Black-owned insurer heads for JSE listing
FIRST Central Insurance (FCI), SA's only black-owned short-term insurance company, is gearing up for an October listing via its holding company, First Central Holdings (FCH), at a market capitalisation of R75-million.
The newcomer to the R13-billion-a-year short-term insurance market says it is listing purely to establish its presence since it believes that it is sufficiently capitalised at this stage.
Financial director Jonathan Vogelzang says the authorised 200-million shares could be used when it requires additional capital. FCH has 83-million shares privately placed, and previously disadvantaged communities hold 42.5%.
Chairman Ismail Ayob says FCI wanted a few more months to ensure it maintained the performance seen since its start-up three months ago.
FCI has written business worth more than R52-million in annualised premium income to date, and expects this figure to grow to R125-million in its first year of trading. The company is confident that it will bloom into a R600-million business over the next five years.
It feels listing will give it the clout it needs to take on the market as a "serious" player.
More than 70% of the company is black-owned - 42.5% by previously disadvantaged investors, 10% by employees and Ayob with 21%. In contrast to some empowerment initiatives, black ownership has not been subsidised.
Institutional muscle is provided by Nedcor Investment Bank, with a 17.4% stake, and one of Germany's largest insurance companies, Munich Re, with its 9.1% stake.
While the company is black-owned, its target market is not exclusively black. Group MD David Manuel says FCI will focus on the untapped black market, but he emphasises it will also compete in the traditionally white market.