AUGUST 2014

Industry intelligence to nancial professionals www.cover.co.za

COVER
EXCELLENCE
AWARDS
And the Oscar goes to...

INCOME PROTECTION
What if your clients income ceased?

FPI CONVENTION
Nurturing potential

LIABILITY INSURANCE
The many faces of liability insurance

OFC_portrait.indd 1 2014/07/21 4:21 PM

 Renasas highly personal service is underpinned by advanced claims
and underwriting technology. We give our brokers state of the art
tools that provide a sustainable competitive advantage without inter-

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 fering with their existing processes and systems, or compromising their
independence. Want the best of both worlds? Contact Renasa today on
0860-RENASA or visit www.renasa.co.za.

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 25 YEARS OF INDUSTRY INTELLIGENCE

CONTENTS
COVER AUGUST 2014

38

SHORT-TERM
Are your products legal? 24
Winter: peak time for Gauteng fires 26
Consumers are underinsured 27

FINANCIAL PLANNING
A network of healthcare 82
Pension fund distribution 83
Pension a pipe dream? 84

ON THE COVER
Is credit life necessary? 85
Nedbank business conference 86
Securing a wealthier future 88
LIABILITY INSURANCE: WHAT IF? 8 Think big for long-term gains 89
The future of finance 89
Connected consumers come with a new
breed of risks. What are our biggest
challenges in the face of liabilities? Is the
insurance industry armed to take the test?
WORKING WITH WHEELS
CELEBRATING FPI PROFESSIONALS 38 Are we ready for self-driving cars? 30
Wireless fleet management in Maputo 32
The 2014 Financial Planning Institute
Professionals Convention spoke to the theme
Growth through Innovation. COVER
brings you the highlights of the two days.

HEALTHCARE
PROTECTING YOUR PRECIOUS INCOME 72
Has income protection takes its rightful Healthcare innovation 62
Tips for my client 63
place in protection portfolios, and what
products are offered to meet the SA clients
needs?

COVER AWARDS 2014 90

UMA CORNER
The last night of the 2014 International
Insurance Conference celebrated the Genric launches aviation UMA 22
industry leaders at the annual COVER
Awards, hosted by Allianz.

The views expressed in this magazine do not necessarily represent those of its
owners, publishers or editorial staff. Editorial contributions sent to COVER are
Subscription rate: R470 per annum in South Africa. subject to editorial change to suit the style of the magazine. All manuscripts,
Other rates on application. photographs and other similar matter are accepted on the understanding that no
loss or damage is borne by the publisher, the editor or their personnel.
2 COVER AUGUST 2014

Aug 14.indd 2 2014/07/20 9:08 PM

 Tired of Drawing Straws ?

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Untitled-2 1 2014/05/13 3:51 PM

 72 90

EDITOR
UMA CORNER Tony van Niekerk
tony@cover.co.za
Genric launches aviation UMA 22
EDITORIAL
Annetjie van Wynegaard
annetjie@cover.co.za

Taryn Kerr
RISK MANAGEMENT taryn@cover.co.za

ADVERTISING & MARKETING

Cyber vs Tech PI Round 2 34 Hermione Ballinger
Gearing up for Cybergeddon 36 hermione@cover.co.za

EDITORIAL, ADVERTISING & MARKETING

Thenjiwe Roda
thenjiwe@cover.co.za

AFRICA RISING ADMIN & SUBS

Brent Munnik
Africa draws strength from her women 94 brent@cover.co.za
Better health for mother and child 95
Africans urged to invest in agriculture 96 LAYOUT & GRAPHIC DESIGN
Bancassurance conference coming up 100 Wesley Chipps
wesley@cover.co.za

Publisher
COVER Publications

TECHNOLOGY Street address

80 Devilliers Way,
Glencairn, Cape Town
Nedbank reflects on 50 years of success 102
An app for Treating Customers Fairly 103
Postal address
How often do you back up your files? 104 P O Box 2030
Sun Valley, 7985

Telephone (083) 567-0757

Fax (086) 642 6263
REGULAR E-mail: info@cover.co.za
Website: www.cover.co.za
Editorial 6
Images: 123rf.com; istockphoto.com
Regulation Conference 64 & shutterstock.com
Coffee with COVER 70
CSI 71 Editorial Board
Associations 105 Peter Atkinson, Seamus Casserly,
Events 106 Mike Duncan, Ronald Gordon, Mark Haken,
Jonty Kirkman, Baravand Madhav,
Market Cover 109 Rod Pearson, Colin Travers.
Product Development 112
Advisory Committee
Carel Nolte, Viviene Pearson, Kalim Rajab

The Editorial Board serves in a voluntary and

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() 2014
All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted, in any form or
by any means, electronic, mechanical, photocopying, recording or otherwise, without the prior permission of the publishers. Any
unauthorised reproduction of this work will constitute a copyright infringement, rendering liability both under civil and criminal law.
4
ISN 1013-1507 COVER AUGUST 2014

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Untitled-1 1 2014/07/18 3:19 PM
 Editorial

We will take
you there
By the time you read this,
the International Insurance
Conference 2014 would have
come and gone, unless you were
one of the lucky ones to have
attended the conference.

In the latter case, you would have

received your COVER on your pillow at
midnight, when you finally get to your
room after the Allianz Gala and COVER
Awards dinner (and perhaps the after
party!) This black tie and stunning
dresses event takes place every year
with a whole lot of glitz and glamour,
and 2014 did not disappoint.

The annual insurance conference

at Sun City is not only a productive
networking platform but it also
provides us with two days of CPD point
worthy presentations, a time to share
who we are with stakeholders from
all areas of the industry and finally
to award those who made or are still
making an exceptional contribution to
the industry. The COVER Excellence
Awards are handed over on the final
evening at a fabulous dinner, sponsored
by Allianz.
On page 90 you will find detail of
the winners, who they are and what
makes their contribution exceptional. I
would like to congratulate them from
this public podium, for their efforts in
growing our industry and for assisting
each and every one of us to be more
successful in one way or another.
COVER is proud to be able to facilitate
the awards programme and would like
to thank the IISA, the judges who had
to make the decisions and Allianz,
who sponsored the dinner. I would
like to extend a special word of thanks
to the many people who recognised
those who should be thanked for
their contribution. There were many
candidates who should be recognised,
but unfortunately there can be only
one winner in each category.
With the conference now behind us,
look out for our Flip Im in a Fliek
competition. We had so much fun with
this initiative, co-hosted by COVER,
Oakhurst Insurance and Genasys
Technologies, before and during the
conference. We now give those who
I WOULD LIKE TO EXTEND A
SPECIAL WORD OF THANKS TO THE
MANY PEOPLE WHO RECOGNISED
THOSE WHO SHOULD BE THANKED
FOR THEIR CONTRIBUTION.
could not participate an opportunity to
share in the fun. Flip Im in a Fliek saw
numerous people from the industry
try their hand at acting, and we now
want you to select the industrys best.
During the next few weeks we will
circulate details of the competition,
with big prizes to be won. All you will
have to do is follow the link we will
be sending you, laugh yourself to bits
while watching the hilarious video clips
and then nominate your choice for the
Insurance Industry Oscars.
We COVERed the conference from all
angles and our website and newsletters
will be full of video clips, interviews
and photographs from the conference.
With our September issue we will also
bring you comprehensive feedback
on the conference, in a separate
conference specific publication. If you
could not attend, we will take you
there.
Lastly, I would like to say a word
of thanks to the COVER team. You
never thought it was possible to do
everything you did, but the world
belongs to those who dare, and you
succeeded. In the words of Buzz
Lightyear:
To infinity and beyond!

6 COVER AUGUST 2014

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Untitled-1 1 2014/07/18 3:19 PM
 Liability insurance

THE MANY FACES OF

LIABILITY INSURANCE
The rise of consumer awareness and protection legislation has increased the need for
protection from liabilities. Social media has made it so much easier for consumers to voice
their grievances, adding the dimension of reputation management to the mix. COVER asked
industry experts: Is liability insurance still a specialised segment and are insurers and brokers
equipped to provide clients with appropriate products and advice?

