Liberty Holdings Chief Executive Bruce Hemphill is succeeded by Thabo Dloti

The appointments follow the implementation of a carefully considered succession plan, which will enable the group to successfully transition to the next phase of its growth and expansion.

 

Liberty Holdings Chairman, Saki Macozoma said: "Bruce Hemphill leaves Liberty in a very strong position with the 2013 results being the best in more than 10 years, a testament to the success of the strategies implemented. He successfully steered the business through the global financial crisis and led the organisation on a path of extensive transformation and growth while delivering significant value to shareholders.

 

Today Liberty is a strong, well-managed and diversified business that is once again a market leader. Liberty is the largest insurance writer by risk premiums in the affluent market in SA with 27% market share; the largest unit trust provider (incorporating money market funds), and with Standard Bank, is the largest bancassurance partnership when measured by the volume of new business. Furthermore, the group has a strong transformation culture and is now a Level 2 BEE contributor.”

 

Hemphill closes this chapter with outstanding financial and operational performance.

 

Hemphill became Chief Executive of Liberty in June 2006, having served as CEO of STANLIB, deputy CEO of Commercial Banking at Standard Bank, and CEO of Investment Banking at Standard Bank.

 

Key milestones during Hemphill’s tenure include:

 

o Collapsing the Liberty Holdings pyramid structure:

• At the time, Liberty Holdings was the pyramid holding company of Liberty Group Limited with a market capitalisation of R8.7 billion. Today Liberty Holdings has a market capitalisation of R36 billion and headline earnings of R4 billion.

 

o The establishment of LibFin:

• LibFin was established in 2008 and has provided the Liberty Group with a combination of investment banking, insurance and asset management skills and the necessary supporting infrastructure to enable it to take both an integrated view of the group’s balance sheet, and to disaggregate these balance sheet risks in order to facilitate their transfer into capital markets when opportunities arise. The market has found this offering difficult to replicate and the resulting reduction in market risk has released between 25% and 50% of capital for deployment more optimally elsewhere, while increasing net profits. LibFin has delivered reduced earnings volatility, reduced capital utilisation, and increased investment product sales.

 

o Diversifying the business:

• Liberty Holdings increased its shareholding in STANLIB in 2007 from 37.4% to 100% for a consideration of R1.686 billion. This investment has delivered exceptional value, with STANLIB now valued at R5.7 billion. The value of the investment doubled in the period, and in the process, STANLIB has been transformed from a life-company owned captive asset manager to a third party asset manager with new capabilities in unlisted debt, pan African equities and direct property. Group assets under management and asset management cash inflows have increased to R611 billion and to R15.7 billion respectively.

• From being a domestic life insurance company, Liberty has expanded geographically, and leveraging the advantage of Standard Bank’s footprint, has now established a presence in 15 African countries, across multiple product lines and distribution channels. Its insurance operations outside of South Africa delivered earnings of over R100 million (before non-controlling interests) placing Liberty in a good position to participate in sub-Saharan Africa’s growth.

• Investments in a direct offering, now fully integrated into the retail business, and health, have along with properties and the traditional insurance business, expanded Liberty’s product offering and distribution capabilities.

 

o The turnaround of the Retail SA business:

• Substantial investment was required to transform retention losses and a declining market share in Liberty’s largest business, Retail SA. Problems surfaced during the global financial crisis meant that a fundamental rebuild of systems, operations, management information, and the financial adviser value proposition was required. This rebuild has delivered significant returns with the insurance business achieving its highest new business sales, indexed premiums, Value of New Business and cash flows in 2013. Importantly, this business is once again at the forefront of product and distribution innovation in SA.

 

o Fixing and expanding the Corporate business

• Traditionally Liberty Corporate was run as an extension of the retail insurance business and it faced enormous compliance and regulatory challenges, lagging in performance. Today Liberty Corporate is a standalone business which has successfully resolved its challenges and is a genuine competitor in the large corporate market in SA, with indexed new business increasing 29%. This establishes an excellent platform for growth in South Africa and sub-Saharan Africa.

 

o Maximising value from the commercial bancassurance agreement with Standard Bank:

• The bancassurance agreement was restructured and expanded from being purely SA retail insurance based to include off balance sheet investments, health, direct channels and all geographies in sub-Saharan Africa. The joint venture has generated combined value of R1.3 billion in 2013, making it one of the largest bancassurance partnerships in the country.

 

Succession

 

Liberty is well served by a diverse, dynamic and highly experienced management team that Hemphill has established over the past five years. Dloti and Braudo are existing members of the Liberty Holdings Board of Directors and have been on the Liberty Executive Committee for the past four and five years respectively. They have been an integral part of the group’s turnaround and the development of its strategy. This provides continuity from both a leadership and strategy perspective, building on the direction and progress achieved during Hemphill’s tenure.

 

Dloti (44) has over 20 years of experience in retail insurance, employee benefits and asset management businesses with a proven track record of success. He joined Liberty in March 2010 to head up Liberty’s institutional businesses comprising STANLIB, Corporate and Properties. For the past four years he has led the successful transformation of STANLIB. Dloti has been appointed Chairman of the STANLIB Board of Directors.

 

Braudo (42) has over 20 years of experience in the insurance and investment industry. He joined Liberty in June 2009 to lead the Retail SA insurance business. He led the Retail SA turnaround, a track record that speaks for itself. Braudo has been appointed to the STANLIB board of directors.

 

The combination of these two leaders provides an exceptionally strong leadership dynamic to deliver Liberty’s vision of being the trusted leader in insurance and investment across Africa and other chosen markets in the future.

 

Seelan Gobalsamy (38) will succeed Thabo as Chief Executive of STANLIB. Gobalsamy has over 15 years of experience in the insurance and investment industry. He joined Liberty in December 2010 to lead the Liberty Corporate business. Seelan is experienced in managing complex businesses and building cohesive teams.

 

Mr Macozoma concluded: "I would like to take this opportunity to thank Bruce for his leadership in successfully transforming Liberty into an organisation that has delivered considerable value for shareholders - an investment in Liberty Holdings shares in June 2006 would have delivered a cumulative return of 180% including dividends by December 2013. As today’s results demonstrate, Liberty has become a company that offers excellent prospects for growth once again.”