Hello, and a very warm and bright welcome to this edition of The Comet, bringing you news, views, advice and insights from the world of BrightRock and beyond.
And it’s a world that is swiftly growing and changing, as we shine the spotlight on a landmark deal between five-year-old BrightRock and 99-year-old Sanlam.
Read all about it in our interview with BrightRock CEO Schalk Malan, who tells Alec Hogg: “You’ve got to want to change the world. You need to have a very specific objective that you want to achieve.”
So here’s to you and your big dreams too. Remember, it all begins with a single bright idea…and a lot of hard work to make it happen.
We hope you enjoy this edition, and please feel free to join us on our social media channels, Twitter at @BrightRockZA, Facebook on www.facebook.com/BrightRockZA, and at our bright and breezy online portal, http://changeexchange.brightrock.co.za.
What does it take to turn a bright idea into a startup that disrupts an industry, and gives people the power to change the way they look at life? Following the announcement of a major shareholding deal between Sanlam and BrightRock, BizNews publisher Alec Hogg sat down with BrightRock co-founder and Executive Director Schalk Malan to get the inside story.
Alec: I’ve been watching the progress of BrightRock over the last five years, and it’s been quite extraordinary to see a company coming from nowhere. More than half-a-million lives that have been covered. The growth rate last year was 72%, and then Sanlam announced that it has bought 53% of the company for just over R700m. You have created nearly R1.5bn worth of value in just five years. Is that beyond your wildest dreams?
Schalk: I’m very excited, but if you look at our product innovation, delivering clients 30% to 40% savings from their premiums, the result was a consequence of innovation on all fronts. We’re obviously, very pleased with this investment from Sanlam and it’s testament to their belief or view of BrightRock and what we have achieved.
We wanted to change the industry and change it for the better. We had a clear understanding of the market and we had a clear belief that through product innovation, driving our clients and assisting clients to buy what they need, through life insurance, and to save them 30% to 40% in the premiums.
That understanding and belief made us excited to come and change an industry and we’re really achieving that.
Alec: Have you aged more than five years in the last five years?
Schalk: When you start a business there’s got to be a little bit of that ambition that defies gravity or belief, and that does take its toll, so yes, we’ve probably aged a few more years.
It’s been an exhilarating period and we’ve learnt so much. If you think about starting off with four people around the dining room table and today, sitting with more than 350 employees.
That is a phenomenal achievement and that makes us proud as well, to have been able to make that type of impact on people’s lives and, also our clients.
Alec: It was you, Sean Hanlon, Suzanne Stevens, and Leopold Malan who started BrightRock. Did you each have a sweet spot? Was it almost as though you looked at each other’s skills and what you were able to bring to the party and said ‘we’re the perfect Four Musketeers?’
Schalk: Our skill-set is absolutely complimentary. We’ve got the various disciplines covered in the market, in the distribution, the product design, and the processing but more so that chemistry that we’ve developed over time – that diverse thinking. I think it’s really been one of the major contributors to this success story.
We debate every single thing, we’ve got a very much a process of reaching consensus and agreements, and that’s really delivered great results. From the consumers to be able to implement workable systems and processes.
Alec: Sanlam is taking 53%, so it will have control of the company in the future. Are you expecting that you might be put together with something else, within Sanlam?
Schalk: No, absolutely not, Alec. I think one of the key things that Sanlam has also stressed with us is this power that sits in BrightRock, this entrepreneurial innovation was very appealing in their space. The business will run separate from the Sanlam business.
We will be moving in a life license inside the BrightRock Holdings Group, being branded BrightRock Life. BrightRock will be running as an independent business.
Obviously, Sanlam will be represented at the board level but they’re very clear in running the business, day-to-day, as an independent business and supporting where they can.
Alec: But you have been a disruptor. Is it likely that there might be some threat to the Sanlam business, given the way that you are disrupting?
Schalk: A lot of discussions were had around that and where I think we’ve reached commonality in our thinking and in our strategy, is that this investment will be aimed to increase market share.
That’s been a key objective of both parties, so we see that this transaction will enable BrightRock to continue on its innovation path, being able to deliver product and continue on its current product development, to be able to grow market share for us, as well as for our shareholders Sanlam.
Alec: Up to this point you’ve only used independent brokers. Are you going to continue along that line or do you now get dragged into the Sanlam distribution network?
Schalk: There has been discussions that the BrightRock product will be available to the Sanlam agency ports. It will be under the BrightRock brand, as we’ve come to know and it will also be administered and serviced through BrightRock. So, in terms of that the whole experience will be exactly the same.
