Leading short-term insurer Santam and specialist financial services group Investec today announced their intentions to enter into an agreement whereby Investec Private Bank would sell its short-term insurance businesses to Santam.
According to Santam CE Ian Kirk (pictured), the parties have signed a memorandum of understanding outlining the intent of both parties to proceed with the sale of the businesses. Within the next month, a sale agreement will be concluded, whereafter the necessary regulatory approvals will be obtained.
“The businesses will be bought into a new entity of which Santam will initially have 100% shareholding,” Kirk said. “Negotiations are underway to appoint an independent third party to assist us with the management of certain aspects of the new business.
“We have underwritten Investec’s short-term insurance business for a number of years. The Investec businesses represent a substantial income stream for Santam and given our longstanding relationship with the Investec Private Bank insurance businesses, this was an ideal opportunity for us.”
According to Paul Hanley, Head of Investec Private Bank in South Africa, the decision followed a strategic review which found the insurance business non-core to the private banking business model.
“We are pleased to have entered into this arrangement with Santam, which will not only benefit our clients and our staff, but will ensure the sustainability for this business going forward,” Hanley said.
Both Hanley and Kirk assured Investec clients that the transaction should not have any impact on the day to day management of their insurance affairs.
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