Santam, a South African short-term insurer, has grown its stake in insurance technology (insurtech) company JaSure by acquiring the remaining 49% of the company's stock. This purchase positions Santam as the sole owner of JaSure with 100% ownership and control.
With the acquisition, Santam is looking to reposition itself in a conventional insurance industry that is becoming increasingly digital-savvy.
"We want to take advantage of JaSure's current and powerful customer experience as well as its younger market reach, while leveraging Santam's efficiency and larger distribution potential, including the Sanlam Group," said Edward Gibbens, executive head of the C&P insurance division at Santam.
The rise of insurtech in South Africa
The South African Center for Financial Inclusion (Cenfri) published a research report that showed how insurance technology is fast advancing in South Africa, with 51 insurtech initiatives now underway.
Below are a few highlights.
Through its Old Mutual Alternative Risk Transfer (OMART) program, Old Mutual is collaborating with Simply Financial Services.
"Under this agreement, we basically produce and market insurance products under the OMART license." Simply products are underwritten by OMART, which means they are the insurer with whom our clients have a contract and are liable for paying claims," said Simply founder and CEO Anthony Miller.
Pineapple, a Johannesburg-based insurtech firm backed by Compass Insure, earned first place and $1.5 million (R22 million) in VentureClash, a $5 million worldwide venture challenge organized by Connecticut Innovations for early-stage startups. In the same year, the insurtech start-up announced that it raised R5-million in a funding round led by Association for Savings and Investment SA (Asisa) Enterprise Supplier Development (ESD) Fund.
Nobuntu, a Cape Town-based insurtech firm, recently announced that it has received an undisclosed amount of funding from Blue Garnet Ventures to help develop and market its flagship savings product. Another Cape Town-based digital insurance platform, Click2Sure, is underwritten by Gaurdrisk and allows retailers, service providers, distributors, and brokers to provide a variety of over 20 custom-developed insurance products at the point of sale. Guardrisk is a sponsor of both Nobuntu and Click2Sure.
Digital transformation of the insurance business
The traditional insurance business began its digital transformation plan in 2020 when it invested in JaSure for a 51% stake. JaSure, founded in 2017 by Abigail Schilperoort, Bradley Smith, Jaclyn Prior, Jason Puidoussi, and Richard Heslop, offers digital on-demand insurance solutions to its consumers.
The takeover, according to the insurer, is a key growth enabler that will result in digital services for customers across the Santam Group, notably in its commercial and personal (C&P) insurance division.
— By Bataung Qhotsokoane