Recent use case for customer attrition data from MARKABLES

Access Holdings Plc is a listed financial holding company in Nigeria (NGX:Accesscorp) with major activities in banking, payment services, pension administration and insurance.

In 2022, Access acquired controlling interests in the businesses of First Guarantee Pensions Ltd (FGPL) and Sigma Pension Ltd which subsequently merged to form Access Pension Ltd., a major pension fund administrator.

In valuing the acquired customer relationships under IFRS 3, Access applied the Multi-Period Excess Earnings Method (MEEM). Access adopted a useful life of 21.5 years which is the average useful life for customer relationships from previous transactions in the pension industry. Based on the trend in the pension industry and data collated from the MARKABLES database, Access adopted an attrition rate of 4.6% (average attrition rate for recent transactions in the pension industry), hence having a retention rate of 95.4%.

This is a good example of how to integrate benchmarking and market comps into the MEEM method and the valuation of customer portfolios. KPMG acted as auditor and assessed the appropriateness and reasonableness of the key assumptions in the valuation model.