A new exclusive strategic alliance between financial services firm Sanlam and telecommunications giant MTN Group will see increased access to Sanlam Group insurance and investment products across Africa, further developing MTN’s mobile financial services business.
The partners aim to build a digital insurance and investment business throughout the continent, with the potential to pre-empt and adapt to digital disruption in markets where both Sanlam and MTN operate, particularly in regions where citizens have been unable to access traditional insurance and investment distribution channels for such products.
The alliance will build and leverage the strengths and assets of both Sanlam and MTN to establish a digital insurance and investment capability across Africa.
While about 46% of Africa’s population has access to and makes use of cellphone services, insurance penetration remains low at less than 5% in most markets, except South Africa.
The collaboration will provide Sanlam with an opportunity to extend consumer access to its products and grow its operations by providing insurance to MTN’s customer base across the continent, while MTN can accelerate and scale its InsurTech offering, as well as provide more value-added services and enhance its existing offering, by leveraging Sanlam’s licensing and geographical footprint, as well as its broad product capabilities and expertise.
MTN’s InsurTech businesses, which currently have about six-million active policyholders, is targeting over 30-million policyholders by 2025 with this new alliance.
“MTN has built a scale fintech business with over 100-million wallets, of which about half are actively using Mobile Money services every month, presenting a meaningful opportunity to further drive financial inclusion through the provision of appropriate insurance and investment solutions,” says MTN Group president and CEO Ralph Mupita.
“It gives us great pride to be able to partner with MTN to build the best possible range of solutions in the insurance and investment arena for consumers. We anticipate strong long-term growth in mobile financial services and insurance and investments are no exception to this,” adds Sanlam Group CEO Paul Hanratty.
In the initial period, the alliance will be chaired by Mupita, with Hanratty as deputy chairperson.
The transaction remains subject to the parties concluding definitive agreements and completing the relevant suspensive conditions.
MTN has a presence in 17 countries across Africa, with more than 270-million subscribers across its total 21 markets. It is also a large fintech operator, with a presence in 19 countries and 100-million wallets, 800 000 agents and 650 000 merchants signed up.
Sanlam is the largest nonbanking financial services group in Africa, with a presence in 33 countries across the continent. Forming mutually beneficial partnerships is part of Sanlam’s business model and is a key pillar for accelerating growth on the African continent.