CAPE TOWN – The board of Johannesburg-based short-term insurer, Lion of Africa Insurance Company, on Wednesday announced its decision to to voluntarily and systematically wind down operations with immediate effect.
In the past few years, Lion has experienced a lack of profitability and a tough operating climate in its chosen markets, which, combined with an onerous regulatory environment and increased solvency requirements contributed to this decision.
“The decision was not taken lightly and significant efforts were made to find alternative solutions. Notwithstanding our efforts, the company is being placed into ‘run-off’.
“Lion will continue to meet all obligations under existing policies but will not be issuing any new policies. While the decision to place Lion into run-off is regrettable, its value to Brimstone comprises less than 1 percent of Brimstone’s gross asset value,” said Brimstone chief executive Mustaq Brey.
“As one of South Africa’s leading empowerment investment holding companies, Brimstone is deeply rooted in the agenda of transformation and black economic empowerment.
“Although the decision to place Lion into run-off was based on sound business rationale, it was still a particularly difficult decision to make which was only considered once all other viable options had been explored and exhausted,” said Brimstone chairperson Fred Robertson.
“Brimstone will continue to provide support to Lion, its leadership team, and staff during this difficult time. All other stakeholders including the regulatory authorities, Lion’s clients and counterparties will be kept fully informed as the process unfolds,” said Robertson.
Content supplied by Brimstone Investment Corporation.
BUSINESS REPORT ONLINE