A penny for
your thoughts
JOHN STEBBING,
CGL Director, Camargue
She was just a little person,
probably no more than five or
six years old.
Fat people! she muttered darkly as
she squeezed past me in the shops
narrow aisle. Yeah, there is so much
more to us, I said, grinning broadly.
But she didnt seem to notice that I
had expanded on her observation.
Moments later she had reached her
mother, who had obviously heard the
exchange. Mothers have a special
way of speaking when confronting
embarrassing situations in public
spaces. Its a vocal conflict between
a shout and a whisper, between an
emotionally rich roar and the caged
confines of politeness. Ultimately the
turmoil is spat out in hushed tones
Penny! Say excuse me not and
suddenly realising that I was still
within earshot steered the trajectory
of her tirade away from something
that could have collided with further
awkwardness. It was a near miss, but I
respect her sensitivity.
Its hardly the first time that a mothers
advice has been misinterpreted,
misunderstood, misconstrued or bluntly
ignored. As a parent I can relate
to that mother. There is a feeling
of frustration and helplessness that
accompanies having to rely on others
to implement your advice correctly. To
make matters worse, its not confined
to being a parent. In fact, there is an
entire career waiting for young people
who would like to explore the world
of giving advice to others. Best of all,
in their career as an insurance broker,
they will get to see how that advice
is misinterpreted, misunderstood,
misconstrued or bluntly ignored, by
grown-ups.
The problem with bad advice or bad
adherence to good advice is that the
results can be expensive. Giving advice
to clients has become an increasingly
interactive experience. Clients who feel
they have lost out because of a brokers
bad advice are usually quite diligent in
providing their broker with feedback.
This is commonly referred to as a
Professional Indemnity claim.
On a more serious note, its worth asking
how brokers are most likely to get into
trouble. Although the most obvious
candidate is failing to arrange cover,
brokers are facing increasing flack for
failing to advise their clients of all the
cover options. This is especially true
in liability insurance. As South African
society becomes more litigious, providing
adequate liability cover is becoming
increasingly important and complex.
The reality is that brokers simply cannot
be expected to know or remember
everything. Unless someone is working
with a specialist product on a frequent
basis it becomes almost impossible
to maintain the necessary technical
skill. To be fair on the intermediaries,
underwriters need to provide suitable
technical support for the products that
they offer; which means including
the cost of suitably skilled technical
support when budgeting for the cost of
distributing their products.
For further information on Camargues
Liability Cover visit
www.camargueum.co.za or find us on
Facebook.
*Names have been changed to
protect the identity of the individuals
mentioned

8 COVER AUGUST 2014

Aug 14.indd 8 2014/07/18 3:10 PM

 Total Recall
One breach in quality control
could jeopardise a companys
reputation for years to come.
The fact is the risk of product
recall is a growing concern for
all businesses, impacting profits,
customer loyalty as well as
brand sentiment. Here are some
of the factors driving the need
for product safety and recall
insurance and trends insurers
in this specialised sector will
need to take note of.
MOBILISATION AND LEGISLATION
From hazardous computer batteries to
defective childrens prams, the need
to remove products from shelves
could happen to any business. The
mobilisation of civil society has resulted
in an increase in consumer awareness
around company activities. Social
media and other online communities
are ensuring that product safety issues
spread like wildfire, creating concern
and holding companies accountable
for all actions no matter where the
issue originates. Another danger is
the potential for intentional product
tampering and extortion. Increased
regulation and legislation, such as
the Consumer Protection Act (CPA),
also imposes stringent standards on
businesses. Consumers are entitled to
receive good quality products, free of
COVER AUGUST 2014
Aug 14.indd 9
any defects and also have the right
to claim for damages for any injuries
caused by unsafe goods. Furthermore,
in these instances anyone in the supply
chain, whether distributors, retailers,
importers or producers, can be held
liable.
COMPETITION AND EXPECTATION
There is no doubt that businesses are
operating in a highly competitive and
complex environment. Increasingly,
suppliers are being sourced from
developing countries where products
and labour are cheaper, but codes and
regulations may not be as strict. As
supply chains evolve, risk management
becomes more of a challenge because
standards are more difficult to monitor
remotely. At the other end of the
spectrum, some retailers strongly
influence the practices of their supply NIKKI JUMA,
channels, holding them to stringent Casualty Head, Zurich South Africa
procedures and regulations; even
charging them in the event that a
suppliers product has to be removed
from the shelves. In order to ensure from direct customer returns and
that they are able to recover costs business interruption losses, to the
many retailers are insisting that transportation of unsafe products
suppliers are covered by product recall and even ransom money for product
insurance. extortion. Another important factor to
consider is the inclusion of expenses
CONTINGENCY AND associated with consultants that have
COMMUNICATION to be brought in to manage a crisis
The fact remains that insurers will this could include the drafting of
have to expand their product portfolios holding statements, media liaison
and work closely with their brokers and the manning of customer call
to address the above challenges. centres. Money for advertisements and
Policies will need to cover everything announcements in various publications
and on certain broadcast stations may
also be part of regulatory requirements
during a recall.
The good news is that recall insurance
reduces the immediate financial
burden, leaving the company able
to mitigate the negative effects by
affording the correct consultative
support and ensuring that customers
are seen to be prioritised from the
start. While a positive reputation or
favourable consumer confidence in a
business could be severely affected by
a recall, it is proven that the ability to
implement this action quickly and with
no perceived reluctance can go a long
way to rebuilding public trust.
9
2014/07/18 3:10 PM
 Liability insurance
Separating fact from ction:
D&O insurance myths
SHIRLEY HIRST,
Head of Financial Lines at
Hollard Specialist Liabilities
Myths live on and turn into
assumptions which can cost a
fortune these days with litigation
increasing and becoming a
greater risk for individuals in
business.
To assist you in your own company as
well as give intermediaries the factual
information needed to advise clients
effectively, here are the most common
mythical beliefs concerning Directors
and Officers (D&O) exposures that
need to be buried.
I HAVE LIMITED LIABILITY.
No you dont! Not in terms of the new
Companies Act of 2008.
Just because the company is limited
doesnt mean that your liability as
a director or officer of the company
is limited. There is no limit on the
personal liability you can incur
for actions such as negligence or
failing to take sufficient care. The
personal assets, property, savings and
investments of directors are subject
to exposure whether you have acted
deliberately, negligently or innocently.
The Act has expanded the definition of
a director. It now includes members
of the committee of the board, of an
10
Aug 14.indd 10
audit committee, company secretaries,
prescribed officers, and employees in
managerial positions. This means even
people occupying senior positions who
are not directors, will also be exposed
to the heavy liability provisions under
the new Act.
Proving your innocence can be
prohibitively expensive, but D&O
insurance provides cover for damages
as well as the related legal and
investigation costs.
D&O INSURANCE COVER IS
EXPENSIVE.
Wrong assumption! A corporate policy,
which would protect all directors
and management employees on an
umbrella basis, is reasonable and
affordable for all sizes of companies. At
Hollard we also consider D&O cover for
members of Close Corporations.
JUST BECAUSE THE
COMPANY IS LIMITED
DOESNT MEAN THAT
YOUR LIABILITY AS
A DIRECTOR OR
OFFICER OF THE
COMPANY IS LIMITED.
THE COMPANY WILL DEFEND
ME.
Are you certain of this? Having
an undertaking in the companys
Memorandum of Incorporation is
sensible, but what if the company
doesnt have the financial resources or
cash flow to fund your defence when
a summons arrives? Make sure your
company has D&O insurance with an
adequate Limit of Indemnity, bearing
in mind the ever increasing costs of
litigation today.
WERE ONLY A SMALL COMPANY.
This makes absolutely no difference!
The size of a company bears no
relation to the size of a claim you
may face. A small company may also
struggle to meet the costs of your
defence.
WRONGFUL ACTIONS
CAN TAKE SEVERAL YEARS
TO MATERIALISE SO
RESIGNING OR RETIRING
IS NO DEFENCE.
MY LEGAL EXPENSES INSURANCE
POLICY WILL COVER ME IN MY
PERSONAL CAPACITY.
Are you sure? Most legal expenses
policies contain a prospects clause
which means insurers will only respond
when they have an odds-on chance of
winning. That leaves a big risk.
I DONT WORK FOR THE
COMPANY ANYMORE.
That doesnt matter! You are still
responsible for the way the business
was run while you were there.
Wrongful actions can take several years
to materialise so resigning or retiring
is no defence. Would the company
use its own resources to defend you
after youve left? The good news is
that a D&O policy can extend to cover
directors and officers who have retired
from or left the company.
AS A NON-EXECUTIVE I CANT BE
FOUND LIABLE.
False! In terms of the new Companies
Act, there is no distinction between
executive and non-executive directors
liability. A D&O policy will extend
to cover both executive and non-
executive directors.
COVER AUGUST 2014
2014/07/18 3:10 PM
 SHAPING UNIQUE
SOLUTIONS
THAT SHINE
Emerald Risk Transfer is currently For more information on our products and how
the largest Corporate Property and Emerald can assist your Corporate clients, visit
affiliated Engineering Underwriter in our website or call us.

South Africa, and underwrites business

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The solution orientated approach of the Emerald E info@emeraldsa.co.za
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Emerald writes business into the insurance licence

of Santam Limited. Santam has a Standard &
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Poors rating of A- with a stable outlook. services provider (FSP No. 13893). Emerald is a wholly owned subsidiary of Santam Limited.

