Santam, a South African insurance company, has acquired MTN South Africa’s device insurance book.
Santam stated in a statement regarding the purchase that MTN South Africa’s device insurance book presently has just over 400,000 policies and an annual gross written premium value of almost R400 million (US$21.7 million).
The agreement is intended to assist MTN South Africa in expanding the reach of device protection to its consumers.
Santam Group CEO Tavaziva Madzinga saw the purchase as a chance to broaden the company’s updated strategy, which intends to establish the groundwork for future growth through partnerships. Building collaborations across many industries, especially telecommunications, is a major emphasis of the plan.
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,” Madzinga said.
“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 added.
MTN South Africa CEO Charles Molapisi described the collaboration as a boon for the company’s consumers and a chance to further enhance financial inclusion in South Africa.
(Source: MTN SA)
The transaction is still subject to other conditions, including regulatory clearances, which are expected within the next 12 months. The transaction was authorised without limitations by South Africa’s Competition Commission on March 13, 2023.
The value of insurtech
According to the group’s statistics for the fiscal year ending December 2022, MTN Group’s insurtech platform, aYo, produced US$4.8 million in service revenue and US$7.7 million in premium income.
The arrangement comes on the heels of last year’s announcement of a strategic relationship between Sanlam and MTN Group, the parent companies of Santam and MTN South Africa, to promote insurance and financial products across Africa.
This Sanlam partnership had been planned since August 2021 and was completed in November 2022.
