SWAZILAND – MMI Holdings, the South African based financial services group has sold majority stake of 67% in its Swaziland insurance business to Vunani Limited for US$3.94 million (R55m).

The transaction involves MMI’s Eswatini insurance business, Metropolitan Life Swaziland (“MetLife Swaziland”) and its wholly owned subsidiary Momentum Insurance Swaziland Limited (“MIS”).

Under the terms of the agreement, Vunani, together with the current management of MetLife Swaziland will hold 67% of the company, while the other 33% will remain in the hands of Eswatini Bank, which bought the stake in 2010.

According to reports, MetLife Swaziland management had approached Vunani to help it raise capital for buying out MMI, but the latter instead saw an opportunity to invest.

When the deal, which is subject to regulatory approvals complete, Vunani plans to rebrand the Swaziland operations, which include long-term insurance, as well as short-term insurance and health benefits offered through Momentum.

“This transaction sees Vunani, a financial services group, expand into life, short-term and health insurance in partnership with the highly experienced local management team,” Vunani said in a statement.

MMI insurance services complements Vunani’s diversified financial services portfolio spanning asset management, asset administration, investment banking, and stock broking.

Speaking on the investment, Vunani CEO Ethan Dube said MetLife was an “ideal springboard” for Vunani to diversify its financial services portfolio given that the insurer played in the entire insurance value chain, from motor to life insurance and retirement products.

Metropolitan Life and Momentum opened offices in Swaziland in 2008 before the two merged in that country in 2010, but until now, MetLife owned 100% of Momentum Insurance Swaziland.

In September 2018, MMI said it was exiting its operations in seven African countries including Mauritius, Mozambique, Tanzania, Zambia and Swaziland.

The company struggled with volatile earnings, internal control and leadership problems in these markets.

According to its latest annual report, MMI reported that Swaziland contributed just 3% of new life insurance sales from the Southern Africa operations in the 2018 financial year.

Compared to Namibia, Botswana or Lesotho, which contributed 46%, 31% and 201%, respectively, Swazi operation is just a small proportion that could be a sign of unsatisfactory results.