MultiChoice Secures $67M in Insurance Unit Sale Amid Streaming Shift

Pay-TV giant MultiChoice is set to receive a cash infusion of R1.2 billion ($67 million) by the end of November following the sale of its insurance arm, NMS Insurance Services (NMSIS), to Sanlam Life. This deal, announced in June and recently greenlit by South African regulators, enables Sanlam to continue offering long-term insurance policies to MultiChoice customers.

The transaction could escalate to R2.7 billion ($150 million) by 2026, contingent on NMSIS meeting specific gross premium targets. For the fiscal year ending March 2024, NMSIS reported impressive growth, with gross written premiums rising 36% to R970 million ($54 million) and profits after tax jumping 51% to R296 million ($16 million).

Previously providing policies for decoders and other MultiChoice equipment, the sale of NMSIS allows the company to focus on its core services. The move comes as MultiChoice faces mixed financial results, grappling with profit losses in markets like Nigeria and Zambia due to currency devaluation and battling subscriber churn in its streaming sector.

However, there are bright spots. Showmax, MultiChoice's local streaming platform, has seen its subscriber base grow by 50% year-on-year. The company is channeling significant resources into the platform, aiming to challenge global competitors in the streaming space. Additionally, fintech offering Moment and sports-entertainment arm KingMakers have delivered promising results.

This strategic pivot signals MultiChoice’s shift toward value-added services and digital streaming to navigate evolving market demands and secure long-term growth.