Major Restructuring for Admiral Underwriting Group
Southern Africa's oldest, and second largest underwriting agency, Admiral Underwriting Group (Admiral), has announced a comprehensive shareholder restructuring following the sale by Glenrand MIB (GMIB) of its 48% stake in the company. Existing shareholder, Santam, will increase its current shareholding from 29% to 70% and key Admiral personnel will grow their stake from 23% to 30%. The transaction is subject to Competition Commission approval.
The restructure has been made possible by GMIB's stated strategic thrust to position itself as a pure insurance broker and employee benefits consultancy. Key to that ambition is the sale of all non-core investments, with Admiral being the last remaining underwriting agency in the portfolio to be sold.
Admiral was established in 1977 as the first local provider of Professional Indemnity underwriting capacity in the South African market. Over the past three decades Admirals offering has been extended from PI to a broad range of claims and underwriting services across a wide spectrum.
Over the medium term Santam has committed 15% of its 70% equity stake to a potential Black Economic Empowerment partner, whilst Admiral's internal shareholders anticipate that at least 10% of their 30% stake will be owned by Previously Disadvantaged Individuals.
Admiral Chief Executive Officer, Andrew Packman, says: "We are very excited that Admiral will be more closely aligned with the Santam group of companies. Santam is a quality player with solid leadership and our management team can only see positive outcomes from this closer partnership. Admiral's key individuals will also increase their stake in the business, which will serve as a catalyst for high energy and innovative responses to customers' needs. We are already building a reputation for passion and innovation and these changes will help produce more positive energy for us as we strive to create solutions for our clients and other business partners."
Dudu Kunene, Chairman and Acting Chief Executive Officer of GMIB, says: "The disposal of Admiral is in line with our stated strategy to return to core business."
The positive trading relationship between the two parties is expected to continue into the future.
Santam comments: "Admiral is a long-standing business partner of Santam and we believe that the deal will strengthen this relationship. Santam is also excited about the opportunity to advance our BEE strategy and our commitment towards sustainable business development."
Packman continues: "Our primary objective was to ensure that our 30 year old brand would trade on. Significantly, this transaction will not only protect the Admiral brand and culture, but create new opportunities as well; in this regard we anticipate a positive response and increased support from the mainstream brokers."
Gareth Beaver, Admiral Managing Director, says: "Santam has been a shareholder in Admiral for a number of years now, and we are very pleased to have a company of their stature as our majority shareholder. At the same time the increased level of management ownership will promote a culture amongst our people which is somewhat different to that typically found in large institutions where shareholders and employees are not the same persons. Overall, the new shareholding mix represents a good balance, combining the security of a major blue-chip financial institution and the entrepreneurial spirit and passion found in owner managed businesses."
Packman concludes: "Admiral will process more than R500m in premiums in 2007 for our various principal insurers, entrenching our strong presence in Southern Africa. The company has built its solid success and reputation on a "people first" philosophy and a set of values which are lived and not just talked about. We see an exciting future ahead as we reach out to connect with more and more quality people ensuring that we continue to grow from strength to strength."
