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Alexander Forbes open for deals after insurance sale to Sanlam

On the hunt for businesses to acquire to build out its employee-benefits offering.
Image: Guillem Sartorio/Bloomberg

Alexander Forbes Group Holdings is on the hunt for businesses to acquire to build out its employee-benefits offering after finalising plans to exit its insurance arm.

The South African retirement and investment adviser is boosting its surplus capital and selling its risk and retail business operations — which had insurance premium income of R1 billion ($72.7 million) at the end of March — to Sanlam Ltd.

The R100 million deal draws to a close a strategy of ending capital-intensive activities, following disposals in Uganda and Zambia, and allows the firm to focus on adding scale in its focus areas.

“It’s about new business and about more acquisitions as the market consolidates,” Chief Executive Officer Dawie de Villiers said in an interview on Monday. As a result of “Covid, we are seeing much more engagement with players that were not at the table in the past.”

The firm plans to bulk up in administration and consulting, while also boosting its assets under management, as South Africa expects its economy to rebound by 4.2% this year. Moves by the government to tackle corruption and make progress in addressing challenges at state-owned companies are among the factors raising the firm’s optimism in its home market, De Villiers said.

“In our engagement with corporates we don’t see any of them planning large-scale retrenchments,” De Villiers said. “It’s very positive for South Africa.”

© 2021 Bloomberg

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Is Aforbes being sold off/dissolved?

No, my understanding is that they want to move away from the type of business where they were involved in one-on-one sales, and concentrate on large groups. They sold short-term to Momentum and Life to Sanlam, the corporate employee benefits and investments are going to become their core business.

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