â€˜NEWâ€™ ALEXANDER FORBES SELLS
brokerage Change is in the air at Alexander Forbes, which has launched a new brand identity and sold its brokerage business to local office of US professional services group Marsh & McLennan. South Africa Magazine learns more. By Ian Armitage
Alexander Forbes FEATURE
brand is a company’s calling card – its first impression. And Alexander Forbes wants to leave a lasting one. In the words of its CEO Edward Kieswetter, “our higher purpose is to enhance your quality of life, now and into the future.” Alexander Forbes has invested in a new brand, a new logo and new look, which, it says, “underpin a renewed commitment to making a difference”. “The investment in a new brand is not a short-term commitment,” Kieswetter says. “It is a carefully considered decision to create the right impression for an Alexander Forbes whose reputation must continue to be founded on realising our client’s dream, and, through that, our own. “The brand is founded on the premise that we should all be able to have our dreams come true and live without regret. “Our new brand is more than a logo – our brand is an evolution of the existing Alexander Forbes brand, but it is also a break from the past and a fresh interpretation of the Alexander Forbes promise.” Kieswetter adds: “Our logo represents a new strategic direction. It signals a clear shift forward, a determined, modern and meaningful expression of what we stand for and spire to.” The insurance broking company that became Alexander Forbes was founded in 1935. It grew through the expansion of Price Forbes Life and Pension Brokers, which were founded in the 1950s. In 1999, after a series of corporate restructures and mergers, the global Alexander Forbes brand was created and adopted. Today, headquartered in Sandton, it is a leading provider of risk, insurance, health, retirement and multimanager investment solutions internationally. Primary operations are based in South Africa, Africa, the UK and parts of Europe. Group operating income for 2010/11 was R4.6 billion. Operating profit increased by eight percent to R1.1 billion over the same period. Kieswetter says: “The group’s overall financial results for the year to March were satisfactory and characterised by marginal growth in revenue with stringent control of cost whilst still continuing to make the necessary investments in its resources, systems, controls, leadership and brand.” www.southafricamag.com
Alexander Forbes FEATURE
These investments and capacity building were important to drive the targeted growth in top-line revenue in the medium- to long-term. UK operations, which had been severely hit by the recession, recovered substantially. “The turnaround brought about in the financial services business in the UK, to return to profitability, was particularly pleasing. The recovery in equity markets supported the results in both Investment Solutions and certain parts of the Financial Services businesses,” Kieswetter says. The significant cost saving measures implemented over the past two years drove the improved performance. “Demand for pension de-risking solutions, as well as advice on the impact of recent taxation and pending pension changes, remain strong.” In September, Marsh, a wholly owned subsidiary of Marsh & McLennan Companies, announced that it had reached an agreement to acquire Alexander Forbes’ brokerage business. The business comprises Alexander Forbes Risk Services and certain local and correspondent operations serviced across sub-Saharan Africa, including Botswana 4
and Namibia. Kieswetter says that the deal was consistent with Alexander Forbes’ growth strategy and would be mutually beneficial. The transaction is subject to regulatory and other approvals. “Alexander Forbes Risk Services will gain access to the expertise of the world’s leading international insurance broker, while Marsh will develop their African footprint through our established on-the-ground expertise and extensive client relationships,” Kieswetter explains. The consideration payable by the various Marsh subsidiaries is R808.7 million, but
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may, subject to certain conditions and the achievement of specified revenue, operational and strategic performance targets, increase by up to R310.5 million to R1.119 billion. The transaction is due for completion in the fourth quarter of 2011. Marsh said in a release that it will have “taken a significant step forward” in expanding its presence in Africa - in particular, it will have a leading market position in South Africa. “The transaction combines Alexander Forbes’ well-established South African operations, broader network and respected enterprise with Marsh’s global solutions, resources and placement capabilities to enhance Marsh’s competitive position in key markets,” Marsh said. Peter Zaffino, President and CEO of Marsh, explained: “Marsh recognises the tremendous potential of the African
continent as a major market for insurance and risk management services. In Alexander Forbes Risk Services we will acquire a highly regarded firm, greatly strengthening our immediate presence and providing us with a powerful platform to deliver value to the fast-developing sub-Saharan region.” David Batchelor, Head of International at Marsh, added: “This transaction is positive news for our clients, colleagues and the risk and insurance industry across Africa. Our clients will benefit from the deep expertise brought together in the combined business; our colleagues will enjoy expanded career opportunities; and our global services and solutions will give greater options to companies of all sizes across the region.”
This is an exciting time for Alexander Forbes, whose growth strategy remains on track. Learn more at www.alexanderforbes.co.za. END
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