Emerald_globe_210x275.indd 1 2014/05/09 10:06 AM

Untitled-1 1 2014/07/18 3:21 PM
 Liability insurance
The dark side of the
commoditisation beast
SIMON COLMAN
Underwriting Executive at SHA
While the local market is now
awash with various professional,
fiduciary, technology and labour
related liability insurance policies,
it is probably best to start with
the most common of specialist
policies, being the broadform
liability policy.
Contrary to popular belief, broadform
was not introduced a few years
ago to South Africa. The first wide,
non-accidental policies arrived in
South Africa in the 1970s and were
exclusively written by the Lloyds
12
Aug 14.indd 12
market. In those days the buyers
of the policies were generally large
conglomerates or multinational
businesses. These days the cover is
commonplace and even the smallest
business in the SMME sector has the
ability to source relatively inexpensive
cover.
Of course any expansion into new
sectors should be healthy for the
industry, what with increased premium
income from a growing entrepreneurial
client base. The reality however is
that the commoditisation of the cover
has led to the inevitable erosion of
the premium. As recently as 2003, it
was difficult to procure a R5 million
broadform liability policy for less than
R10,000 premium. Now such a policy
for a relatively high hazard risk (such
as a Service Station dispensing fuel)
can be procured for under R5,000.
This of course is also off the back of a
much more litigious environment and
one in which the injured consumer (the
hapless third party) has more statutory
protection than ever before.
WE DO OF COURSE SUPPORT THE
NOTION THAT THE COVER SHOULD
BE AVAILABLE TO ALL BUSINESSES
AT AFFORDABLE PREMIUMS.
We do of course support the notion
that the cover should be available to
all businesses at affordable premiums.
Today, more South African businesses
have broadform liability than one
wouldve thought possible 10 years
ago. Brokers now have access to
the most incredible, technologically
advanced tools to insure their clients at
the press of a button.
There is however a dark side to
the commoditisation beast and
unfortunately its often the brokers
in the market that have to bear the
consequences of its bite. There is often
a correlation between the premium,
and the amount of time intermediaries,
clients and even some underwriters,
are prepared to spend discussing the
cover and its rather important list of
exclusions. The net result is often that
the insurance has been oversold in
terms of its capabilities.
Just the other day before a
presentation a broker approached
me and said he really loves this
broadform stuff because it provides
contractual liability cover. If his client
breaches a contract, hes covered.
This is a perfect example of how
someone has misinterpreted the lack
of the contractual liability exclusion
in the broadform to mean that it is
some kind of omnipotent breach-
of-agreement policy. This little
misunderstanding, if not corrected,
would have inevitably led to a costly
and rather embarrassing PI claim
against the broker.
So it is about continuously
understanding what we as an industry
are underwriting, marketing and selling
to our clients. Insurance brokers and
underwriters need to be trained and
equipped to guide their clients to make
the right risk transfer choices for their
specific businesses.
Even in a highly commoditised
environment, we shouldnt be
mesmerised by one-size-fits-all
insurance products, and we shouldnt
be tempted to pay less attention just
because our clients pay less premium.
COVER AUGUST 2014
2014/07/18 3:10 PM
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Untitled-1 1 2014/07/18 3:21 PM

 Liability insurance
Severity of Medical Malpractice
claims up 500% in 10 years
NICKY STOKES
Manager of Medical Malpractice
and Professional Indemnity for
Hollard Insurance
The need for insurance
intermediaries to be up to date
with changing circumstances is
critical in all specialist areas, but
there are dramatic developments
and misunderstandings in the
medical arena that need urgent
attention.
The number of malpractice claims
against doctors has risen substantially
over the past 10 years and the severity
14
Aug 14.indd 14
of insured losses being paid out has
increased by over 500% in the same
period.
There is a misconception that problems
only arise in government institutions
where there is a lack of facilities and
doctors are thinly spread, resulting in
shortcuts being taken. But the risk
in private practice is just as high. We
have even seen claims emanating from
allegations of excessive treatment and
the related costs to the consumer.
SPECIFIC SPECIALIST
FIELDS OF MEDICINE
OBVIOUSLY ATTRACT
MUCH HIGHER RISKS.
This increase in over-servicing claims
has become a reality as a direct result
of consumers being more educated
when it comes to their rights. In a
defensive move, doctors may do more,
rather than less, to try and prevent any
potential possibilities in misdiagnosis.
The need for professional indemnity
and medical malpractice insurance
is obvious but it is also important
for brokers to understand the whole
picture clearly so they can establish an
advisory and empathetic relationship
with their medical clients instead of
merely selling them insurance.
FACTS YOU NEED TO KNOW
Since the Consumer Protection Bill was
first proposed, general awareness of an
individuals rights have put substantial
pressure on service providers, such
as doctors, as they are the first in
line with aggrieved consumers. This
means that even if a malpractice suit
is actually due to a faulty product
or equipment used in a medical
procedure, the doctor is the first to be
held responsible. The legal defense
costs in this kind of example could run
into hundreds of thousands of rands.
Specific specialist fields of medicine
obviously attract much higher risks.
Examples include: obstetrics, spinal
surgery, orthopedics and anesthetics.
It is important to note that the stance
of insurers worldwide on medical
malpractice insurance means that
some fields of medicine are fast
becoming uninsurable. The premiums
for medical malpractice are also
increasing exponentially which has led
to a number of doctors choosing to
continue to practise uninsured.
This is a frightening reality, especially
for the consumer. Although there has
been talk over the past decade of a
move to legislate mandated insurance
protection for medical professionals,
this has yet to happen. Until then,
there is no guaranteed protection for
consumers.
So-called ambulance chasers within
the legal profession intensify the
problem.This is an additional worry for
doctors because there is an increased
focus among some legal firms on
medical malpractice litigation. They
usually work on a no claim no pay
basis, which can result in them driving
up the damages payout to further their
own interests.
Medical Malpractice insurance is
quite clearly critical to any medical
professional, but knowledgeable risk
assessment and management is also
essential to avert financial disaster.
COVER AUGUST 2014
2014/07/18 3:10 PM
 Liability insurance for
the construction industry
Until fairly recently liability
insurance for the construction
industry was restricted to the
Public Liability section of the
Contract Works policy and
Professional Indemnity policies
for construction professionals like
architects, consulting engineers,
quantity surveyors and other
construction professionals.
With the advent of complex multi
discipline contracts and in an
increasingly litigious environment, many
contractors, developers and financiers
have identified a need to enhance
their protection against incidents that
could result in the award of damages
against them due to the negligence of
THE POWER OF KNOWLEDGE
AUTHORISED FINANCIAL SERVICES PROVIDER, LICENSE NUMBER: 6344. APPROVED LLOYDS COVERHOLDER PIN: 107824DRW
Camargue Underwriting Managers (Pty) Ltd. Co. Reg. No. 2000/028098/07. DIRECTORS: MG Marescia (Managing), V Hayter, A Mullins, GJ de Bruin
33 Glenhove Road, Melrose Estate, Rosebank, 2196, Johannesburg. Postnet Suite 250, Private Bag X4, Bedfordview 2008, Johannesburg
Telephone: 011 778 9140, Facsimile: 011 778 9199, E-mail: camargue@camargueum.co.za, Website: www.camargueum.co.za
COVER AUGUST 2014
Aug 14.indd 15
ANDREW BROWN &
KEITH MUMFORD,
International Underwriting and
Marketing Managers at AC&E
one of the parties to the contract. This
has given rise to a range of products
becoming available on the insurance
market to provide role players in the
construction industry with broader cover
than was previously available.
Such insurance policies are normally
underwritten by companies who
specialise in this field and there are not
many in South Africa that possess the
relevant expertise to underwrite these
risks successfully. The authors of the
article have worked extensively in the
construction industry before becoming
professional indemnity and broadform
liability underwriters and understand
the clients needs.
One example of the extended family
of purpose designed insurance policies
is Single Project professional indemnity
where the participants in the entire
Beyond
Insurance
Camargue is more than a policy. Camargue is more than a product.
Camargue is a concept.
The Camargue concept is driven by an inherent desire to keep challenging
what is possible in the world of specialised liability management. Bringing risk
management solutions and risk management services to an ever-increasing
range of clients - with ever-increasing impact on business, society & beyond.
The Camargue concept acknowledges people as the proponents of
knowledge, making successful & sustainable business a reality. A concept
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15
2014/07/18 3:10 PM
 Liability insurance
project receive protection. This includes
professionals in all disciplines, the
contractor, sub-contractors where
they have a professional responsibility,
and to the extent that they have a
professional responsibility, vendors
and suppliers. The developers own
in-house professional team would also
be accommodated in such a policy.
For example, an important aspect
of the risk in major projects is in the
design and installation suppliers, for
example escalators, where the design
risk is not necessarily addressed by the
professional team or the developer.
The sky is not even the limit
CARLY RANGER
Specialist Underwriter
within the Aviation Division
of Infiniti Insurance Limited
Aviation Liability Insurance is
specifically designed to protect
the Aviation industry against
third party insurance claims
for damage to property and
passengers.
Cover is offered on a wide range of
legal liabilities associated with aircraft
operators and owners, aerodrome
operators and owners, maintenance
and repair companies, air show
organisers, aviation product suppliers,
manufacturers, avionic software
suppliers, as well as service providers
16
Aug 14.indd 16
This risk is incorporated in the Single
Project professional indemnity policy.
Generally, Single Project PI policies carry
much higher Limits of Indemnity than is
provided by the individual professionals
working on the project and the
determination of the Limit of Indemnity
and the excess is a risk determination
exercise that the broker or insurance
advisor must undertake with the client
and the professional team.
One important aspect is that the liability
insurances must accurately reflect and
satisfy the various parties obligations
under the respective contracts.
There is often also a contract
requirement that Public Liability
insurance is provided for the
same period as the Single Project
professional indemnity policy and
this makes it very important that any
policies issued for the construction of
projects, be they on annual basis or
for a specific project, align with the
including refuellers, caterers, security
screeners and the like. It is a specialist
area of liability that is obtainable only
from specialist aviation underwriters
and reinsurers.
Unlike aircraft hull insurance, which
is a known quantity, aviation liability
is the unknown. Careful consideration
must be given to the limit of indemnity
that is purchased.
WHEN HELPING CLIENTS TO
PURCHASE LIABILITY INSURANCE,
WHAT FACTORS SHOULD THE
ADVISOR CONSIDER WHEN
EXAMINING THE UNIQUE RISK
PROFILE OF AN OPERATOR?
general contract conditions and with
special conditions of contract in this
regard.
Many contractors are also taking
advantage of annual specialised design
and construct professional indemnity
and also tailor-made Broadform
Liability policies that are specifically
written to accommodate the wider
risks of the contractors. These
policies include Products Liability,
Mitigation Expenses, Foundation Failure
Indemnity, Employers Liability and
Excess of Loss.
It is essential that, when providing
advice to clients who work within
the construction industry, whether as
contractors, construction professionals
or developers, they be fully appraised
of the products that are available and
to place cover with suitably qualified
and experienced underwriters. The
above products will be provided by
AC&E Professional Indemnity & Liability
Underwriters from 1 July 2014.
It is not a one-size fits all cover. The
aerodrome operator or owner will
largely be governed by the category
of their operating license, which in
turn will determine the maximum
size parameters of aircraft permitted
to operate into and out of the said
airport. This will in turn determine
the level and nature of liability cover
required. Consideration will also have
to be given to frequency of flights, the
nature of these flights and origin of the
flight and air traffic control availability.
Imagine too the potential for liability
exposure to the aircraft repairer
whose faulty workmanship could have
potentially devastating consequences to
COVER AUGUST 2014
2014/07/18 3:23 PM
 Hollard FP
JHB 46757

