African behemoth in telecommunications, MTN, and compatriot financial services giant Sanlam are joining forces to offer insurance products to the telecommunications operator’s hefty subscriber base on the continent, where relatively few have a insurance cover.
The Sanlam-MTN Alliance will build a digital insurance and investment business, which will be an integral part of MTN’s fintech offering, said a press release.
MTN, Africa's largest mobile operator with 277 million voice subscribers, will leverage Sanlam's license, geographical reach, and expertise, while the insurer will be able to expand further outside its home market, South Africa, by selling its products to MTN's vast customer base, they said in a joint statement. The companies will sell insurance, investment, and savings offerings.
"The Alliance will provide people across the continent with easier access to these services, particularly those sectors of the population that have typically been unable to access traditional distribution channels for such products," said the release. Sanlam is the largest non-banking financial services group in Africa, with a presence in 33 countries across the continent.
The Alliance will also enable MTN to accelerate and scale its InsurTech offering through its brand and reach and by leveraging Sanlam’s licensing and geographical footprint, as well as its broad product capabilities and expertise. MTN InsurTech businesses currently have approximately 6 million active policyholders, with a target of over 30 million policyholders by 2025 with this new Alliance.
Sanlam Group CEO Paul Hanratty said: “We are excited by MTN’s development of modern mobile financial services for the benefit and empowerment of the African consumer. It gives us great pride to be able to partner with MTN to build the best possible range of solutions in the insurance and investment arena for consumers. We anticipate strong long-term growth in mobile financial services and insurance and investments are no exception to this.”
In the initial period, the Alliance will be chaired by Ralph Mupita, with Paul Hanratty as Deputy Chair. While approximately 46% of Africa’s population has access to and uses cell phone services, insurance penetration remains low at less than 5% in most markets except South Africa.