MMI sells Swazi operations to Vunani
The black-owned Vunani hasn’t offered insurance in the past but with management of MetLife Swaziland will hold 67% stake in MMI
MMI has sold its majority stake in Metropolitan Life (MetLife) Swaziland to Vunani for R55m. The insurer announced its intentions to exit Swaziland, as well as Mauritius, Mozambique, Tanzania and Zambia in September 2018.
MMI struggled with volatile earnings, internal control problems as well as leadership challenges in these markets. Although the Swaziland operations were profitable, MMI’s latest annual report shows that Swaziland contributed just 3% of new life insurance sales from the Southern Africa operations in the 2018 financial year, making it a much smaller operation compared to Namibia, Botswana or Lesotho, which contributed 46%, 31% and 201%, respectively.
Vunani CEO Ethan Dube, however, said MetLife, which has assets in excess of R675m, had strong cash generation and well-established, recurring premium business. Metropolitan Life and Momentum opened offices in Swaziland in 2008 before the two merged in that country in 2010. MetLife now owns 100% of Momentum Insurance Swaziland.
The black-owned Vunani has a diversified financial services portfolio spanning asset management, asset administration, investment banking, and stock broking, but until now did not have an insurance unit.
“This transaction sees Vunani, a financial services group, expand into life, short-term and health insurance in partnership with the highly experienced local management team,” Vunani said in a statement.
Vunani, together with the current management of MetLife Swaziland will hold 67% of the company, while the other 33% will remain in the hands of Eswatini Bank, which bought the stake in 2010. The acquisition is still subject to regulatory approvals.
Vunani said it was approached by MetLife Swaziland management to help it raise capital for buying out MMI, but saw an opportunity to invest itself. The company plans to rebrand the Swaziland operations, which include long-term insurance, as well as short-term insurance and health benefits offered through Momentum.
Dube said MetLife was an “ideal springboard” for Vunani to diversify its financial services portfolio given that the insurer played in the entire insurance value chain, from motor to life insurance and retirement products.