It has never been easy to put a value on Hollard, the unlisted insurer. But Tokio Marine, Japan’s oldest insurer, has just bought 22.5% for $327m, which would value the whole group at about R21bn. But Hollard is no longer the niche disrupter of the 1990s — it is a very large business, writing R25bn a year of premium income.

Hollard CEO Saks Ntombela says the 22.5% holding is just enough to cement a co-operative relationship — but so not so big that the culture is diluted. Hollard’s freewheeling, informal style doesn’t look too compatible with the formal suits and bowing of Japanese corporates.

But Tokio Marine CEO Tsuyoshi Nagano says Hollard’s approach to business is very similar to its own — maximising long-term partnerships rather than building monolithic operations in-house. Ntombela believes that Tokio Marine, with best practice in predictive analysis, robotics, risk management, underwriting and insurtech, should provide some of the tools to help develop insurance for the next 50 years. And it will provide greater access to global reinsurance markets.

Tokio Marine’s premium income is about 6.5 times that of the entire SA industry.

Hollard and Tokio Marine already have a joint venture in Indonesia, which has an economically active population of 100-million, about the same as Nigeria. But Indonesia is an easier place to do business, Ntombela says. "We like to get into a new country with a local partner, and with all the hype about Nigeria, the multiples the local companies want us to pay are insane," he says.

With Tokio Marine, Hollard can expand in Africa and Southeast Asia without a further capital raising. A potential listing of Hollard, always remote, is now even further away. But Ntombela says Hollard is evolving from a medium-sized family-owned business into a much larger and more sophisticated group. The Enthoven family, who own Hollard, have been excellent custodians, but times change.

Today, the group is more structured and over time there will be greater use of the Hollard brand. Most of the underwriting managing agencies, such as Altrisk, have become divisions of the group. It has retained taxi insurer Clarendon Transport Underwriters, run autonomously by its own management. There are other units focused on pets and travel.

A new underwriting agency has been set up too, led by former Hollard CEO Paolo Cavalieri, to cover specialist areas such as liability, especially in relation to cybercrime.

Willie Lategan: Better to join the disruptors than to let them eat your lunch
Willie Lategan: Better to join the disruptors than to let them eat your lunch

In the streamlined company structure, the four pillars are insurance under Willie Lategan, partnerships under Angela Mhlanga, international under Mandla Shezi, and life, which does not have a division head right now.

Lategan, who ran nonbanking operations at Absa, says the group’s personal lines insurance is still primarily supported by brokers who generate premium income of R2.5bn, five times the direct figure. It has never really tried hard to sell to the mass market, so it has just 50 people in its call centre, compared with the aircraft carrier-sized centres at Telesure, MiWay and Outsurance.

But still, Hollard is innovative: it was ahead of its time with the Pay As You Drive insurance product, which came out years before the current telematics driver-monitoring systems.

Hollard is also the preferred provider of insurance for WesBank — in preference to any of the insurers related to the wheels bank such as Discovery Insure and Outsurance, or even the new FNB Insure. It also provides life cover for account holders at Edcon, as well as insurance for the cellphones it sells. This business has been a slow grower recently, given the loss of market share at Edcon, but the partnership remains profitable. Hollard also works with Truworths, Ackermans and Pick n Pay.

Ntombela says one disappointing area has been savings and investment. "We have a strong-selling funeral policy in the mass market, but we are not convinced that we can offer a value-for-money savings product on our life licence." It has a suite of unit trusts but punches well below its weight with about R3bn under management. It needs to do a transformative deal; perhaps Absa Asset Management, now for sale, is the answer.

Hollard has just dropped the Regent brand one year after the R1.8bn purchase of the life and short-term business was approved. The Regent campus in Edenvale has been vacated and everyone either sits in the Hollard head office in Parktown or in the old Rennies offices in Braamfontein. Regent, which had expertise in trucking insurance and had a competent life division, still gets business from its old parent, Imperial (largely the Motus part of it). It was one of the top players in the Botswana market, and the combined business is now the largest short-term insurance business in that country, and second to Santam in Namibia.

Hollard keeps an eye on insurtech and its highest-profile venture is Naked — an independent business that uses the Hollard licence. Lategan says it is better to join the disruptors than to let them eat your lunch. Naked can load policies in a couple of minutes on its app and clients can stop and start cover at will.

Hollard is even going into banking for its mass-market clients with its own branded debit card, using the Bank of Athens licence.

Despite the Japanese deal, it seems Hollard will remain focused on Africa and other emerging markets. Yellowwoods, the Enthoven- controlled holding company, has other interests around the world — like Nando’s, which is everywhere. And there are even Hollard operations in Australia and New Zealand, but these do not report to Johannesburg. Yellowwoods also, perversely, owns a chunk of Hollard’s competitors, being Douw Steyn’s partner in Telesure and its UK and Australian subsidiaries.