King Price looks to Europe to consolidate growth
After acquiring Stangen from African Phoenix, insurance group expects to make announcement on European acquisition
After acquiring local insurance company Stangen from JSE-listed investment holding company African Phoenix for R140m, King Price plans to expand into Europe.
A move into Europe will provide it with a new avenue for its growth.
“We are busy working on a European acquisition in the short-term insurance industry, which we think will be able to deliver growth on a par or even exceeding what we have enjoyed in SA,” says King Price CEO Gideon Galloway.
The acquisition, as with Stangen, will be small and will be funded from existing resources. Galloway says a listing is not on the cards.
“We have learnt to make a little bit of capital go a long way. So we don’t waste money on big products, we do small tests on business ideas to see if it works, and then scale it up. This way of doing things has really been effective for us,” he said.
The European acquisition will be its first out of the country and it is expected to announce the deal shortly, but would not disclose its target.
African Phoenix inherited the business when it was spun out of African Bank after the collapse of the lender in 2014.
Stangen offers a range of life insurance products, including funeral policies, that will complement King Price’s short-term insurance offering.
“The idea would be that we launch our own life business in the next six to 12 months under the King Price brand. So we would have two brands operating under the same licence,” said Galloway.
King Price, which was founded in 2012 by Galloway, says the Stangen acquisition will help sustain the company’s impressive 40% compound annual growth, which will see the company break through the R2bn gross premium mark this year.
In much the same way as its existing business is offered, King Price life insurance products will be sold through multichannels, which includes through traditional brokers as well as digital channels such as the internet, app or call centre.