At BrightRock we’re a strong believer in the independence of advice, but if you look at most of the financial services they also have agency distribution.
We believe that’s all exciting, it’s aimed and developed to grow the market share and to take our product message out to a much greater audience. That’s really what we’re excited about because we truly believe that this BrightRock product, in the hands of our customers and consumers, is a very powerful and innovative product to deliver what they actually expect, and that is to take care of their families and loved ones when life changes.
Alec: R700m is a lot of money – is that going into the business or are you guys going to be banking a bit?
Schalk: No, we’re very much committed to the business. The funds will be applied into the business and there’s a lot of excitement to see the results of that and to accelerate some of the business plans, and to really take those to see how we can grow market share. So, no – there’s no result of any sell-outs. It’s there to grow the business.
Alec: What would you suggest to younger people, who want to become entrepreneurs? What is it going to take to achieve this level of success that you’ve managed?
Schalk: I believe first and foremost, in terms of your team and the people around you – like I said earlier, diverse thinking, getting a group of people that’s like-minded in philosophies. That for me is critical. Then you’ve got to have a dream.
You’ve got to want to change the world in your thinking. You need to have a specific objective that you want to achieve and that’s very important. The other thing is you’ve got to prepare yourself for hard work and hard work with partners that are willing to go the distance.
Those are some of the key things that really stand out for me, if I reflect on this journey to date.
*This is an edited version of an interview that appeared on BizNews.com.
Only five years after its founding, the company that brought Love Change to life embarks on a bold new era, with the announcement of a major deal with Sanlam
Some companies started in a garage: Apple, Google, Amazon. Some started in a bedroom: Facebook. Some started in a basement: Virgin Records.
But when Sean Hanlon, Suzanne Stevens, Schalk Malan and Leopold Malan got together to start their fledgling life insurance company in 2011, it was around a dining-room table in suburban Johannesburg.
Between hearty snacks and copious cups of coffee, they set out to build a business on the basis of a bright idea: a life insurance product that changes as your life changes, to match your needs as a dynamic, ever-evolving individual.
Today, just over five years later, that idea has grown into BrightRock, an industry disruptor that has created almost R1.5-billion in value, with R148-billion worth of life cover in force.
And now comes a bold new chapter in the story of BrightRock, with the announcement that the listed financial services group, Sanlam, will acquire a 53% stake in the company, subject to regulatory approval.
Under the agreement, Sanlam and BrightRock will continue to function as independent businesses, retaining their own brands, life insurance licences and management teams.
“BrightRock is proud to welcome Sanlam as our new majority shareholder,” says BrightRock CEO Schalk Malan. “In Sanlam, we have found a true growth partner with exceptional credentials that is supportive of our aspirations to create a highly differentiated and autonomous financial services business of scale. We’re also pleased that the Lombard Insurance Group, our founding investors that backed BrightRock from inception, will remain shareholders in our business going forward.”
Sanlam Personal Finance (SPF) Deputy CEO Hennie de Villiers, says the acquisition of BrightRock is in line with Sanlam’s strategy to seek profitable and sustainable growth opportunities, and is testimony to Sanlam’s commitment to invest in South Africa.
“We believe BrightRock has established a strong and credible presence in the South African market and presents a valuable proposition to people’s insurance needs”, says De Villiers.
“In particular, the company’s innovative needs-matched life insurance offering supports Sanlam’s client-focused philosophy and our strong belief in the value of financial advice by qualified and accredited intermediaries. We believe that the BrightRock offering, together with our Matrix offering to which we introduced significant innovations early in 2016, puts us in an excellent position to meet client needs and further grow our market share.”
While BrightRock products are currently sold solely through independent brokers, the product range will in future also be available through Sanlam Financial Advisers. Sanlam Broker Distribution will also take the product to market alongside its Matrix offering.
Sanlam and BrightRock will inform the market and interested parties of progress regarding the transaction. For now, please read Alec Hogg’s interview with Schalk Malan in this edition of The Comet, for more on what this landmark deal means for BrightRock and you.
Business Day TV’s Alishia Seckam interviewed BrightRock’s Schalk Malan and Sanlam’s Hennie te Villiers about Sanlam’s intention to acquire a majority stake in BrightRock:
This interview was originally broadcast on Seckam’s Taking Stock-programme on 26 January 2017.
On Wednesday, 25 January, BrightRock and Sanlam announced that Sanlam is set to acquire a 53% stake in needs-matched life insurance provider, BrightRock, subject to regulatory approval.
Don’t miss portfolio manager Gary van Onselin’s take on this entrepreneurial miletone on CNBC:
You can also read the full announcement by BrightRock and Sanlam here.
