Channel poised for even more growth

Channel Life, one of the leading entry-level life insurance companies in South Africa, has announced a change to their management structure, which will position Channel Life and its majority shareholder Sanlam for further expansion.

Channel Life Chairman Leon de Wit, today announced the appointment of a new CEO, the sale of a 50% stake in subsidiary Alfinanz to Sanlam and the redeployment of a senior executive to spearhead a new Sanlam-led group initiative, which includes third parties.

During the last two years, Channel Life has shown its competitors that exponential growth in the entry-level life insurance market is possible, said De Wit. Our two major shareholders - Sanlam and PSG are happy with the performance of their investment and there is no question that the Channel Life leadership has played an important role in this performance, with Ren Otto as CEO driving strategy.

Otto, who has a tried and tested pedigree when it comes to innovation and creativity, was responsible for creating several new distribution channels, including a large call center, a network marketing business, the establishment of an independent broker division and more recently, the provision of financial services directly to deep rural areas.

Otto will drive the new Sanlam-led initiative from July and he will be replaced by Lennie Louw, who has a sound history with Channel Life, going back to his days as MD of Channel Life Namibia.

The Namibian operation was one of the success stories in the early days of Channel Life, says De Wit. When we sold the Namibian business in 2004, Louw and his senior team relocated to South Africa and launched Channel South, which, within two years became the biggest single contributor to the new business growth.

Louw has a well-earned reputation as an astute businessperson with specific experience in the sustained business development and growth of entry-level life insurance businesses. It is this expertise and experience, combined with his proven business management skills that will take Channel Life to the next level, says De Wit.

On the Alfinanz deal, De Wit announced that Sanlam is to acquire 50% of Alfinanz from Channel Life and Channel Life will hold the remaining 50%.

Alfinanz is essentially an administration factory, says De Wit, that renders back office administration and technology services to Channel Life and other third parties. The strategy for Alfinanz is to extend its capabilities to the other entry-level players within the Sanlam Group Safrican and the South African operations of African Life, with African expansion following at a later stage.

Clearly, the spin-off for Channel Life lies in reduced administration costs, as the Alfinanz platform becomes even more economical on the back of increased volumes.