Old Mutual Insure says it will continue to explore acquisition and partnership opportunities to grow its market share by 9%.
- Old Mutual Insure says it will continue to explore acquisition and partnership opportunities.
- In January, the company acquired a 51% stake in underwriting management agency ONE Financial Services Holdings.
- It has partnered with other companies to sell its products, including InsurTech competitor Pineapple.
This is likely to be a busy year for Old Mutual’s short-term insurance division, Old Mutual Insure. After buying 51% of underwriting agency ONE Financial Services Holdings in January, Old Mutual Insure said it was continuing to study acquisition options and opportunities for inorganic growth in the business.
The insurer, which owns iWYZE, Mutual & Federal Risk Financing (MFRF) and Credit Guarantee Insurance Corporation (CGIC), published its integrated annual report on Thursday. In this report, the company said it has developed an acquisition strategy. It also has “comprehensive partnership plans” to help it drive growth in 2022 and beyond.
“OM Insure will continue to explore acquisition options and growth opportunities for the inorganic business. Our current market share of 9% provides us with ample upside room, particularly in the direct channel,” said the insurer’s chief executive, Garth Napier.
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iWYZE is OM Insurer’s direct short-term insurer, selling gap coverage, home, auto and other short-term insurance products to retail consumers. It also launched direct commercial insurance for small businesses in 2020. It is the smallest company in the OM Insure stable, with R1.14 billion in gross written premiums collected in 2021.
MFRF, the group’s cellular captive insurer that offers insurance to corporate clients like Guardrisk, is OM Insure’s largest subsidiary, with over R1.7 billion in gross written premiums collected in 2021. CGIC, the subsidiary which provides trade credit insurance across the African continent, is the second largest.
OM Insure already has a substantial market share in specialty insurance. He said CGIC’s market share in South Africa has increased to around 80% in 2021.
But there is still plenty of room for growth in iWYZE. In 2021, iWYZE increased its premiums by 12.9% compared to 2020, even if the retail direct insurance market is strongly contested by the large incumbents that preceded it, banks and new players in the InsurTech.
OM Insure said iWYZE was “getting ahead” and increasing its market share. It had approximately 158,000 by the end of 2021. OM Insure said expanding iWYZE’s product offering and partner network to continue to gain market share and make strategic acquisitions are its top priorities this year. .
Last year, the company developed on-demand insurance for iWYZE, Comma Insure, which allows customers to activate coverage as and when they need it. Since 2020, OM Insure has also entered into several partnerships to distribute its products through non-Old Mutual channels. One of them was the partnership with peer-to-peer player InsurTech Pineapple Insurance.
READ | Peer-to-peer insurance startup Pineapple is riding the e-commerce boom and investors are taking notice
And as OM Insure continues to grow through these partnerships and acquisitions, he said he was determined not to fall into the trap of trying to gain market share while shooting himself and the shareholders by selling inferior insurance products at a reduced price.
In 2021, OM Insure’s underwriting margin increased to 4.9%, rebounding from a loss of 2.6% in 2020. This margin, which measures the profitability of the business underwritten by insurers, was not than 0.4% in 2019. The company’s after-tax profit of R729 million was also more than double what it reported in 2019 and even more than the R705 million recorded in 2018.
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