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COVER AUGUST 2014 17

Aug 14.indd 17 2014/07/18 3:10 PM

 Liability insurance
third party property and passengers. Or
consider the destruction that a hangar
fire could cause and the effect that this
would have on the third party operator.
WE HAVE YET STILL TO
CONSIDER THE UNKNOWN AND
POTENTIALLY THE MOST ONEROUS
RISK TO THE OPERATOR.
Whereas the operators or owners of
aircraft are advised to consider the
size of the fleet operated, the type
of aircraft in operation, the seating
capacity of the aircraft, the takeoff
weight of the aircraft and the prevailing
legislation in the areas of operation are
all factors which will help to determine
the prescribed minimum liability limits
for both passengers and third parties
alike. However these are only some of
the quantifiable determinants.
We have yet still to consider the
unknown and potentially the most
onerous risk to the operator.
SEE OUR
NEW
WEBSITE
WWW.COVER.CO.ZA
Subscribe online,
email Brent:
brent@cover.co.za
or call: 083 567 0757
18
Aug 14.indd 18
ENTERS THE PASSENGERS
It is highly recommended that
operators consider the profile of their
passengers. Are passengers more
likely to be foreigners or South African
nationals? Will the operator be exposed
to high net worth passengers, say a
Bill Gates perhaps? Where will the
passengers be travelling to (the place
of destination) under the care of the
operator? From where were the tickets
purchased (locally or abroad?) Were
the tickets purchased through a foreign
tour operator?
How much liability should one
purchase? Is the prescribed minimum
liability limit adequate enough to
protect the operator?
IS THERE TRULY A DEFINITIVE
ANSWER TO THE AGE OLD
QUESTION HOW LONG IS A PIECE
OF STRING?
Consider the question in the light
of a society thats becoming more
litigious, and with personal damage
awards paying out higher levels of
compensation, with consumers now
being afforded better protection
under the Consumer Protection Act
(operators may no longer contract
out of liability!). Couple this with
operators increased exposure to
international liability through the
ratification of passenger conventions
the most notable being the Montreal
Convention 1999 which governs
international air carriage under which
operators are now strictly liable for
proven damages of up to 113,100 SDR
(this equates to roughly USD171,363
in todays terms) and you do not have
a pretty picture.
Furthermore the victims or their
aggrieved family members can now
sue the foreign operator, where they
maintain their principal residence.
This can quickly become a very costly
exercise depending on where the
passengers are resident. With foreign
tourism on the rise and successive
passenger carriage ticketing ever
present, I would caution that when it
comes to purchasing liability, enough is
quite simply not enough.
COVER AUGUST 2014
2014/07/18 3:23 PM
 Liability: a specialist segment
STUART SINCLAIR,
Underwriter at Leppard Underwriting
The growth of consumerism
coupled with the changing
regulatory environment has
without a doubt increased the
awareness and requirement for
vendors to have adequate and
relevant liability insurance.
For example, as a result of the
Consumer Protection Act, there is an
increased demand for products liability
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COVER AUGUST 2014
Aug 14.indd 19
cover. With insurers now offering a
liability section of the multi-peril policy
on a non-accidental basis, the grey
area between the choice of multi-
peril (accidental basis) and broad form
liability wordings has widened.
Brokers now have to make the choice
between these two products. They
need to keep in mind the risk profile
and revenue of the insured. For
example, it would not make sense
to have a large mining risk or motor
vehicle parts manufacturer covered
under a multi-peril policy.
Brokers must take into account what
the insured manufactures or sells
and use that as a starting point for
determining the possible exposure.
When this has been done, the broker
is in a better position to recommend
which product best suits the insureds
needs.
We find that we are continuously
asked to provide quotes on business,
currently placed under a traditional
multi-peril policy that should be
covered under a broad form policy,
but the client refuses to pay more for
the broad form offering. This attitude
is nothing new; insureds have long
held the belief that liability is not an
exposure, it cannot happen to them!
This attitude creates an exposure for
the broker who needs to make sure
that the discussion with the client
is recorded and the shortcomings
are noted. During tough economic
times insurance spend is one of the
expenses looked at for potential
savings.
The South African liability market has
certainly become more competitive and
the industry more regulated; this is not
a bad thing as it forces us to innovate
and revisit the way we operate, for
example moving to a plain language
policy wording in the spirit of TCF. This
way it puts the insured, insurer and
broker on a level playing field when it
comes to being able to interpret the
specific clauses of a policy.
The liability market remains a specialist
market. As changes in the legal
environment and statutory regulation
means we have to be able to adapt
our product offering and underwriting
methodology in order to stay
competitive.
Training within the specialist lines
becomes even more important and
should be ongoing especially for our
underwriters and brokers. I would
like to think that any broker would
feel completely comfortable in asking
our advice or to challenge us on any
matter.
19
2014/07/18 3:10 PM
 Liability insurance
Take cover against
legal liabilities
Insurers and brokers should
protect themselves from arising
legal liabilities. An increased
awareness of consumer rights,
together with a legal fraternity
keen to capitalise on every
single opportunity, is a potential
recipe for disaster.
Liability insurance has long been a
thorn in the flesh of the insurance
industry abroad (in the USA, Canada
and Europe). Asbestosis is a well known
example. The problems associated with
this highly specialised area of insurance
are now likely to bite those in the South
African industry as well.
South Africa is one of the worlds
emerging economies, and with this
growth comes exposure to some risks
that were, previously, only experienced
in foreign markets. For example,
disposal of waste is problematic and
opportunists have begun seeking ways
20
Aug 14.indd 20
to put waste, such as fly ash from
power plants, to use.
However, the longer term effect of
using products made from such waste
is a grey area for which answers will
only be revealed in the future. As with
asbestosis, it may ultimately prove very
costly for those who are now taking
on these risks. It is, therefore, prudent
that insurers have a team of qualified
personnel able to respond to their
clients growing needs for such cover
in a way that will not place the insurer
directly above a ticking time bomb.
My experience at claim stage is that,
as far as liability goes, some brokers
are not currently as well versed with
the finer details of this type of cover
as they need to be in order to give
As we live in an imperfect world where
adequate advice to existing and
prospective clients. Given that there
is an increasing number of small to
medium business enterprises seeking
cover for such potential liabilities,
more and more brokers potentially
face this shortcoming. It is imperative
AUSTIN MPANDAWANA,
Legal Advisor: Renasa
Insurance Company
that brokers develop more in depth
knowledge as well as seek advice from
the relevant insurance specialists before
selling liability products.
It is also my view that competition,
which is helping to keep liability
premiums depressed, is not serving the
industry well. Appropriate rates must
be charged in order to accommodate
claims, and limits of indemnity may
well need to be increased because
the potential losses that could arise
from these risks could be greater
than currently anticipated. Knowing
what rates to apply for the unique
circumstances facing each and every
client boils down to the specific
expertise of those writing these risks.
the risk of liability is very real, I would
suggest that both insurers and brokers
now need to review what liability
cover may be required carefully and to
ensure that insured clients take cover
for legal liabilities at appropriate levels.
COVER AUGUST 2014
2014/07/18 3:10 PM
Untitled-1 1 2014/07/18 3:23 PM
 UMA Corner
GENRIC Insurance launches
niche aviation UMA
New underwriting management
agency (UMA) Planesure
Underwriting Managers brings
fresh blood to South Africas
aviation insurance offering,
expanding options for brokers
whose clients have aviation risk
management needs.
The UMA, backed by short-term insurer
GENRIC Insurance, is the brainchild of
Jamie Illing, Managing Director (MD)
of Planesure, who has more than
eight years experience in the aviation
insurance space.
Illing, who was previously MD at
Airspace Africa after setting up the
aviation division at Regent Insurance,
identified a need in the South African
market for a unique niche insurance
product that can offer a personal and
outstanding service experience in
general aviation insurance.
SCOPE FOR GROWTH
The South African general aviation
annual premium is around R500 million
of which only R300 million is written
locally, in South Africa, he said. The
rest is placed overseas into approved
and non-approved markets.
Furthermore, he noted, South Africa
has close to 11,000 aircraft that are
worth $60 million, excluding airlines.
However, not all of these are insured.
There is a very real need in our home
market for a unique, closely serviced
product, and Planesure can provide
that to brokers, Illing added.
Through Planesure, GENRIC Insurance
is one of six insurance companies
in South Africa that offer aviation
insurance. The UMAs suite of products
