Clientèle: Simple and affordable

Clientèle has always been something of an anomaly on the JSE. A business that began in 1993 as a small direct marketing broker, operating off a single floor with a handful of agents, has grown into a fully fledged insurance group with multiple channels, brands and a footprint across the country.

It has built this presence by keeping things simple: products that are easy to understand, targeted squarely at the mass market, and distributed through unconventional but effective channels such as its independent field advertiser (IFA) network. For years the company grew steadily and organically. But 2024 and 2025 marked a turning point for Clientèle, as the group moved into acquisition mode with two landmark deals that widened its reach, deepened its expertise and boosted its scale in South Africa’s fiercely competitive life insurance market.

The first of these was the 1Life Insurance deal in July 2024, a transaction that has already started to reshape the group. 1Life, a well-known brand in the mass market, brought with it a strong management team under Laurence Hillman, deep expertise in the Sassa grant client segment, and a recently launched rewards platform, 1Lifestyle, which mirrors Clientèle’s successful Royalty scheme. The integration has not been without challenges — mergers in financial services rarely are — but by all accounts the transition has gone smoothly. Operations were shifted onto the Clientèle campus and early synergies are already visible, particularly in the areas of cross-selling and shared distribution.

Barely a year later, Clientèle followed this with another bold move, acquiring Emerald Life in June 2025. While the 1Life transaction deepened Clientèle’s core life insurance offering, Emerald Life reinforced Clientèle’s funeral cover segment. Emerald, a licensed life micro-insurer, had built a strong presence in funeral insurance through a nationwide adviser-driven distribution model. With 18 branches, 380 staff and more than 3,500 independent advisers, it became known for affordable, accessible products that resonated in the same communities Clientèle serves.

For Clientèle, the attraction lay not only in greater scale but also in Emerald’s proven expertise and distribution muscle. Funeral cover remains the most widely purchased form of insurance among South Africa’s working poor and lower middle class, and Emerald’s integration strengthens Clientèle’s foothold in this critical market segment.

In South Africa, the life insurance industry is still dominated by heavyweights such as Sanlam, Old Mutual, Liberty, Momentum and Discovery. However, Clientèle is betting on being the fastest and most flexible player at the lower end, where success is not always about having the most capital, but about building strong distribution and trust at grassroots level.

A big part of Clientèle’s historic success lies in its IFA model. The system allows anyone to sign up as an IFA and earn commission by selling Clientèle products, usually to friends, to family, and within their own communities. It works on the simple premise that people are more likely to trust someone they already know than a stranger in a call centre. The model is remarkably low-cost because it sidesteps the need for big branch networks or heavy advertising campaigns. In many ways it resembles the multilevel marketing structures of companies such as Herbalife — legally structured, commission-driven networks that rely on personal trust and word-of-mouth rather than traditional corporate marketing.

Investors often view insurers through the twin lenses of embedded value and dividend yield, and on both fronts Clientèle now looks attractive. The group has grown its embedded value to about R20 a share, reflecting the inclusion of the new acquisitions, and yet the market still values it at a notable discount of about 30%. With earnings recovering strongly from the Covid disruption, the shares trade at a modest multiple of just 9.5, making them cheaper than most peers. At the same time, Clientèle maintains a generous payout policy. The latest dividend declaration of 132c a share translates into a yield of 9.4% at current prices — one of the juiciest yields in the sector.

None of this is to suggest that challenges have disappeared. Clientèle’s target market is under immense economic strain, and persistency — clients’ ability to keep paying premiums — remains a concern. Competition has intensified with banks, retailers and even telecoms operators entering the insurance space. Integration always carries risks, particularly when cultures and systems must be aligned. But Clientèle’s strategy is clear: it aims to be the leader in simple, affordable insurance for South Africa’s mass market, using low-cost and innovative distribution. The 1Life and Emerald deals fit this approach perfectly, adding scale and expertise without altering the company’s core identity.

With roughly 90% of the shares tied up by just two strategic investors — Hollard Insurance and the Enthoven family, best known for their role in founding Nando’s — trading liquidity is thin and institutions tend to stay away. For individual investors, though, that creates an opportunity to get a high-yield income stock at a much deeper discount to embedded value than its listed peers.