Alexander Forbes has agreed to sell its group risk and retail life business for ZAR100m (£5.15m, $7.26m, €6m) to Sanlam Life.
AF Life, which is a wholly owned subsidiary of Alexander Forbes, provides group risk and retail life insurance policies with a focus on small to medium clients.
The deal is in line “with the company’s strategy and stated intention to dispose of its insurance cluster” and the disposal of AF Life “concludes the group’s exit of its insurance businesses and delivers on the implementation of its advice-led and capital-light strategy”, the firm said in a Johannesburg Stock Exchange statement.
The business recorded gross insurance premium income of ZAR1bn for the year ended 31 March 2021 from over 630 institutional clients and approximately 3,700 individual clients.
Details
The sale and transfer of the AF Life policies will be for a total cash consideration of ZAR100m.
Some 50% of which will be deferred in two equal payments, 12 and 24 months from the sale date, subject to meeting targets.
Alexander Forbes said the proceeds of the deal “will form part of the surplus capital of the group”.
It added: “In line with our strategy of being capital-light, the board of directors of the company will assess the surplus capital and cash position in relation to the future liquidity and capital requirements of the group, its investments needs, and including any potential merger and acquisition opportunities.”
The deal is subject to regulatory approvals.
