Step aside technical recession, South Africa is open for business

10 September 2018 Jonathan Faurie
Saks Ntombela, Hollard Group CEO and Tsuyoshi Nagano, President and Group CEO of the Tokio Marine Group, signing an MOU earlier this month.

Saks Ntombela, Hollard Group CEO and Tsuyoshi Nagano, President and Group CEO of the Tokio Marine Group, signing an MOU earlier this month.

When Cyril Ramaphosa took over as President, he made no bones about the fact that the South African economy was in a worrying state and that an environment that encourages foreign investment needed to be created.

Hollard took a massive step towards achieving this ideal when it announced on 6 September that a major acquisition by Japanese insurance giant Tokio Marine Group was being finalised. Subject to regulatory approval, Tokio Marine will acquire a 22,5% stake in Hollard South Africa and Hollard International for approximately R5 billion. 

FAnews spoke to Hollard CEO Saks Ntombela to find out more about the investment and what it means for Hollard and the rest of the financial services industry.

 Heavy hitters

Tokio Marine is the largest insurance group in Japan and is one of the largest insurance groups in the world. 

The group was established in 1879 and employs almost 39 000 people in 38 countries and regions around the world. The group has reported ordinary income of just over ¥5 232 billion (which was R725 billion at the 6 September exchange rate). 

This means that Hollard will have access to a significant amount of capital that it can use to expand the company. 

“Hollard has an ambition to build an emerging market financial services company that is focused on serving the African and South East Asian market. The Tokio Marine acquisition gives us access to the capital and technological skills that are necessary to realise this ambition,” said Ntombela. 

This is also big news for South African insurers is this will allow international insurers to see scope for growth in the South African market and will bring along opportunities for South African based insurers to have a bigger impact on the continent. 


Japan has traditionally been at the centre of technology and automation. It was one of the first countries in the world that made the mass production of motor vehicles by automated processes possible, and it was this innovation that built brands like Toyota and Honda into the global super brands they are today. 

Japan has never lost sight of this automation and has been at the epicentre of the Fourth Industrial Revolution; companies like Tokio Marine have used technology extensively in their businesses. 

Through the Tokio Marine acquisition, Hollard will have access to, among other things, best practice from Tokio Marine in the areas of predictive analytics, robotics, risk management, underwriting and insurtech innovations. 

“Tokio Marine has a lot of knowledge, skills and experience when it comes to predictive analytics in particular. This is something that will have a major impact on the insurance industry going forward,” said Ntombela. 

Skills transfer 

“Tokio Marine has a lot of technological skills that we need to take advantage of. The rate of change when it comes to technology is going to increase exponentially in the coming years and no single insurer will have the capacity or time to invest in technology that will serve all their needs. The secret to success is to partner with a company and to tap into their knowledge and investment,” said Ntombela. 

Ntombela adds that Tokio Marine has expressed interest in tapping into Hollard’s knowledge and skills in developing mass market distribution models. This is already happening through a joint venture company that Tokio Marine and Hollard have set up in Indonesia which focuses on direct insurance. 

Further, Ntombela points out that there will be a cross border skills development programme in the future. Five Hollard employees are already involved in the Indonesian joint venture. In the future, Tokio Marine staff members will be coming to South Africa to gain some key insights into Hollard’s skills.  

Growth ambitions

“One of the main reasons for the acquisition is that the Tokio Marine Group see Africa as a growth market and we as Hollard did the deal because it will help us to accelerate our growth in Africa and South East Asia. We have partnered with Tokio Marine in the past, so this acquisition is the formalisation of a longstanding business partnership. The deal will hopefully be completed by the end of the year,” says Ntombela.  

Editor's Thoughts:
This acquisition is big news as this is a significant investment in the South African and African insurance markets. Please comment below, interact with us on Twitter at @fanews_online or email me your thoughts

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