New lead team at resurgent Liberty
BRUCE Hemphill is stepping down as Liberty Holdings CEO even though he has not completed his mission of turning South Africa’s fourth-biggest insurer into the Goldman Sachs of this country.
He said that although Liberty was not quite where he envisaged “we have taken a business that at one point was struggling [and] re-established it as a frontrunner in the insurance and investment market”.
The job of turning the company into the dominant giant of the insurance sector now rests with Thabo Dloti, Stanlib’s CEO who will take over from Hemphill, and Steven Braudo, currently head of Liberty Retail SA.
When Hemphill took over Liberty in 2006 it had a market capitalisation of R8.7-billion, now it’s R36-billion.
Liberty is the largest insurance underwriter by risk premiums among affluent consumers in this country, and has 27% of the market.
The word “fix” has finally disappeared from the management’s vocabulary.
“The turnaround strategy is done,” Dloti said.
Dloti , who will be going head to head with former employer Old Mutual, said the next challenge is to grow the business into other categories, such as wealth and asset management.
Hemphill is leaving Liberty on a high note — the company has just reported its best financial results in 10 years. He will rejoin Standard Bank as head of wealth, insurance and non-bank financials.
The trio of Hemphill, Dloti and Braudo managed to stabilise the business, which, in the year to December, recorded a 28% increase in operating earnings to R2.2-billion and a return on equity of 23%, which was ahead of target.
The company delivered headline earnings of R4-billion, and declared a final dividend of 581c a share, up 10% from 2012.
Hemphill will join Liberty’s board, representing Standard Bank, which holds a 53% stake in the insurer.
Discussions about Hemphill rejoining Standard Bank started when Jacko Maree was still head of the lender about two years ago.
“The thinking was to establish a third pillar for the business [Standard Bank] that wasn’t capital hungry, to start a new earnings stream, to start selling to the affluent market,” said Hemphill.
The discussions continued last year with Sim Tshabalala, Standard Bank’s joint CEO, who was involved in Liberty’s suc- cession planning.
Hemphill said that he and Tshabalala decided to hold off on the move last year, judging it to be premature.
This week, Tshabalala described the succession as “systematic”. and said he was happy with the way Hemphill managed the process.
Seelan Gobalsamy— another former Old Mutual employee — will step into Dloti’s shoes at Stanlib after completing the turnaround at Liberty Corporate sooner that his bosses expected.
His unit reported an 83% increase in headline earnings to R121-million due to improved risk claims, higher management fees and cost efficiency.