is for general aviation risks, for aircraft
with 30 seats or less.
POLICY OFFERING
The UMA offers a hull policy for
the aircraft, as well as hull war risk
insurance. Under the hull war risk
policy, the UMA offers insurance for
22
Aug 14.indd 22
damage to the aircraft in the event of
war, including riot, strike and malicious
damage. Planesure also offers liability
insurance for passenger and third party
property claims.
What distinguishes our products from
those already in the market, is that we
personalise the service experience,
Illing said. We understand the risk
intimately and have the experience
within our company to service it,
something that is hard to find in the
aviation insurance space. We tailor
our policies for each clients specific
need, and offer close, immediate
service that you would expect from a
specialist.
We have a lot of experience with the
aviation-specific brokers. However, we
also invite the wider broker community
to come and see what we can offer
your clients.
UNIQUE FEATURES
Planesure offers unique risk finance
tools with its policies that many policies
do not offer. These tools include:
Airport owners and operators
liability, including Airmeet
Liability. This is insurance for
third-party property damage, and
injury or death of people while
the aircraft is in the hangar.
Personal accident insurance
for crew and passengers in the
event of death or disability as
result of the plane crashing.
Emergency medical rescue stated
benefit whereby passengers
and crew would be airlifted
to the nearest hospital in the
event of the plane crashing.
Hull deductible insurance,
whereby Planesure can buy
down insurance excess for
aircraft at additional premium.
No-claims-bonus protection.
Planesure is underwritten by GENRIC
Insurance, which is a short-term
insurance company that specialises in
niche risks and is backed by A-rated
reinsurance.
We are pleased to welcome Jamie
and Planesure into the GENRIC fold,
said Cornel Schoeman, commercial
executive at GENRIC. Jamie is very
well known and respected within
the aviation insurance industry, and
Planesure sits beautifully next to our
other niche UMAs. To back up our
confidence in Planesure, we have taken
a shareholding in the UMA.
I am thrilled to have a strong
insurance partner like GENRIC in
a highly specialised field of risk
management. GENRIC understands the
specialist, Illing concluded.
Planesure is set for growing its market
share in the South African market,
but is also mandated to grow to
neighbouring countries.
We have full intention to widen
our network to some of the SADC
[Southern African Development
Community] countries, Illing
concluded.
COVER AUGUST 2014
2014/07/18 3:10 PM
Untitled-1 1 2014/07/18 3:24 PM
 Short-term
Are you operating within
the gambit of the law?
ERIC DOM,
Underwriting Manager Liabilities, Global
Casualty, AIG South Africa Limited
With the internationalisation
of markets, South African
manufacturers are introducing
products into more global
markets. Are manufacturers
compliant with the laws
applicable in these territories?
If not, they could fall foul of a
product liability claim.
A universal feature of product safety
legislation is that there is often no
prescriptive statement of what does,
or does not, constitute a safe product.
Most commonly, legislation is based
on the common law concept that a
product must be reasonably safe for
all foreseeable uses. This can include
foreseeable misuse by consumers.
Within this approach, manufacturers
are not expected to produce products
that are accident-proof.
Instead, the concept of strict
liability places a responsibility on
the manufacturer to prove a product
was safe in the event of a claim.
Strict liability is defined as a legal
responsibility for damage and loss
caused by the companys acts and
omissions regardless of culpability.
24
Aug 14.indd 24
The introduction of the Consumer
Protection Act, for example, places a
strict liability on the entire supply chain
of a product. The CPA places the onus
to disprove liability with the supply
chain.
MANUFACTURERS MUST
THEREFORE DEMONSTRATE:
The quality of risk assessments
undertaken. This is to avoid
incidents through better design,
while providing a record to prove a
product was designed to meet or
exceed a reasonably safe standard.
Risk assessments should include
a formal methodology which
shows design teams worked
systematically through key stages
of analysis and assessment.
Manufacturers must maintain
clear records that demonstrate
development of product design and
how management decided that the
product is safe for a market launch.
There are two predominant sets of
legislation which are broadly applicable
when addressing overseas markets:
European and American.
Within the European Community (EC),
product safety law is based on the
national legislation of each member
country. However, there are many
common features as the EC has
implemented new approach directives
on product safety. These have to be
implemented by all member countries
and provide a common framework of
legislation across the EC.
These directives cover many areas,
but key among them are those
on general product safety, and
machinery safety. EC Product Safety
Directives spell out essential health
and safety requirements. Provided
these requirements are met, the
product is sufficiently safe for market
introduction.
The essential health and safety
requirements are not prescriptively
defined but rather outlined in terms
of risk-based performance and so the
primary means of compliance is via
a product safety risk assessment or
design review.
The US has a two-tier system of
legislation. There are federal (country-
wide) laws which are primarily
designed to prevent unsafe products
from being imported or distributed.
These laws impose requirements
on the reporting of product safety
problems and recalls where necessary.
Each state also has its own set of
product safety law based on the
principle of tort. A tort is a wrongful
act or failure to exercise due care,
which results in injury or damage.
Tort law establishes standards by
which accidents can be evaluated and
decisions made.
State level tort law is primarily
concerned with dealing with product
claims following accidents.
Overall, American legislation both
state and federal follows the
same basic principles of European
legislation. Safety is defined in terms
of the reasonably safe standard, which
requires manufacturers to assess risk
and establish for themselves when a
product is safe to bring to market.
In the next article in this series, we
look at the organisations responsible
for product safety standards.
AIGs web-based Product Liability
Service is a training system which
helps manage product liability risks.
Courses cover a variety of topics
including management, safety
warnings, risk communication,
legislation and standards, to promote
good risk management. The service
is supported by tools including a
model corporate product safety policy
statement, a self assessment audit and
a risk assessment tool.
COVER AUGUST 2014
2014/07/18 3:10 PM
Untitled-1 1 2014/02/18 9:40 PM
Untitled-1 1 2014/07/18 3:24 PM
 Short-term

Gautengs dry winter poses

the highest risk for fires
SARA WINSTONE,
Spokesperson for Lightstone

Lightstone, provider of comprehensive data,

analytics and systems on automotive, property and
business assets, have revealed that out of the five
main provinces in South Africa, Gauteng has the
highest number of fire risk days during June, July
and August between the years of 2012 to 2014.

A fire risk day is determined by whether a fire hotspot has

been recorded that day. Gauteng has seen an average of
30,5 fire risk days in the month of August over the last two
years.

Average number of days where there was a re risk per month from 2012-2014
35

30

25
Likelihood of a Indicative frequency Description
fire occurring
20
Almost certain Once in two years A fire is expected to occur
15
Likely Once in five years A fire will probably occur
10
Possible Once in 10 years A fire might occur
5
Unlikely Once in 20 years A fire could occur
0
January February March April May June July August September October November December Rare Once in 100 years A fire may occur in
Free State Western Cape Kwazulu Natal Gauteng Eastern Cape exceptional circumstances

The winter months in Gauteng are dry and the fields are When analysing a sample of fire claims lodged over a 12
easily susceptible to fire. Areas where there is more open month period, a large majority of those occurred in Gauteng.
veld like Muldersdrift are flagged as a higher fire risk than in Although not as frequent as some of the other perils, the
the urban areas. average fire claim size was almost five times higher than
other building related claims due to its annihilating nature.
Average number of occurances per 10 000 square km from 2012 to 2014
100

90

80

70

60 THE WINTER MONTHS IN

50

40 GAUTENG ARE DRY AND

THE FIELDS ARE EASILY
30

20

10

0
SUSCEPTIBLE TO FIRE.
January February March April May June July August September October November December

Western Cape Limpopo Gauteng Eastern Cape Kwazulu Natal

The average number of fire occurrences per 10 000 square It is critical for insurance companies to understand the
km in Gauteng are relatively constant and low for summer partiality for the occurrence of various risks such as fires
to mid-autumn. It steadily rises throughout the end of during the drier months, in order to assess and mitigate
autumn and reaches a peak in August of 88 occurrences the risks properly. With accurate data and analysis provided
per 10 000 square km in Gauteng. From here the number by Lightstone, insurance companies can access individual
of occurrences decreases throughout spring and reaches a reports on properties detailing a variety of information on
minimum value of one occurrence per 10 000 square km in not only the fire risk, but also the typical weather and other
December. risk related conditions that affect the property.

