Alexander Forbes plans to offload insurance units
Pension fund administrator says selling group risk, retail life and short-term insurance divisions will help cut its regulatory requirements
Alexander Forbes plans to sell its insurance businesses, the financial services group said on Tuesday while announcing a shift in strategy towards an “advice-led and capital-light model”.
The pension fund administrator said it would look for a buyer for its group risk, retail life and short-term insurance units. By offloading those operations, the company’s regulatory requirements would decrease, it said.
“The disposal of these premium businesses will be based on a value proposition that balances appropriate solutions for our clients, protects and values the employees who have contributed to the success of these businesses, and realises fair value to our shareholders.
“A new owner will be able to continue its success and fuel future growth through additional investment,” the group said.
Alexander Forbes’s insurance businesses generated R1.3bn in revenue in the six months ended September 2018, versus total revenue of R3.4bn.
“We will return surplus capital to shareholders taking cognisance of potential investment opportunities that lie ahead.”
The group also said it wanted to grow its consulting, administration and investments businesses by acquiring a “similar focused employee benefit business that supports our strategy”.
It would also exit “subscale markets” such as Uganda.
Alexander Forbes CEO Dawie de Villiers said the group’s strategic review of its businesses would “accelerate the competitive position we already occupy in our core business of consulting, administration and investments”.
Earlier in March, the group announced that Bruce Bydawell would take over as finance chief from April 1, filling a position left vacant when former CFO Naidene Ford-Hoon resigned in October 2018.