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Clientéle acquires consumer champion Switch2 to create a strong synergy for future growth

23 January 2018Iain Hume, Clientéle

The Clientéle Limited Group, one of South Africa’s leading direct distributors of financial services products, has increased its footprint in the consumer services market with the recent acquisition of Switch2 (Pty Ltd)– a credit life insurance provider.

“Clientèle is excited to welcome Switch2, a dynamic credit life insurance provider, into its growing family of financial services tied together by a common thread – safeguarding clients’ worlds with compassion. Bringing Switch2 into our stable was a compelling proposition as we are always looking for ways to broaden our services to the consumer, and credit life is one of the areas we want to expand in, so Switch2 is a natural fit,” said Iain Hume, Group Financial Director of Clientéle.

During August this year, the final credit life insurance regulations became effective and the amendments to The National Credit Act (NCA) ensured that no more than R4.50 per R1000 could be charged for credit life insurance on new hire purchase (HP) or loan agreements. This change was in response to an industry average for credit life policies of R7/R1000, with some insurers charging as much as R57/R1000.

Anticipating this change, Switch2 was launched in October 2016 with the aim of ensuring that South African consumers who had HP agreements predating August 2017 could also benefit from substantially lower premiums. In terms of the National Credit Act (NCA) and Consumer Protection Act (CPA), South African consumers cannot be tied into a prescribed service provider and can thus change their credit life insurance policies without incurring prejudice.

“When consumers realise how much they can save, they are very keen to switch,” said Sasha Knott, CEO of Switch2. “We have a really active call centre, but we realised that we needed further investment into the business in order to grow to the next level.

“When we started talking to Clientéle the synergy was immediately apparent. We are on the same page in terms of our commitment to the consumers, and we were impressed by their customer service ethic.”

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