Santam acquires stake in MultiChoice’s general insurance business

Santam, South Africa’s largest short-term insurer, has concluded agreements with Sanlam Life Insurance Limited (‘Sanlam Life’) for the purchase of 60% of the A1 Ordinary Shares in MultiChoice Group’s (MCG) insurance business, NMS Insurance Services (NMSIS), for an initial cash consideration of R925 million.

NMSIS is a registered South African composite micro-insurer and authorised financial services provider and is licensed to underwrite both general and life insurance products in South Africa. It has been underwriting insurance cover for the past 20 years under the DStv brand of MultiChoice focussing on device, installation, funeral, subscription waiver and debt waiver insurance products.

In June 2024 Sanlam announced that it had acquired a 60% shareholding in NMSIS. The NMSIS shares are comprised of two separate classes, i.e. Ordinary Shares, which entitle the holder to distributions related to the life insurance products, and the A1 Ordinary Shares which entitle the holder to distributions related to general insurance products.

The NMSIS business has a profitable device insurance book and allows Santam the opportunity to cross-sell other general insurance products to the MCG South African subscriber base. The partnership will be limited to MultiChoice’s estimated 8 million South African client base. The acquisition will further extend Santam’s reach to serve the under-served market and therefore drive the uptake of insurance and penetration to narrow the protection gap.

Gloria Tapon Njamo, CEO of Santam’s Partner Solutions business, said the acquisition was an acceleration to the company’s strategy, which seeks to explore new market segments through partnering with other corporates.

“A key strategic pillar and growth vector for Santam is partnering with companies like MultiChoice, which presents us with a unique opportunity to create substantial mutual value. With a base of approximately 8 million subscribers in South Africa, MultiChoice provides a robust and scalable channel for Santam to distribute tailored general insurance products,” said Tapon Njamo.

“As Santam we will leverage our experience in device insurance to increase the penetration of related general insurance products into the MultiChoice subscriber base. MultiChoice’s integrated payments platform has the potential to present a solid foundation for offering affordable value-added general insurance products to drive our passion for advancing financial inclusion sustainably through frictionless bundling of payments for services,” she added.

Santam will fund the acquisition amount from existing cash resources.