Alexander Forbes Group says it has reached agreement to sell the risk and retail life businesses of AF Life to Sanlam Life Insurance, a wholly owned subsidiary of Sanlam Limited, for R100 million.
The transaction is subject to various conditions precedent.
“Both AF Life and Sanlam are committed to a high quality of service to their clients and brokers and will ensure that the transition between the respective insurers is well managed and communicated,” it said in a statement on Monday (14 April).
The transaction also allows for the transfer of the majority of AF Life employees, which ensures communication channels and levels of service to clients remain largely unaffected, it said.
Alexander Forbes chief executive, Dawie de Villiers said: “The sale of AF Life is in line with our strategy to focus on our core advice-led business and be capital light. The agreement with Sanlam Life follows a rigorous, impartial and transparent process and we are pleased with the outcome.
“The transaction balances appropriate solutions for AF Life clients, ensuring both a seamless transition for AF Life employees to Sanlam Life Insurance Limited and benefits to our shareholders. Sanlam is equally committed to delivering on the financial well-being the clients and employees who are moving across in this transaction,” he said.
Alexander Forbes said in reporting its financial results for the year ended March 2021 that operating income (from continuing operations) was in line with the prior year at R3.153 billion, while cash generated from continuing operations remains strong at R977 million (2020: R936 million).
The group reported a 29% increase in assets under administration (AuA), while assets under management (AuM) surpassed the R400 billion mark.
Headline earnings per share from continuing operations was up 4% year on year to 33.4 cents per share.
The group declared a final dividend of 9 cents per share (2020: 12 cents per share), taking the annual dividend to 22 cents per share.