Sanlam het ’n meerderheidsbelang van 53% in die lewensversekeringsmaatskappy BrightRock gekoop vir ’n bedrag van tot R707 miljoen.
Die finansiëledienstegroep het Woensdagmiddag op die JSE se Sens-nuusdiens aangekondig die transaksie is nog aan regulatoriese goedkeuring onderhewig.
Hennie de Villiers, adjunkhoof van Sanlam Persoonlike Finansies, sê noulettendheidsprosesse is reeds afgehandel. Die transaksiebedrag sal afhang van presies wanneer dit finaal goedgekeur kan word, maar dit sal nie meer as R707 miljoen wees nie, mits die transaksie in die eerste helfte van die jaar beklink word.
Sanlam sal dit uit sy beskikbare kapitaalbronne finansier.
Volgens De Villiers is die verkryging deel van Sanlam se strategie om winsgewende en volhoubare groeigeleenthede te soek, en dit beklemtoon ook die groep se verbintenis om steeds in Suid-Afrika te belê.
Sanlam het die afgelope jaar of wat groot transaksies buite die land gedoen, soos die koop van die belang in Saham Finances wat in die res van Afrika sake doen, asook sy beleggings in die Indiese finansiëledienstebedryf. Sanlam het in Desember sy belang in Saham Finances van 30% tot 46,6% opgestoot.
Volgens De Villiers het BrightRock ’n sterk teenwoordigheid in die plaaslike mark opgebou. Die onderneming sal voortgaan as ’n onafhanklike onderneming met sy eie bestuurspan, handelsnaam en lewensversekeringslisensie.
Schalk Malan, hoof van BrightRock, sê sy onderneming het sterk gegroei sedert dit in 2011 begin is, en dit bied nou dekking van R148 miljard en kry jaarlikse premie-inkomste van meer as R611 miljoen. Die Lombard Insurance Group wat die aanvangsbeleggers in BrightRock was, bly aan as aandeelhouers, maar Malan is nie in ‘n posisie om te sê wat Lombard se belang in die onderneming voor en na die transaksie is en sal wees nie.
BrightRock se produkte is tot dusver slegs deur onafhanklike makelaars verkoop, maar sal voortaan ook via Sanlam se finansiële adviseurs en makelaars beskikbaar wees.
Sanlam se aandeelprys was Woensdagaand 0,43% hoër op R66,03. - Francois Williams
Hierdie berig is oorspronklik op Netwerk24 en in Die Burger gepubliseer. Lees die oorspronklike berig hier.
Sanlam has clinched the first major deal on home soil in a while, agreeing to acquire a majority stake in smaller insurer BrightRock for up to R707m.
Sanlam’s life insurance subsidiary will purchase 53% of the needs-matched insurer, valuing BrightRock at about R1.3bn. BrightRock offers products structured to adapt as each client’s needs change throughout life.
Hennie de Villiers, deputy CEO of Sanlam Personal Finance — the insurer’s South African retail cluster — said the deal was testimony to Sanlam’s commitment to invest in SA.
“Sanlam’s acquisition of a majority share in the company is in line with our strategy to seek profitable and sustainable growth opportunities,” he said.
The deal is still subject to regulatory approvals.
Sanlam concluded its last domestic deal of this size in December 2015, when it bought a 28.7% interest in healthcare administrator Afrocentric Healthcare Assets for R703m.
The purchase price for just more than half of BrightRock, which brings in R611m in annual premium income, has not raised eyebrows. “As the maximum purchase price of R707m only represents 0.5% of Sanlam’s market capitalisation, it won’t initially impact Sanlam’s results very meaningfully,” said Adrian Cloete, an analyst at PSG Wealth. “The transaction is also a profitable and sustainable growth opportunity that should give a much superior return than the investment return that the R707m is currently earning.”
This news report was published on Thursday, 26 January 2017. Read the original news report here.
We are proud and delighted to share breaking news that’s set to position us for exponential future growth.
Today (25 January 2017), BrightRock and Sanlam have announced that Sanlam, subject to regulatory approval, will acquire a 53% stake in BrightRock for R707 million.
This is a milestone in BrightRock’s entrepreneurial journey and an important step towards realising our vision of building a fully-fledged, competitive life business.
After five years in business, this announcement cements – and reinforces – BrightRock’s reputation as one of the fastest-growing life insurance players in our sector. Importantly, Sanlam and BrightRock will continue to function as separate businesses, each of them retaining their own brand, life insurance licence and management team.
Read the full press release here.