FirstRand sells off Outsurance

2010-12-15 12:15

Johannesburg - FirstRand [JSE:FSR] said on Wednesday that it has agreed to sell its 45% stake in short-term insurer Outsurance to RMB Holdings [JSE:RMH] for R3.75bn.

FirstRand chief operating officer Johan Burger said the transaction presented the perfect opportunity to unlock value for FirstRand shareholders.

"Outsurance was a joint creation between FirstRand and management in 1998 and is a good example of FirstRand's long-term strategy to create shareholder value through the start up of completely new businesses," said Burger.

"Given the structure of our shareholding, we had limited liquidity options so therefore this deal provides us with the perfect opportunity to realise the significant value that has been created over the past 12 years," he said.

"Outsurance is a fantastic business but is a non-strategic asset, in that it does not sell directly to FirstRand's banking clients.

"Following the disposal of our stake, we will still have a number of integrated insurance operations within the group and we continue to see the sale of insurance products to our banking customers as a significant area of growth."

  • Mo - 2010-12-15 13:00

    Outsurance are a bunch of crooks. Many years ago they had a guy in charge of claims and he used to reject most claims. There was even a story on NOSEWEEK about this crook. When you claim they cancel your policy and say you are claiming fraudulantly. Never do businesss with these crooks. I ahve had first hand experience when I sent in a claim.

  • matrix - 2010-12-15 15:36

    I must agree with MO on this one...all these insurance companies are looting billions every month through debit order system.They will find any excuse to reject claims...sadly first rand pushed sales up by forcing its bond/mortgage holders to undertake outsurance's products without disclosing that they hold an ernomous interest.They are all crooks..

  • Selma - 2010-12-15 15:48

    I have had excellent service from Outsurance.

  • Brokered - 2010-12-15 17:14

    OF COURSE THEY GIVE YOU GREAT SERVICE (until you put in a claim). Better go with a broker -- they dare not reject a claim from a brokered client because the broker can take 1000s of clients away if broker gets upset with claim payment record. YOU TAKE OUT INSURANCE FOR THE CLAIMS NOT FOR SERVICE.

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