South African short-term insurer Santam has entered into a purchase agreement with Sanlam Life Insurance to acquire a 60% stake in NMS Insurance Services (NMSIS), the insurance arm of MultiChoice Group (MCG).

Santam will buy the majority of A1 ordinary shares tied to general insurance products with an initial cash consideration of 925 million rand ($51.2 million).

NMSIS, a microinsurer registered in South Africa, is authorized to offer both general and life insurance.

Under the DStv brand, the company has been offering insurance, including equipment and installation protection and various waiver products, for two decades.

The acquisition is expected to be in line with Santam’s strategy to expand its market reach, particularly through cross-selling to MultiChoice’s sizeable South African subscriber base, estimated at eight million customers.

In June this year, Sanlam acquired a 60 percent stake in NMSIS, comprising two classes of shares.

The common shares are life insurance distributions, while the A1 common shares, now largely owned by Santam, are tied to general insurance distributions.

Gloria Tapon Njamo, CEO of Santam Partner Solutions, said: “With a base of around eight million subscribers in South Africa, MultiChoice offers Santam a robust and scalable channel for the distribution of tailored general insurance products.

“At Santam, we will leverage our experience in equipment insurance to increase the penetration of related general insurance products across the MultiChoice subscriber base.

“MultiChoice’s integrated payments platform has the potential to form a solid foundation for offering affordable value-added insurance products to advance our passion for sustainably promoting financial inclusion through the frictionless bundling of payments for services.”

Santam will use its current cash reserves to finance the acquisition amount.

“Santam Acquires Stake in MultiChoice’s Insurance Division” was originally created and published by Life Insurance International, a brand owned by GlobalData.

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