MTN Intends To Partner With Sanlam To Bring Digital Insurance And Investment Services To Africans
MTN intends to partner with Sanlam to bring digital insurance and investment services to Africans
MTN Group, Africa's largest telecommunications company, is teaming up with insurtech firm Sanlam to create a digital insurance and investment business for its users across the continent.
MTN's fintech offering in Africa will include distribution of Sanlam Group insurance and investment products as part of the exclusive strategic alliance (the Alliance).
“It will improve access to these services across the continent, particularly for segments of the population that have historically been unable to access them through traditional distribution channels,” MTN explained in a blog post.
The transaction, however, is conditional on both parties concluding definitive agreements and satisfying all applicable suspensive conditions.
Mr Ralph Mupita, MTN Group President and CEO, stated that the collaboration enables MTN to enhance its existing offering and provide customers with more value-added services.
Mr. Ralph Mupita, President and CEO of MTN Group, stated that "Sanlam is the ideal partner as Africa's leading insurance and investment business, with partnership at the core of its strategic and execution approach." MTN has built a significant fintech business with over 100 million wallets, approximately half of which use Mobile Money services on a monthly basis, presenting a significant opportunity to further financial inclusion through the provision of appropriate insurance and investment solutions.”
For the time being, the Alliance will be chaired by Ralph Mupita, CEO of MTN Group, with Mr Paul Hanratty, CEO of Sanlam Group, serving as Deputy Chair.
Scaling its InsurTech business
MTN InsurTech has approximately 6 million active policyholders at the moment. MTN's new alliance, on the other hand, aims to reach over 30 million policyholders by 2025.
Sanlam, one of its new partners, is one of Africa's largest non-bank financial services groups, with operations in 33 countries across the continent.
The Alliance can establish a digital insurance and investment capability across Africa by leveraging MTN's brand and reach and Sanlam's licensing across multiple countries.
MTN, on the other hand, will be able to expand and accelerate its InsurTech offering, as well as its broad product capabilities and expertise.
Sanlam will also take advantage of the opportunity to broaden consumer access to its products and expand its African operations by insuring MTN's customers across the continent.
According to Mr Paul Hanratty, CEO of Sanlam Group, the partnership will result in significant long-term growth in mobile financial services, insurance, and investments.
Africa's Insurance Penetration
In conclusion, Africa continues to have a low insurance penetration rate. In most markets except South Africa, penetration is estimated to be less than 5%, while approximately 46% of Africa's population has access to cell phone services.
This void represents a sizable market opportunity in the largely untapped insurtech industry. The Alliance may be able to anticipate and adapt to digital disruption in markets where Sanlam and MTN operate.
