Sanlam Life, a subsidiary of South Africa’s largest insurer Sanlam, has acquired a 60% stake in Multichoice subsidiary NMS Insurance Services for R1.6 billion. Multichoice will receive a further R1.5 billion on condition that NMS meets future policy sales targets.
Sanlam will use the acquisition to advance its technology strategy to expand access to its financial services across Africa, riding on Multichoice’s 22 million subscribers on the continent.
NMS Insurance Services underwrites insurance policies under MultiChoice’s DStv brand, focusing on device, installation, funeral, subscription waiver and debt waiver insurance products. The company had 3.3 million active policies by 31 March 2024, a 19% increase from the previous year.
Although NMS Insurance Services also recorded R296 million in profit per Multichoice’s latest annual results, the business has also been plagued by negative publicity, with several recipients of policies having made accusations of fraud against the company.
“MultiChoice’s extensive subscriber base offers Sanlam a unique platform and attractive opportunity for cross-selling and cost-effective marketing to an actively engaged subscriber base [on the continent],” the company told shareholders.
Multichoice, which will maintain a 40% stake, aims to leverage Sanlam’s insurance expertise to gain access to “unparalleled insurance expertise, comprehensive financial services resources and access to Sanlam’s financial services operations across Africa.”