JOHANNESBURG – Hollard chief executive Saks Ntombela is on a mission to expand South Africa’s second-largest short-term insurer’s footprint across Africa and Southeast Asia.
In an interview with Business Report at Hollard’s picturesque headquarters in Parktown, Johannesburg, Ntombela states matter-of-factly that his focus is on building a viable insurance business across the two continents.
He says the recent acquisition, by Japanese insurer Tokio Marine Holdings, of a 22.5 percent stake in Hollard, will help them realise that goal.
“The transaction cost R5 billion which basically values the business over R22bn,” he says.
“The good thing for us is that we now have additional capital to expand outside of South Africa.”
The group already operates in 10 other countries including, among others, Mozambique, Botswana, Lesotho, Zambia, Ghana, Indonesia, China and Pakistan.
Ntombela, who joined Hollard six years ago and was appointed to his current position in October last year, says, says the insurer is also looking at setting up shop in Kenya and Nigeria because of the latter’s market size. Nigeria is Africa’s second largest economy after South Africa.
“But we are not in a hurry, we will wait and see until things settle down there, from a risk return point of view. We have looked at opportunities in Nigeria, but we are cautious.”
Ntombela, who holds an MBA from the University of Cape Town, says Hollard’s approach to growing internationally hinges on the group taking longer term views in making investments.
“We are fortunate because we are privately owned. But we still need to apply the same rigour and discipline as a listed company when you decide what country to go into, what market to invest in, what capital to put in.”
He says Hollard does not need to list on the JSE as shareholders are happy with the returns that they are getting.
“We are continuing to grow our business, we are a R25bn revenue business, we are in 11 countries. We now have an institutional investor who is going to make additional capital available for us to expand. We have no reason to list,” says Ntombela, who attended a two-month advanced management programme at Harvard Business School in 2008.
The married father of two, who has worked for Unilever, Old Mutual, Nedbank and Absa in different capacities, says he enjoyed the Harvard course.
“It was a great opportunity in the middle of your career to get out of work and go spend some time develop yourself and studying,” he says, taking off his spectacles.
“I really enjoyed that. The calibre of teachers and the resources they had was just great.”
Looking ahead, Ntombela says the next five to seven years are going to be tough for the insurance industry.
He says the period will be characterised by low economic growth, high unemployment rate, political uncertainty and tighter regulations in Africa and Southeast Asia.
The contentious issue of climate change, he says, could also take a knock on business as insurers are experiencing more severe and frequent weather patterns which are costly for business.
“We also think the rate of change and disruption in insurance and financial services will continue to grow rapidly because of developments in technology and analytics data, fintech,” he says.
“This is our environment for the next five to seven years. As a response then, Hollard have chosen to focus on the things that we believe we are good at.”
Ntombela says during this projected period Hollard will focus on its ability to deliver mass market financial solutions, pertaining to funeral covers, life insurance, savings and investments.
He says the insurer, which acquired Regent Insurance Group for R1.8 billion, has 2.5 million policyholders in the mass market across the group.
Hollard will also focus on its partnerships, says Ntombela, adding: “Hollard was built in partnerships, we have over 100 partnerships across the group, in different parts of the value chain, in different sizes.”
“The ability to partner is going to become even more important going forward because the world is becoming more complex.”
That Hollard is the second largest short term insurer in the country after Santam is a non issue. “They are ahead of us but we will get there. We don’t want to be the biggest but we want to be profitable and continue growing and making returns,” he says.
Besides running Hollard, Ntombela says family is most important to him and that together with his wife, Andrea, they try to bring up their daughters to be good people who are respectful, ambitious and caring for the less fortunate.
He also enjoys writing, reading, technology and travelling, saying: “I’ve lost count of the countries I’ve been to. The only continent I have not yet been to is Australasia.”
Ntombela says he also likes doing half marathons with his wife. “We start off together and she leaves me in the way and I meet her in the finish line,” he chuckles.