Santam is likely taker, writes
Alan Peat
THE LONG and rambling saga of the takeover of major marine underwriters Associated Marine may be reaching a conclusion.
It started early last year when Guardian National was taken over by Santam. It was then further complicated later in the year when Mutual & Federal (M&F) took over CGU.
Superficially, that looks like two straightforward business mergers - but it had a hidden factor that saw the Competitions Board grumbling into life.
Both the acquired companies (Guardian National and CGU) were shareholders in Associated Marine. And their takeovers saw the bulk of the R467-million a year marine underwriting market in SA now controlled by three majors - M&F, Santam and Associated Marine.
In terms of their total marine portfolios - including aviation insurance in the case of M&F and Santam - the three gobbled up R231-m (almost half) of the total .
According to the 1999 data from Quest Insurance Information Services released to FTW, Santam is the biggie with R92-m; M&F holding R74-m; and AM with R65-m. But, exclude aviation, and all three have roughly equal shares of the marine insurance related to hulls and cargoes - including the landside leg. That's in relation to the total gross written premium by SA-registered insurers.
The relationship between the three, however, prompted the Competitions Board to veto the situation. Too oligopolistic, it said, and demanded that one of the two Associated shareholders sell their shares to the other.
This, it can be fairly assumed, was probably easier in theory than in practice - with one of the two owners having to sell a shareholding which effectively gave the purchaser control of near enough a third of the marine underwriting business in SA.
But inside information would seem to indicate that M&F has been the one to have bitten the bullet, and pulled out - and that Santam will soon be announcing its takeover of Associated Marine.
Again, it is believed from information leaked to FTW, the end result of this merger will be that the marine side of Santam will be absorbed into the current Associated structure - and a new giant in marine insurance will be born.
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