Hollard and Etana to ‘integrate’, says Hollard Group CEO
Nic Kohler, Hollard
Industry consolidation continues apace with the Hollard Group’s announcement that it will acquire the business and all remaining shareholder interests in Etana Insurance. Hollard currently has a 40% shareholding in Etana and the combined entity is expecte
According to Nic Kohler, Hollard Group CEO, the acquisition is a strategic opportunity for both insurers. “This isn’t an acquisition, it’s an integration,” he told FAnews yesterday. “We obviously want to preserve the best of both brands. Hollard has been under-represented in commercial and corporate business, so we reviewed our options and decided this was the best way we could expand.”
He said Etana was ‘first prize’ for Hollard because, like Hollard, it has carved out a unique position in the industry. Etana trebled the size of its business since it was formed in 2007, which says a lot about its drive in a highly competitive space.
It will be business as usual until regulatory and Competition Commission approval has been secured; however, it does look as if the ‘red’ brand may vanish over time. “Hollard is the better-known consumer brand, and we want to have an unfragmented brand,” said Kohler.
In the meantime, Etana’s events for good causes will go ahead – the 2013 daREDevil run, which is set to take place on 8 November, will be unaffected. The well-known Speedo run is all about taking a stand against cancer.
Creating more opportunities
Kohler says there will be no retrenchments; if anything, more business opportunities may be created. The new business unit that will be created in Hollard, to be headed by Etana chairman Paolo Cavalieri, will definitely be broker-focused, said Kohler. “In fact, we want to offer the best solutions for brokers, consumers … the entire industry,” he said.
Cavalieri was CEO at Hollard prior to becoming chairman at Etana. He is upbeat about the consolidation. “It’s obviously a bit tough because we’ve put so much into building the brand – I won’t lie and say that hasn’t caused some heartache – but the brand is really just a tangible reflection of the people who make up the business. We’re taking that strength and passion with us, and Hollard and Etana do have shared values. So in a sense it’s like going back home – it will be a comfortable place for us,” he told FAnews.
Both companies have a history of passionate innovation, which is why the post-transaction structure will take the best from each business and build on it.
“We responded favourably to Hollard’s approach because it’s a natural fit and because it provides us with a way of continuing along our growth path,” Cavalieri said. “By teaming up with Hollard, we are able to leverage the strengths of both groups to create an even more compelling proposition for brokers and clients.”
Both companies embrace brokers
There’s an alignment in terms of how both companies embrace brokers – over the years, they have both won multiple categories at the annual Financial Intermediaries Association Awards, indicating how the broking fraternity views their contributions.
“I think this will be good news for brokers in a period in which there hasn’t been that much good news,” said Cavalieri. “The top end of the insurer market has been chaotic and there hasn’t been much good news for brokers and their clients over the past three years. There hasn’t been much consistency and quality amid all the leadership and structural changes. We’ll be able to give brokers a serious alternative, which will be good news.”
Cavalieri also says that regulation has all but blunted and neutralised the relationship between insurers and brokers. Finding ways to add value to the relationship, other than price, will need to be found going forward – Cavalieri says a combination of Etana’s strong broker relationships and Hollard’s reputation for innovation could provide that value.
Editor’s thoughts:
Brokers will have something to smile about as Hollard and Etana join forces with premium income from short-term insurance operations amounting to over R10.6bn in the year to 30 June. Will the business integration be good for financial advisors? Comment below or email [email protected].
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