JSE-listed Capitec Bank plans to expand its insurance business on the back of double-digit growth of this new segment for the group, taking on established players in the market like Old Mutual, Momentum, and Sanlam.
Fourie told Moneyweb that Capitec sees an opportunity in the insurance market segment of R250 000 to R3 million. “This is the area we intend to focus on.” “However, integrating insurance into banking or vice versa has proven to be more challenging than these companies have envisaged,” Metherell noted.In October 2023, Capitec gave notice to Sanlam of the termination of the Funeral Product Co-Operation Arrangement at the end of the initial seven-year term. From 1 November 2024, Sanlam will cease to provide reinsurance and administration services for the funeral policies forming part of the arrangement.
“Initially in the banking space, and now in insurance, which has resulted in market share gains as some incumbent players have perhaps been caught by surprise by Capitec’s entrance into the market,” he said. Credit granting criteria ADVERTISEMENT CONTINUE READING BELOW Fourie said Capitec, which originally entered the market providing unsecured credit to a risky segment of the population, will be cautious with its credit granting criteria for the foreseeable future amid a tough economic environment in South Africa and increased geopolitical risk.Business banking added R478 million in profit after tax in the year under review. Capitec acquired Mercantile Bank in 2019.
The market reacted positively to Capitec’s results, with the share price closing at R2 173.78 – 7.79% higher than the previous day.