FANews
FANews
RELATED CATEGORIES

Lion of Africa to close its doors

14 November 2018Jonathan Faurie

South Africa’s tough economic climate has had a poignant effect on the financial services industry. Some of the challenges we as an industry face, which is probably similar to many industries, are generating new business, retaining clients, staying profitable and keeping skills within the company relevant. Some get it right, others don’t…

On 13 November 2018 FAnews received a letter from a reader which was sent to all Lion of Africa Stakeholders in which the company announced that it would be closing its doors. 

Dear Business Partner 

LION OF AFRICA INSURANCE COMPANY TO CLOSE 

The Board of Johannesburg-based short-term insurer, Lion of Africa Insurance Company (“Lion” or “the Company”), has decided to voluntarily and systematically wind down operations with immediate effect. Over the past few years Lion has experienced a lack of profitability and a tough operating climate in its chosen markets which combined with an onerous regulatory environment and increased solvency requirements contributed to this decision. 

The decision was not taken lightly and significant efforts were made to find alternative solutions.  Notwithstanding our efforts the Company is being placed into “run-off”.  Lion will continue to meet all obligations under existing policies but will not be issuing any new policies.  We wish to give all policyholders our assurances that all valid claims will be honoured, and complaints and queries lodged by policyholders will be addressed. 

The Company has already informed its employees and the Regulator of its decision. Our employees worked hard over the years to build a solid brand and together with the management team and the Board, did everything possible to get the business on a sustainable and profitable path.  Our hearts go out to the employees and their families. We have acquired the services of counsellors to assist them to deal with this difficult situation. 

We wish to thank you so much for your support. Without you, we would not have been able to grow the business and serve you to the best of our ability.  In the coming months we will be working on “running-off” the business. We will make sure we meet with as many of our stakeholders as possible. This will enable us to ensure that the “run-off” of the business is completed in an orderly fashion and none of our clients are negatively affected. 

I thank you. 

Anees Vazeer

Acting CEO

Lion of Africa Insurance Company   

Editor’s Thoughts:
This is a sign of how significantly a poor economic climate can affect the financial services industry. We hope that there is positive news in 2019 and that government can resolve the country’s economic woes. It is now critical to make sure clients are not affected. Please comment below, interact with us on Twitter at @fanews_online or email me your thoughts jonathan@fanews.co.za

Comments

Added by John, 15 Nov 2018
To the editor: I would say, "This is a sign of how significantly a poor economic climate can affect 'badly managed' financial services industry.
Although most businesses experience the strain of a recession and five years averaging no more than 2% on the GDP, mismanaged businesses are culled. Lion of Africa is such a case. It is no coincidence that MMI had joined forces with them.
Report Abuse
Added by Sathie Arunachellam, 15 Nov 2018
It is indeed a sad day in the history of the insurance industry in South Africa
We cannot blame an investor if he is not benefitting from his investments and wishes to withdraw .It is his/her monies that go into ensuring that we have a successful but sometimes one fails

We need to ensure that there is growth in our economy

We hope that another company comes to the rescue


Report Abuse
Added by liselle, 15 Nov 2018
To us... JBLeRoux Brokers... very sad for everbody involved... we were part of LOA since 1999.. and we can truelly say that they gave us tremendous service & support! Will always think back to a magic era.,!
Report Abuse
Added by liselle, 15 Nov 2018
To us... JBLeRoux Brokers... very sad for everbody involved... we were part of LOA since 1999.. and we can truelly say that they gave us tremendous service & support! Will always think back to a magic era.,!
Report Abuse
Added by Andre Stols, 15 Nov 2018
this is very sad as the reality of the ANC Govt mismanagement is striking at ground level. This causes the Short Term Insurance Industry to shrink every year as clients, due to the financial pressure caused by ANC mismanagement of the country, are forced to cut on their costs and starting to do so by cutting on their Insurances. voters, do not vote ANC or EFF as you would dearly like to have a strong opposition next year at the Polls.
Report Abuse
Added by CA65, 15 Nov 2018
Bad economy or bad management? Wasnt this a BEE setup?
Report Abuse
Added by Michelle Potgieter, 14 Nov 2018
We as small brokers got rid of all business tied to Lion of Africa in October 2017 how come the FSB/FSCA did not see this after we complained to them last year
Report Abuse

Comment on this post

Name*
Email Address*
Comment
Security Check *
  
Quick Polls

QUESTION

Between 1918 and 2014, 32% of all of Lloyds of London’s insured losses were caused by flooding. With Climate change becoming a growing issue, is this a growing concern for insurers?

ANSWER

Yes, we have seen a significant increase in flood related losses
No, there will always be flood related losses. We are prepared for this.