26 COVER AUGUST 2014

Aug 14.indd 26 2014/07/18 3:10 PM

Untitled-1 1 2014/07/18 3:25 PM
 Short-term
Consumers are on the
edge of underinsurance
Each month Santam unpacks an interesting
insurance topic with research derived from
exclusive client surveys. This month the insurer
focuses on the cost of underinsurance and how it
affects consumers.
POLICYHOLDERS AT RISK FOR
OPTING NOT TO INSURE THEIR
VALUABLES
A significant number of policyholders
have admitted in our monthly survey
that they choose not to insure some of
their valuables, citing fear of premium
increases and the ease to replace those
items as key reasons.
South Africans have become
accustomed to paying exorbitant prices
on petrol, electricity and food products,
and there are no signs of 2014 easing
the load on consumers wallets.
Understandably, this trend has affected
consumers spending power and many
opt not to insure their valuables.
However, this is one of the biggest
mistakes consumers can make. In fact,
having to replace an expensive item
in the case of damage or loss could be
more costly than paying an insurance
premium.
These uninsured items tend to include
cell-phones, jewellery and laptops. We
live in an era where consumers carry
these possessions with them all the
time. These items are expensive to
purchase and are common targets for
criminals and opportunists.
The average price and value of
commonly used tech gadgets like
smartphones and tablets can easily
range between R6 000 and R12 000.
Many consumers own both a smart
phone and a laptop they are carrying
no less than R15 000 worth of goods.
While insurance premiums for these
goods are risk profile-dependent, the
28
Aug 14.indd 28
cost of replacing them may amount to
far more than the monthly insurance
premium.
Accidental loss/damage and theft
with force of personal belongings
have constituted the largest part of
insurance claims figures recorded by
Santam over a three-year period.
MOST POLICYHOLDERS ARE
UNDERINSURED FOR THEIR
HOUSEHOLD CONTENTS
An overwhelming number of survey
respondents (90%) stated that they are
content with their current household
contents policy. More than half of the
participants conceded that they only
wait for their policy renewal date to
update their cover, rather than doing so
as soon as they purchase a new item.
This insight suggests policyholders tend
to underinsure their home valuables
by failing to do a proper and regular
inventory of their home contents.
Sometimes, consumers fall into the
trap of underinsurance because they
are unaware of the repercussions and
it only comes to light at the claims
submitting stage. It is important for
individuals to check that their houses,
as well as its contents, are adequately
insured. This requires a regular review
of their household contents cover that
insures items such as major appliances,
furniture, jewellery and clothes.
Underinsurance occurs when the
insured value of the property and/
or item on the insurance policy is less
than its replacement value in the event
of loss, damage or theft. It is important
MARIUS NEETHLING,
Personal Lines Underwriting
Manager at Santam
for policyholders to know what exactly
they are covered for as well as the
extent of their insurance cover.
THE INTERMEDIARYS ASSISTANCE
REMAINS ESSENTIAL IN SAVING
ON INSURANCE PREMIUMS
The research showed that close to
60% of the survey respondents have
been advised by their intermediary on
ways to save on insurance premiums.
This is supplementary evidence that
the intermediary remains a pivotal
resource for policyholders. Clients often
forget that intermediaries are specialist
insurance advisors who represent them,
and not the insurance company. In
fact, the intermediary saves time and
money by regularly assessing pricing
trends in the insurance industry and
advising on the product that will best
suit potential risks.
Our intermediaries link our business to
our policyholders, thats why we always
make sure they have the right levels
of expertise and information to make
sure policyholders are happy and well-
serviced.
The Santam-intermediary partnership
is an example of business symbiosis,
where each party relies on the other
while working together towards
a common goal: protecting the
policyholder.
COVER AUGUST 2014
2014/07/18 3:10 PM
 Our Corporate and
Business Insurance sets
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it comes to:
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Standard Bank Insurance Brokers (Pty) Ltd is an authorised financial services provider (FSP224).
A member of the Standard Bank Group. Moving Forward is a trademark of The Standard Bank of South Africa Limited.
Products are underwritten by Standard Insurance Limited. SBSA 3513-9/13

3513-A4-B-insurance.indd 1 2013/10/15 10:00 AM

Untitled-1 1 2014/07/18 3:26 PM

 Working with
WHEELS
Self-driving cars could
reduce SA road deaths
WARWICK SCOTT-RODGER,
Head of Brokers at MUA
Insurance Acceptances
The Renault-Nissan alliance
recently announced cars that
drive themselves could be on
European roads only four years
from now. The accuracy of the
system of driverless vehicles
could help reduce the number of
fatalities that occur on the roads
daily.
Motor vehicle accidents remain a
serious problem in South Africa and
are most often the result of human
30
Aug 14.indd 30
error. A driverless system could help
to eradicate careless and negligent
driving behaviour, thereby reducing the
number of accidents.
Googles driverless cars have now
clocked more than 700 000 miles
without a single accident under
a computers control, raising the
possibility of a future of driverless
vehicles.
HOW WILL THIS AFFECT THE
INSURANCE INDUSTRY?
If the risks posed by driverless vehicles
do prove to be less than those posed
by traditional vehicles; the insurance
premium charged should also reduce.
This could make the industry more
competitive, forcing insurance
companies to include additional value
added services to make their respective
offerings more attractive.
While the traditional risks posed by
driver vehicles may be substantially
mitigated, the reality is that it will
take a long time for driverless cars to
be introduced and driving on South
Africas roads with absolute autonomy.
Compatibility of all vehicles to enable
constant cross communication with
each other is vital; otherwise the
benefits offered by such a system
would soon be obsolete.
A major concern for any insurance
company, which opts to provide a
reduced premium in response to the
driverless system being implemented,
is that a sluggish uptake of this
technology would mean that the risks
posed by other drivers on the roads
would remain as rife as before.
Insurance contracts would certainly
have to be revisited. With an insurance
policy being a contract between
the insurer and the insured, certain
terms and conditions may need to be
tweaked to ensure that comprehensive
cover is not compromised.
Exclusions like driving under the
influence of alcohol may no longer
need to be applied. One of the most
contentious legal issues may be that of
third party claims.
THE RESPONSIBLE PARTY
Can someone still be sued in his or her
personal capacity? Would the owner
or driver of the vehicle now assume
the negligent position of the vehicle?
The qualifying criteria for negligence
to exist may now have to question:
would the reasonable person (vehicle)
have foreseen the consequence of his/
her (its) actions, would the reasonable
vehicle have taken the necessary steps
to safeguard against this consequence,
and lastly did this vehicle take the
necessary steps to safeguard against
such a consequence?
The introduction of this new mode
of transport would require transport
laws to be revised. This will include
legislation regarding speaking on the
cell phone while driving, licensing of
vehicles and drivers, and the possible
impact on claims submitted against the
Road Accident Fund.
The principle behind driverless
technology is positive and so far the
technology appears to be proving a
success. However, while the phasing
in of this type of technology will take
a long time, especially in emerging
markets where older cars remain
on the roads for far longer, it is
important that the local industry starts
to consider the implications so it is
prepared when the time arrives.
COVER AUGUST 2014
2014/07/18 3:10 PM
 EMPLOYEE MOTOR FLEET
AND RISK RISK FINANCE INSURANCE CAR HIRE
BENEFITS SOLUTIONS Paladin INSURANCE
Blue Diamond
Centriq BrokerserV
Manwood

NON-STANDARD OWNER DRIVER

LIFE INSURANCE INSURANCE
AllLife
HCV Hambe Kahle
INSURANCE
IUM

MARINE AVIATION
INSURANCE
INSURANCE Azriel Aero
Nautical Aviation

EVENTS AND
ENTERTAINMENT
KEU Xelus, Total Risk
Administrators

EXCESS BUYDOWN
INSURANCE MOTOR
STAND ALONE IUM, Paladin,
Beyonda Group SAU Paradigm,
Ad Ultimum

WHY LOOK ANYWHERE ELSE?

Were all different. We think, work and live differently. At Centriq, we see insurance in the same way differently. Its this way of looking
at you and your clients that makes us a partner you can trust and turn to, whatever your clients insurance needs, from assets to
liabilities to people. Over the years, weve built relationships with leading UMA business partners in our industry that position us to offer
each insurance broker and their clients unique solutions provided by dedicated and competent people thats the Centriq difference.

