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Santam’s bid to acquire MTN’s insurance unit referred to Tribunal

Admire Moyo
By Admire Moyo, ITWeb's news editor.
Johannesburg, 02 Mar 2023

The Competition Commission (CompCom) has recommended the Competition Tribunal approves insurer Santam's proposed acquisition of the device insurance policies marketed and distributed by mobile operator MTN SA.

According to the competition watchdog, the insurance policies are currently underwritten by Guardrisk through a cell structure, together with certain assets and liabilities pertaining to such policies.

In 2021, Sanlam and MTN Group announced they are joining forces in an exclusive strategic alliance to distribute Sanlam Group insurance and investment products across Africa, further developing MTN’s mobile financial services business.

At the time, the firms said the alliance will build a digital insurance and investment business, which will be an integral part of MTN’s fintech offering.

They added the deal 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.

In a statement, the CompCom says Santam is a short-term (non-life) insurer licensed to provide policy benefits under short-term or non-life policies for all classes of business (corporate, commercial, niche and specialist markets, as well as personal lines).

It adds that Santam specialises in the provision of short-term insurance products for a diversified market in South Africa.

The target firm, MTN Portfolio, does not control any firm, it notes, adding the MTN portfolio is covered by Guardrisk.

Guardrisk is, in turn, a wholly-owned subsidiary of Momentum Metropolitan Holdings, which is not controlled, either directly or indirectly, by any one firm.

“The MTN portfolio offers the following personal device insurance products: i) all risk cover which is comprehensive cover for loss, theft and any damage (liquid, physical and screen damage); ii) cover for the theft and loss only; iii) liquid or accidental damage only; and iv) cover for the repair and not a replacement of the insured device.,” says the commission.

“The commission found the proposed transaction is unlikely to result in a substantial prevention or lessening of competition in any relevant markets. The commission further found  the proposed transaction does not raise substantial public interest concerns,” it concludes.