group at about R21bn. But Hollard is no longer the niche disrupter of the 1990s — it is a very large business, writing R25bn a year of premium income.
Hollard CEO Saks Ntombela says the 22.5% holding is just enough to cement a co-operative relationship — but so not so big that the culture is diluted. Hollard’s freewheeling, informal style doesn’t look too compatible with the formal suits and bowing of Japanese corporates.
But Tokio Marine CEO Tsuyoshi Nagano says Hollard’s approach to business is very similar to its own — maximising long-term partnerships rather than building monolithic operations in-house. Ntombela believes that Tokio Marine, with best practice in predictive analysis, robotics, risk management, underwriting and insurtech, should provide some of the tools to help develop insurance for the next 50 years. And it will provide greater access to global reinsurance markets.
Tokio Marine’s premium income is about
6.5 times that of the entire SA industry.
Hollard and Tokio Marine already have a joint venture in Indonesia, which has an economically active population of 100-million, about the same as Nigeria. But Indonesia is an easier place to do business, Ntombela says. “We like to get into a new country with a local partner, and with all the hype about Nigeria, the multiples the local companies want us to pay are insane,” he says.
With Tokio Marine, Hollard can expand in Africa and Southeast Asia without a further capital raising. A potential listing of Hollard, always remote, is now even further away. But Ntombela says Hollard is evolving from a medium-sized family-owned business into a much larger and more sophisticated group. The Enthoven family, who own Hollard, have been excellent custodians, but times change. Today, the group is more structured and over time there will be greater use of the Hollard brand. Most of the underwriting managing agencies, such as Altrisk, have become divisions of the group.
It has retained taxi insurer