Untitled-1 1 2014/07/18 3:27 PM

 Working with
WHEELS
Managing fleets through
Wi-Fi in Maputo
The port of Maputo in
Mozambique is ideally situated
for the import and export of
vehicles that are being delivered
to or manufactured in Gauteng.
It also complements the South
African car terminals that are
operating under severe capacity
constraints.
In order to assist with alleviating these
capacity issues, the Grindrod Maputo
Car Terminal has been expanding to
cover a significant area. But while the
company takes in a huge amount of
containers on a daily basis, it has not
had a reliable solution to record vehicle
locations and track them in the parking
lot in real-time.
Our previous system was based on
cellular technology but became too
expensive. Given the environment, it
Awarding fleet,
trucking and logistics
HEIN JORDT,
Ctrack Managing Director:
Fleet Management Division
Ctrack, a global fleet and vehicle
tracking company, is proud to
announce their sponsorship
of the first inaugural TruckX
Conference & Fleet Awards, set
to take place on 19 August 2014.
A first for South Africa, the conference
and awards will recognise the needs
and demands of the fleet, trucking and
logistics industry.
32
Aug 14.indd 32
also became increasingly unreliable.
While it worked in the immediate
proximity of our office, it had no range
which rendered the system completely
ineffective, said Saad Kazi, National
IT Manager at Grindrod Terminals.
Grindrod Maputo approached Ruckus
Wireless partner Internet Solutions
(IS) to provide them with a solution to
extend their coverage area and convert
their fixed network into a wireless one
that could be easily expanded as the
need arises.
D Wet Hugo, managing executive for
operations at IS Mozambique, said
Ruckus Smart Wi-Fi technologies
have been designed to extend the
range and reliability of wireless signals
and eliminate much of the cost and
complexity of conventional wireless
deployments.
environments where obstacles,
According to Michael Fletcher, Sales
Director for sub-Saharan Africa at
Hosted by Future Group, with a
reputable 17 years experience in the
publishing industry, the awards will
address key topical discussions within
the automotive sector and recognise
OEM and aftermarket providers for
their commitment to the fleet industry.
The aim of the sponsorship will be
to enhance the perceptions of those
who operate within the automotive
sector, investors, partners and most
importantly customers.
Categories that make up the awards
are:
Logistics (as voted by readers of
Future Trucking & Logistics);
Ruckus Wireless, Wi-Fi connectivity
is playing a growing role in increasing
efficiencies and productivity in
harbours and ports in Africa.
A client like Grindrod Maputo requires
real-time access to gate, ticket
and terminal/cargo information.
What makes these environments a
challenge from a wireless performance
perspective is that changes in user
or cargo density over the course of
the day can dramatically impact radio
frequency characteristics and demand
load on the network.
Integrated into every Ruckus Smart
Wi-Fi ZoneFlex access point (AP) is
a sophisticated high-gain directional
antenna system, which constantly
focuses and directs Wi-Fi signals over
the best performing paths. This is
essential in hostile radio frequency
interference, and noise wreak havoc
with wireless systems.
Cars (as voted for by readers
of Fleet and Autofleet);
Associated Awards Car
and Trucks, Editors Awards
(For Trucks & Cars); and
Trucks and Heavy Commercial
(as voted for by readers of
Future Trucking & Logistics).
For more information visit
www.futuretrucking.co.za and
www.ctrack.com
COVER AUGUST 2014
2014/07/18 3:10 PM
Untitled-1 1 2014/07/18 3:27 PM
 Risk Management
Cyber versus Tech PI
Round 2
NATALIE VAN DE COOLWIJK,
MD of CyGeist, a cyber-focused UMA
underwriting on behalf of Guardrisk
Last month COVER featured an
article exploring the high-level
differences between professional
indemnity and cyber insurance
policies. A natural extension of
this topic would be the question
Where is the overlap between
technology PI and cyber
insurance policies, and how do
they differ?
For both policies to be triggered by the
same event, three separate elements
need to be present:
1. The policyholder should be a
technology services provider.
2. Negligence should be present
in the provision of the professional
technological service, resulting
in damages sustained by the
policyholders client and triggering the
technology PI policy.
3. Such negligence will have resulted in
either a compromise of the technology
service providers systems and/or a
34
Aug 14.indd 34
compromise of their client information,
in order for the cyber insurance policy
to be triggered.
The risks of unauthorised access to and
misuse of information are becoming
more prevalent and detrimental to
organisations nowadays than a mere
virus infection which is malicious and
disruptive but not nearly as lucrative
for cyber criminals as the former.
The policyholder in our example is
a data storage provider, who has
a technology PI policy and a cyber
insurance policy. They configure their
systems according to minimum security
standards, and take appropriate
action like applying software updates
and patches on time. This should
ensure that their client information is
reasonably secure, and this forms part
of the professional service that they
offer.
ITS VALUABLE TO HAVE BOTH
POLICIES OR TO HAVE A POLICY
WHICH COMBINES BOTH COVERS.
Assume they neglected to change
the vendor passwords away from the
default (not adhering to minimum
security standards), and a cyber
criminal was able to obtain access
to their servers hosting information
belonging to multiple clients, which he
sells.
Assuming the breach is discovered and
a disgruntled employee discloses all
the details to the media, the situation
should play out as follows:
The policyholder notifies the
cyber insurance provider of the
incident, who deploys the relevant
specialists to deal with the breach.
IT and forensic specialists investigate
and contain the breach, and
legal specialists advise that the
policyholder should notify clients. The
policyholder makes use of PR services
to mitigate further reputational harm.
These first party crisis management
covers would not be available
under the technology PI policy.
Once the clients are notified, they
elect to notify their customers
in an attempt to manage the
situation proactively. They offer
their customers further remediation
services, including the reissue of
credit cards and credit monitoring
for a period of six months.
The clients seek compensation
from the data storage provider
for the costs they have incurred
in managing the situation. The
data storage provider notifies their
technology PI insurer and after
some discussions the parties agree
to an out of court settlement. If
the data storage provider didnt
have a technology PI policy, the
cyber insurance policy would have
responded in the same way.
Scenarios where both policies will
be triggered are fairly remote. Its
more likely for an incident to occur
where either negligence is present in
the provision of the service, but this
does not result in a network security
or privacy breach, or alternatively
the systems and/or information are
compromised without the presence of
negligence.
Its valuable to have both policies
or to have a policy which combines
both covers. Not only do these covers
encourage the policyholder to manage
the breach proactively and assist in
reducing any resultant liability, they
also provide access to appropriate
breach response service providers and
pick up the concomitant costs, which
are far from negligible.
Not having the cyber first party
coverages can be likened to the
situation where a landlord has a policy
to cover damage to tenants contents
as the result of a leaking roof, but does
not have a policy in place to deal with
the leaking roof itself.
COVER AUGUST 2014
2014/07/18 3:10 PM
 $
115.1M
Average property casualty claims
paid each business day in 2012

63,000 AIG employees

worldwide
130Countries where
AIG has clients

Whats behind AIGs numbers?

$
1.5B
90 +
Global Property
per risk capacity

one
World Trade Center
rebuilding
Years helping
people insure brighter
tomorrows

as lead insurer

People.
Insurance isnt about numbers. Its about people. In our case, 63,000 people
coming together to take on the impossible challenges. Because we believe that
with the right people and the right attitude you can turn even the toughest today
into the brightest of tomorrows. Learn more at www.aig.com

Insurance and services provided by member companies of American International Group, Inc. Coverage
may not be available in all jurisdictions and is subject to actual policy language. For additional information,
please visit our website at www.aig.com. AIG South Africa Limited is a Licensed Financial Services Provider
FSP No. 15805 Reg. No. 1962/003192/06

AIG13166-ZA-BrandNumbers-297x210-Ad-0614.indd
Untitled-1 1 1 30/06/2014
2014/07/18 16:18
3:28 PM
 Risk Management

Cybergeddon
managing the risks
In May this year Zurich Insurance
published the Zurich Cyber Risk
Report in collaboration with the
international think tank Atlantic
Council. Cybergeddon refers to
the interconnectedness of global
risks, systemic risks that led to,
among others, the 2008 financial
crisis.
Organisations must improve their
responses to cyber risks to avoid a
global shock similar to the 2008 crisis.
HOW DOES CYBER CRIME AFFECT
THE INSURANCE INDUSTRY, BOTH
LOCALLY AND GLOBALLY?
Any insurance company must
make sure it doesnt fall victim to
cyber crime by putting cyber crime
risk management measures and
infrastructure in place. You get specific
products for cyber crime.

CYBER CRIME IS A GLOBAL RISK

WITH GLOBAL RAMIFICATIONS.

