LIBERTY plans to start offering asset management services in Nigeria, the company said in its recently released annual report. It is an initiative that should broaden its offering in the country beyond health insurance.
The plan was to establish a presence in West Africa and be in a position to offer insurance and investment solutions.
Liberty operates in 16 African countries. Its vision for the year 2020 is to be among the top 10 insurers in Nigeria and top three in Kenya.
At the moment Liberty has only health and asset management capability in Ghana and a health offering in Nigeria. In Nigeria, Liberty has been offering health insurance since 2009 through Total Health Trust. Last year Liberty’s asset manager Stanlib set up operations in Ghana through the acquisition of Stanbic Investment Management Services division.
In the year ended December, Liberty Africa Insurance generated R59m in Black Empowerment (BEE) normalised operating earnings out of a total of R2.6bn. In the asset management business Liberty reflected R59m in earnings from the rest of Africa.
BEE-normalised headline earnings, which exclude certain one-time items and take into account the effect of its black shareholder scheme, is Liberty’s main performance measure.
Liberty also noted that its BEE scheme, which was done in 2004, had matured, transferring R2.3bn of value for its beneficiaries. In 2004 Liberty sold a 9% stake to a BEE consortium consisting of black managers, empowerment groups Shanduka and Safika and the Liberty Community Trust.
About R900m of value was created for 1,227 black employees, R900m of value for Safika and Shanduka, and R500m for the community trust.
Liberty said when the deal matured its black partners owned 7.5% of the group. Subsequent to the maturity of the deal at the end of December last year Liberty employees sold about 1.8-million shares.
The Liberty shares have traded at levels between R122 and R169 from January to date.
The Standard Bank Group, which holds 53% of Liberty, is expected to soon issue further details about the BEE status in the group.
However, last year when Liberty chairman and Safika director Saci Macozoma stepped down from the insurer, it was stressed that Safika would remain invested as a substantiated shareholder in both Standard Bank and Liberty.
Another insurer that has a BEE deal maturing is Old Mutual. The company said in its annual report that it was in discussions with its BEE partners on how to collaborate beyond the maturity of the deal.
The Sanlam BEE deal matured in December 2013 and its empowerment partners Ubuntu-Botho are still heavily invested and have not sold their shares. MMI’s BEE partner Kagiso Tiso Holdings is set to stay invested until 2017.
Discovery’s BEE deal with WDB Investment Holding was refinanced in 2013 and will now also mature in 2017.
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