African Bank to partner Sanlam on insurance
African Bank says it will partner with insurance company, Sanlam in a pilot project, offering a full suite of long-term insurance and investment products to customers across 13 branches
African Bank intends to launch on April 4, with an equity base of R10 billion and a cash position of some R24 billion. Under the logo, ‘We are You’, it plans to become a fully-fledged retail bank, said CEO, Brian Riley, launching a transactional banking platform in the second quarter of 2017 and bringing a stokvel product to market this year.
It has hired DDB, which developed the Steve campaign for FNB, to do its advertising and will roll out television adverts next month.
With the exception of credit life, which is embodied in the loan product, Sanlam will, through FAIS-accredited individuals, sell insurance and investment products to African Bank customers. The concept will be tested in 13 Gauteng-based branches in the coming months, before potentially being rolled out on a wider basis.
The tie-up has been driven Sanlam Personal Finance head, Hubert Brody and Riley, who know each other from their days as the respective heads of Imperial and WesBank.
African Bank’s transactional banking platform will be “comprehensive” and target existing loan customers, unbanked individuals and competitors’ clients, Riley said. The bank has 1.5 million loan customers who fall into monthly salary bands of between R3 000 and R40 000.
African Bank will launch a product for event-based stokvels this year, whereby it pools the funds in a safe environment and creates additional value for customers, Riley noted. Old Mutual estimates the size of the stokvel market in South Africa to be around R44 billion.
It will also offer a funeral insurance product, with various value added benefits. “We’re looking for 20% returns on this business, not 50% or 60% as some players in the market,” Riley said.
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