Rand Merchant Investment Holdings Explained

Rand Merchant Investment Holdings
Type:	Public
Foundation:	2010
Location:	Rosebank, South Africa
Key People:	Jannie Durandt - Chairman
Industry:	Insurance & Financial services
Products:	Insurance and Asset Management
Revenue:	ZAR: 13.69 billion (2015)
Net Income:	ZAR: 3.51 billion (2015)
Assets:	ZAR: 32.32 billion (2015)
Equity:	ZAR: 18.08 billion (2015)
Homepage:	Homepage

Rand Merchant Investment Holdings, also referred to as RMI Holdings, is a listed financial services investment holding company^[1] that holds various insurance brands in South Africa, Australia, China, Mauritius, New Zealand, Republic of Ireland, Singapore, the United Kingdom and the United States of America.^[2]

Overview

RMI Holdings is listed on the JSE and insurance and investment products and services to retail, commercial, corporate and public sector customers. The group has its headquarters in Sandton, South Africa.

History

RMI Holdings was incorporated and registered in South Africa on 24 March 2010 as a wholly owned subsidiary of RMB Holdings.^[3] On 7 March 2011, RMB Holdings (RMBH), Remgro and FirstRand span off their insurance assets to RMI Holdings and separately listing it on the JSE.

RMB Holdings Restructure

The RMB Holdings restructure was announced on 10 December 2010. Its aim was to create separate focused insurance and banking entities. Prior to the restructure RMB Holdings portfolio comprised^[4]

• FirstRand – 30% Shareholding.
• OUTsurance – 58.5% Shareholding – RMB Holdings held 45% of OUTsurance directly and an additional 45% through FirstRand bring the total control to 58.5%.
• Momentum Metropolitan Holdings – 18% Shareholding.
• Discovery – 25% Shareholding.
• RMB-Structured Insurance – 76% Shareholding.

The restructure was aimed at separating of RMBH's insurance and banking interests and was executed as follows:

• The transfer of the RMBH, Remgro and FirstRand's insurance interests to its newly incorporated wholly owned subsidiary, RMI Holdings. These insurance assets were transferred in exchange of additional shares in RMI Holdings.
• The unbundling of RMBH's shares in RMI Holdings to RMBH shareholders and the separate listing of RMI Holdings on the JSE by way of introduction. RMI Holdings would then become an insurance-focused investment entity.

Post Restructure

The RMBH restructure was completed on 7 March 2011^[5] and the shares of RMIH started trading at the JSE on the same day.^[6] This restructure was made possible due to the common shareholding in RMB Holding, Remgro and FirstRand. However, to date RMB Holdings and RMI Holdings share the same management team and resources under a management contract.^[7]

In January 2016, the firm changed its name to Rand Merchant Investment Holdings. This was in line with the firm's strategy to invest in the broader financial services sector and beyond the insurance industry.^[8] In the same year, RMI Holdings announced that it would be selling its entire shareholding in RMB-SI to Santam.^[9]

In 2022, RMIH holding embarked on a restructure of its operations. This involved the unbundling its entire stake in Discovery Limited and Momentum Metropolitan Holdings Limited to its shareholders^[10] and the sale of its stake Hastings Group Holdings plc.^[11] The company also resolved to change its name to OUTsurance Group.

Member companies

The companies that compose RMI Holdings include:

Current investments

1. OUTsurance Holdings Limited – South Africa – 83.6% Shareholding – OUTsurance is a holding company with subsidiaries that conduct both short and long-term insurance activities.^[12] Its subsidiaries include:^[13]
   • OUTsurance Life Insurance Company – South Africa – 100% Shareholding – Offering life insurance to the South African public.
   • OUTsurance Insurance Company Limited – South Africa – 100% Shareholding – Offering general insurance.
   • Youi (Proprietary) Limited – Australia – 93% Shareholding – Offering general insurance
   • Youi New Zealand – New Zealand – 93% Shareholding – Offering general insurance – The Youi Insurance NZ portfolio was sold to Tower Insurance in December 2019.
   • OUTsurance Namibia Insurance Company Limited – Namibia – 49% Shareholding – Offering general insurance. FNB Namibia owns 51% of the venture.
2. RMI Investment Managers – South Africa – 100%Shareholding – The Investment advisory arm of the group.
3. Entersekt – South Africa – 25.1% Shareholding – An online banking security company.
4. AlphaCode – South Africa – 100% Shareholding – A technology venture capital firm in South Africa.
5. Merchant Capital – South Africa – 25.1% Shareholding – A provider of working capital finance to SMEs in South Africa.^[14] Held through AlphaCode.
6. Prodigy Finance – UK – 3.5% Shareholding – an online platform that enables financing for international postgraduate students whilst delivering financial returns to investors.

