FNB Insurance Brokers presses ahead with growth strategy

FNB Insurance Brokers, short-term insurance arm of First National Bank, is pressing ahead with its acquisitive growth strategy despite more challenging economic and trading conditions.

Since July last year it has concluded six transactions involving businesses with annual premium inflows of R105,5 million. The latest – a cross-border acquisition involving W C Knight & Associates – strengthens its marketplace positioning in Namibia. This business alone handles premium inflows of N$55 million a year.

Two additional transactions are expected to be finalised shortly.

Reserve Bank approval is awaited for the outright purchase of G D I Schofield Insurance Brokers in Durban (with annual premium income of R35 million) while negotiations are at an advanced stage for the acquisition of SN IB, a broker with strong focus on the Indian community in Durban and coastal KwaZulu-Natal.

Keith Young, the FNB Insurance Brokers director responsible for acquisitions, noted: “We are maintaining our programme of selected acquisitions as a key element of a three-pronged growth strategy. The other elements are aggressive new business growth through the deployment of professional sales teams and high levels of business retention through service excellence.

“Acquisitive growth has always been selective. We consider the geographic segment and the additional resources we can access as a result of the acquisition. The objective is to build critical mass in specific focus areas. In specific geographies we also look for ways of adding value to the overall service offering of our Group colleagues at First National Bank.

“Today’s business environment is more challenging, but this is a long-term programme and an integral part of a wide-ranging strategy to build our national footprint and strengthen our brand. Recent marketplace experience demonstrates the continuing importance of the broker model and we see no reason to call a halt.”

Transactions finalised over the last 11 months are: Hesterman Insurance Brokers, Pietermaritzburg (premium income of R4.5 million); Insurelink, Pretoria (R3,5 million); Malb Insurance Brokers, Johannesburg (R14 million), Die Makelaars Huis, Brits (a sub-agency agreement involving premium income of R17,5 million); Herring Estates Insurance Brokers, Ixopo/Pietermaritzburg (R11 million) and W C Knight & Associates, Windhoek, Walvis Bay and Otjiwarongo.