Life Insurance

UPDATE 1-South Africa’s Investec to expand into life insurance | Reuters

(Recasts with expansion into life insurance)

JOHANNESBURG May 18 South Africa-focused bank
Investec said on Thursday it would expand into offering
life insurance to its private clients, as it reported a rise in
full-year earnings.

Investec, which focuses mainly on private banking and asset
management, said it would offer life insurance from the third
quarter of this year to fill what it sees as a gap in its
product range.

“I think it is a hole in our offering and it is something we
think we can be pretty successful at,” CEO Stephen Koseff said
during the company’s results presentation. “We have had a life
insurance licence for decades but we never used it and we feel
it’s a very appropriate product to offer to our client base.”

The expansion is part of the shift by banks, such as
Firstrand, to offer insurance and other products that
can be added without big capital outlays, amid greater
competition in banking from the likes of Discovery and
Capitec, said Old Mutual banks analyst Neelash Hansjee.

“Insurance products offer better returns and Investec has
access to clients and distribution for the products. It also
serves to improve the fee income or annuity type revenue for the
business,” said Hansjee.

Investec’s shares were up about 2.5 percent at
106.00 rand by 1000 GMT after it reported a 17 percent rise in
annual profit, buoyed by its asset management and specialist
banking businesses.

Adjusted earnings per share (EPS) for the year to the end of
March rose to 48.3 pence from 41.3 pence a year earlier.

“The Asset Management and Wealth and Investment businesses
have benefited from higher funds under management supported by
rising market levels,” the company said in a statement.

It raised its full-year dividend to 23 pence per share from
21 pence a year earlier.
(Reporting by Tanisha Heiberg and TJ Strydom; Editing by James
Macharia and Mark Potter)

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