Former investments

1. RMB-SI Investments Proprietary Limited – South Africa – RMB-SI trades in the short term and long term insurance sectors.^[15] RMIH sold its entire 76% Shareholding in RMB-SI to Santam in March 2017.^[16] RMB-SI included the following investments:^{[17] [18]}
   • RMB Structured Insurance Limited – South Africa – 100% Shareholding
   • RMB Structured Life Limited – South Africa – 100% Shareholding
   • RMB-SI Investments Mauritius Limited – Mauritius – 100% Shareholding
   • RMB Financial Services Limited – Republic of Ireland – 100% Shareholding
   • HCV Underwriting Managers Proprietary Limited – South Africa – 30% Shareholding
   • Truffle Capital Proprietary Limited – South Africa – 23.4% Shareholding
   • CIB Insurance Administrators Proprietary Limited – South Africa – 10.4% Shareholding
   • Cyan Capital Proprietary Limited – South Africa – 10.44% Shareholding
2. Discovery Limited – South Africa – 25.8% Shareholding^[19] – This is an integrated financial services organisation operating in the health insurance, life assurance, investment and health and wellness markets. Discovery operates in South Africa, the United Kingdom, China, Singapore and the United States through various brands.^[20] Discovery Limited's stock is listed on the JSE.
3. MMI Holdings Limited – South Africa – 25.2% Shareholding^[21] – MMI Holdings was formed through the merger of Momentum and Metropolitan. It is a leading financial services group conducting business in South Africa and elsewhere in Africa providing life insurance, short-term insurance, healthcare administration, asset management, investment and employee benefit programmes. Its stock is listed on the JSE.^[22]
4. Hastings Group Holdings plc – UK – 29.9% Shareholding – A general insurance provider listed on the LSE.^[23]

Ownership

The shares of OUTsurance Group Limited (formerly RMI Holdings) are listed on the JSE. the shareholding of OUTsurance Group Limited was as follows:^[24]

Rand Merchant Investment'Holdings

Rank	Name of Owner	Percentage Ownership
1	Financial Securities Limited^1	29.9
2	Royal Bafokeng Holdings Proprietary Limited^2	14.8
3	Allan Gray	8.0
4	Public Investment Corporation	7.0
5	Others Local and International Investors	40.3
	Total	100.00

1→ Financial Securities Limited is a wholly owned subsidiary of Remgro.

Governance

RMI Holdings is governed by a sixteen-person board of directors with Gerrit Thomas Ferreira as the chairman of the board. RMI Holdings shares a board with RMB Holdings.

Notes and References

1. Web site: RMI Holdings Details. https://web.archive.org/web/20141213212228/http://investing.businessweek.com/research/stocks/snapshot/snapshot.asp?ticker=RMI:SJ. dead. 13 December 2014. 2014-12-13. Bloomberg Business Week. Bloomberg L.P..
2. Web site: RMIH - Key facts. 2014-12-13. Rand Merchant Insurance Holdings.
3. Web site: RMIH - History. 2014-12-13. Rand Merchant Insurance Holdings.
4. Web site: RMB Holdings Limited - Circular to shareholders regarding the RMBH restructuring.. 3 February 2011. 13 December 2014. RMB Holdings Limited.
5. Web site: Pre-listing statement of RMI Holdings relating to the listing of RMI Holdings on the JSE with effect from the commencement of business on 7 March 2011. 3 February 2011. 13 December 2014. Rand Merchant Insurance Holdings.
6. Web site: Rand Merchant Insurance makes JSE debut. 7 March 2011. 13 December 2014. Fin24.
7. Web site: The Investment Case – Rand Merchant Insurance Holdings Ltd. 8 February 2012. 13 December 2014. Moneyweb. Moneyweb Holdings. Cairns. Patrick.
8. Web site: RMI to trade under new name. 2015-01-18. 2015-01-19. BDLive.
9. Web site: RMI and Santam announce the acquisition of 100% of RMB-SI Investments Proprietary Limited ("RMB-SI"). 23 August 2016. RMIH. 2016-12-07.
10. Web site: RMI Integrated Annual report 2022 . 31 December 2022.
11. Web site: Sampo Group's Recommended Cash Acquisition Of A Majority Stake In Hastings Group Holdings Plc . 31 December 2022.
12. Web site: History and Culture at OUTsurance. 2014-12-13. OUTsurance Holdings Limited.
13. Web site: OUTsurance Holdings Limited - 2013 Annual Report. 30 June 2013. 13 December 2014. OUTsurance Holdings Limited.
14. Web site: Merchant Capital - About us. 2016-01-19. Merchant Capital.
15. Web site: RMB-SI - About Us. 2014-12-14. RMB-SI Investments Proprietary Limited.
16. Web site: Santam enhances structured solutions offering with RMB-SI acquisition. 22 March 2017. Santam. 26 December 2017.
17. Web site: RMB-SI - Strategic Investments. 2014-12-13. RMB-SI Investments Proprietary Limited.
18. Web site: RMB-SI Group Structure. 2014-12-13. RMB-SI Investments Proprietary Limited.
19. Web site: 30 June 2014 . Discovery Limited 2014 Annual Report . 13 December 2014 . Discovery Limited.
20. Web site: Discovery Limited . 2013-12-13 . Discovery Limited.
21. Web site: 30 June 2013 . MMI Holdings Integrated Report 2013 . 13 December 2014 . MMI Holdings.
22. Web site: MMI Holdings - About us . 2014-12-13 . MMI Holdings.
23. Web site: 14 December 2016 . Statement re: Acquisition of up to 29.9% holding in the Company by RMI . 26 December 2017.
24. Web site: Rand Merchant Insurance Holdings 2017 Integrated report. 30 June 2017. Rand Merchant Insurance Holdings. 26 December 2017.