Capitec Bank, a leading retail bank led by South African billionaire banker Michiel Le Roux, has received approval from the South African Reserve Bank’s Prudential Authority to conduct life insurance business in South Africa.
The South African Reserve Bank’s Prudential Authority regulates financial institutions and market infrastructures to promote and enhance their safety and soundness, as well as to support financial stability in South Africa. The license that it granted Capitec Bank to conduct life insurance business in the country came after the bank met all the requirements stipulated by the apex monetary authority.
In accordance with the Prudential Authority’s approval, Capitec Bank will launch its life insurance business through Capitec Life, a wholly-owned subsidiary of the leading group, consolidating its existing operations in the insurance industry through two cell captive agreements with licensed cell captive insurers.
For context, cell captive insurers are non-insurance companies that act as direct insurers or reinsurers for a parent company and its subsidiaries.
Capitec explained that the decision to apply for the license was prompted by proposed changes to third-party cell captive regulations, as well as a significant increase in insured customer numbers while providing more insight into its foray into the life insurance business.
The bank added that its life insurance business through Capitec Life will replace the current cell captive insurers as underwriters of Capitec’s credit life and funeral policies, while its clients will continue to enjoy the simple, affordable, accessible, and personalized experience to which they are accustomed.
Capitec Bank is a leading South African bank and one of the country’s largest lenders in terms of customer base. Since its inception 20 years ago, it has grown into one of the most reputable banking brands in the world, providing transactional banking services and loan products.
Le Roux, a 73-year-old business magnate who co-founded Capitec Bank with Jannie Mouton and Riaan Stassen in 1999, owns 11.41 percent of the Stellenbosch-based financial services provider, which is one of South Africa’s largest retail banks.
Shares in the leading financial services group were trading at R1,696.21 per share in response to the new development, which is 3.5-percent higher than their opening price on the Johannesburg Stock Exchange.