Assupol CEO Rudi Schmidt. Picture: FINANCIAL MAIL
Assupol CEO Rudi Schmidt. Picture: FINANCIAL MAIL

ASSUPOL, an insurer that caters for low-to middle-income customers, said on Friday it was expecting its shares to be traded over the counter in the next three months.

This followed last week’s announcement that Investec Private Equity, a division of the specialist bank and asset manager, had acquired 30% of the group in a deal valued at more than R300m.

The deal completes the restructuring of Assupol’s shareholding, which came after a demutualisation process that started in 2010. The proceeds from the deal will go towards paying out about 240,000 policyholders who want to cash out and not take up a stake in Assupol following this process.

The group, which offers funeral cover, life cover, savings products and retirement annuities, has set aside an amount of less than R900m to pay out these policyholders.

Assupol would now have about 10,000 policyholders, holding about 6.5% of the company, the company’s CEO Rudi Schmidt said on Friday.

"We wanted to have a strategic investor in the company who … has an understanding of the life business," he said.

"We were looking for long-term strategic partners and there has been no shortage of people."

Assupol’s major shareholders are now Investec Private Equity, the International Finance Corporation — which has a 17% stake — and empowerment partner the Women’s Development Businesses Investment Holdings, which holds 10%.

Other shares are held by staff and management of the company.

Investec Private Equity paid cash for the Assupol shares.

Mr Schmidt said there were no indications yet that Investec Private Equity would up its stake in the company. But he said Women’s Development Businesses Investment Holdings had previously indicated plans to bulk up in the future.

Investec Private Equity said on Friday that it had a "buy, build, grow" approach towards its private equity deals. It said Assupol was a profitable business which had the ability to grow.

"There is no predetermined exit plan and we generally stay invested for as long we believe that we can grow the company and add value," the company said.

"Assupol has an excellent track record and Investec Private Equity believes that it can add significant value to the company and facilitate its growth ambitions."

Assupol’s premium income has had 11.8% compound growth between 2007 and the end of last year. Its premium income was R1.2bn last year. Its embedded value, which was an estimate of future profit from current policies plus adjusted net asset value, had a 35.3% cumulative growth between 2007 and last year. Total group assets grew 7.8% to R2.9bn over this period.