Cyber crime has a huge impact on

Christoph Leuzinger, Executive Head
of Global Corporate at Zurich South
Africa, said: This research further
solidifies the findings of the Global
Risks 2014 Report, released earlier this
year by Zurich and the World Economic
Forum (WEF), which lists cyber attacks
as the fifth most likely risk to face the
globe in the next ten years. With the
internet becoming increasingly coupled
with the real world, the nature of
cyber risk is undergoing a fundamental
change only with a holistic view on
risk are we able to build resilience to
the changed cyber risk environment.
Leuzinger had contributed to COVERs
May feature on cyber crime. Fascinated
by the topic and how it affects our
industry, COVER had a few more
questions for Christoph about the
Zurich Cyber Risk Report.
The report found that the reliance on
information technology has created a
complex web of interconnected risks.
insurance companies profitability.
South Africa ranks high on the list of
countries affected by cyber crime.
According to the FBI, South Africa
is the sixth most active cyber crime
country in the world.
WHAT ARE THE SEVEN
AGGREGATORS OF CYBER RISK
THAT YOU IDENTIFIED IN THE
REPORT?
They range from internal IT landscape
to IT infrastructure to outsourcing and
external shocks. These are systemic
risks that are interconnected.
The seven risks relate to: Internal IT
enterprise, counterparties and partners,
outsourced and contract, supply chain,
disruptive technologies, upstream
infrastructure and external shocks.
WHAT CAN WE DO TO ENSURE
EFFECTIVE CYBER RISK
MANAGEMENT?
Risk is an important topic and there
is an increased need for coverage in
order to produce relevant solutions
to help mitigate the impact of cyber
crime. These solutions need to give
proactive cover to consumers.
We need to address the topic, increase
awareness, and provide products to
cover these risks effectively.
Much more needs to be done to
manage the risk, and everyone
government, public and private need
to collaborate.
Cyber crime is a global risk with global
ramifications.
THE WAY FORWARD
The Zurich Risk Nexus report calls
for organisations to incorporate the
best ideas from financial governance
such as creating a G20+20 Cyber
Stability Board to enhance cyber
risk management and identify and
improve the governance of G-SIIOs
(Global Significantly Important Internet
Organisations).
The report warns that a build-up in
these risks could create a failure on
a similar scale to the 2008 financial
crisis. Such interconnected risks
are compounded when a company
outsources the management of its
servers, information technology and
cyber security to focus on its core
activities. Little information may
be known about the third partys
information security or business
continuity safeguards and it may also,
in turn, outsource activities to other
companies.

36 COVER AUGUST 2014

Aug 14.indd 36 2014/07/18 3:10 PM

 25
Years

Untitled-1 1 2014/07/18 3:28 PM

 FPI Professionals Convention
Growth through
Innovation
The Financial Planning Institute
of Southern Africa (FPI) hosted
their annual FPI Professionals
Convention from 25 to 26 June
at the Sandton Convention
Centre this year. The theme of
the Convention was Growth
through Innovation, and the
programme was jam packed with
interesting professionals speaking
to this topic.
The FPI is a professional body
recognised by the South African
Qualifications Authority (SAQA). The
forum has been running for over
a decade, and this years platinum
sponsor was Discovery Holdings. Over
the years, the event has also been
38
Aug 14.indd 38
FPI
Professionals
Convention
Other expert speakers included
wealth creation expert and human
transformation coach, Max Moyo, Editor
of Stuff Magazine and technology
commentator, Toby Shapshak,
Helene Nicholson, and selected CFP
professionals.
established as a credible platform for
some of the best minds in the Financial
Services industry, to discuss the
financial planning profession and ways
in which to improve it.
The 2014 Professionals Convention was
opened by Michael Jordaan, former
FNB CEO, and award-winning financial
journalist, Bruce Whitfield, directed the
programme over the two days. Keynote
sessions from industry experts covered
Godfrey Nti, CEO of the Financial
financial planning topics and included
Planning Institute, said: One
practical workshops with a wide range
of informative panel discussions.
of our key focus areas will be on
actively re-positioning the CERTIFIED
The programme included a number of FINANCIAL PLANNER designation to
interesting presentations by Hal Ratner, the professionals through the launch
Global Head of Research at Morningstar of the It starts with me programme.
IM (Chicago) and Sarah Harper, Oxford Although weve made some stride in
Professor of Gerontology and director this area, we will continue to promote
of the Oxford Institute of Population the financial planning profession as a
Ageing. career of choice among students.
COVER AUGUST 2014
2014/07/18 3:10 PM

Prem Govender
hands the
reins to Sankie
Morata
The FPI Board of Directors
announced the appointment
of the new FPI Chairperson-
Elect, Sankie Morata, CFP.
Morata graduated from the
University of the Free State
(UFS) and has dealt primarily
with Corporate Commercial
Law pertaining to the financial
services industry.
He had previously served as a Legal
Advisor of Sanlam Distribution
Academy and as a Senior Fiduciary
Specialist and is currently Regional
Head for Central Region at BoE Trust.
Godfrey Nti said, We are very
excited about Sankie being
COVER AUGUST 2014
Aug 14.indd 39
RYNO
Killing himself with
30 a day.
appointed as the FPI Chairperson-
Elect and are confident that his
strong leadership qualities and
many years of experience will be of
tremendous benefit to the institute. I
look forward to working with him in
his new capacity.
Furthermore the FPI board
announced that they will be
extending Godfrey Ntis term
in office as the FPI CEO for an
additional five years.
Upon embarking on their new
journeys, former Chairperson
Prem Govender said farewell, and
welcomed Sankie Morata to his new
post as Chairperson-Elect. Morata
accepted his welcome, and had a
few words in return.
39
2014/07/18 3:10 PM
 FPI Professionals Convention
Prem Govenders
last word
This is an edited extract of Prem
Govenders speech on Monday
evening, 23 June at the annual
VIP Stakeholder Function.
2014 marks the 10th anniversary of FPI
as a Section 21 company, not for profit,
and I have had the privilege of serving
on this board since its inception.
I have a memory bank with
interesting deposits and I would like to
acknowledge some of the people that
were a part of these deposits.
From previous boards we have fellow
past directors Esther Venter, Andrew
Bradley Louis van Vuuren and Solly
Keetse. You have served the FPI with
distinction.
I had the pleasure of working with
past CEO John Arnesen who made
my work much easier during my first
term as Chair. I want to recognise the
tremendous contribution made by Carl
Anschutz and Anthony Campher.
Over the years FPI has built and
maintained relationships with policy
makers, regulators and SAQA.
I want to acknowledge Joe Samuels,
CEO of SAQA and I want to express
the pride we take in being recognised
as the professional body for financial
planning.
Tonight we are honoured to have the
newly appointed Deputy Executive
Officer for FAIS and market conduct
at the Financial Services Board (FSB)
Caroline Da Silva. I was privileged
to work with Caroline on the FAIS
Advisory Committee and cant think
of a better person to take the reins as
regulator.
Caroline, I know that the relationship
that FPI shares with you and your
office will grow and I want to thank
you for the support you give us,
both as a professional and as an
examination body.
40
Aug 14.indd 40
Another powerful woman is the
Pension Fund Adjudicator, Muvhango
Lukhaimane. Muvhango, we value your
wise counsel and the time you make to
meet with us.
Another gentleman I would like to
acknowledge is the Deputy Director
General.
At National Treasury, Ismail Momoniat,
popularly known as Momo, continues
to play a guiding role to FPI. We look
forward to continuing the relationship
we have with you.
FPI has worked closely with other
industry and regulatory bodies and
here I want to acknowledge Gavin
Came and Justus van Pletzen from the
FIA.
I also acknowledge Elizabeth Nanziri
from the South African Savings
Institute and Tamryn Peyper from the
Consumer Education Department at
the FSB. We place emphasis on how
we can contribute towards financial
literacy and a culture of savings in
our country and we are pleased with
the Memorandum of Understanding
that we have with both the FSBs
Financial Services Consumer Education
Foundation and the South African
Savings Institute.
I want to acknowledge Andr Cilliers
from Sanlam who has always been and
continues to be an ardent supporter of
FPI.
To Godfrey, it has been an absolute
pleasure to work with you and to see
you grow into a role you were reluctant
to take. Thank you to you and your
staff for quietly going about your work
with immense success.
To the current board of directors I
could never have done it without your
dedication and passion. You have made
my leadership easier and I will forever
be grateful to you.
It is my pleasure to introduce Sankie
Morata, current Chair Elect who will
move into the position of Chair for the
next two years. Sankie, it has been
a pleasure working with you, not just
over the past two years but since you
were appointed to the board. I have
watched you grow and I have no doubt
that FPI will continue to make great
strides during your leadership.
I present to you our new Chair Elect
Ntai Phoofolo who will succeed Sankie.
Gentlemen, I have no doubt that you
will lead the professional body with
distinction and passion. I wish you both
and your new board every success.
And so as I ride off into the sunset, I
do so with immense satisfaction that
I have served FPI as best as I could. I
take with me the memories of all the
most amazing people I met and worked
with.
My work is now done.
COVER AUGUST 2014
2014/07/18 3:10 PM
 Sankie Morata
leads the new way
I am humbled and honoured
to stand here with you this
evening to thank and honour
the mentor, coach, leader and
advocate of financial planning
and life planning, Prem
Govender.
I would like to thank you for the
immense work and contributions you
have done for the Financial Planning
profession.
It is through you that we saw a robust
transformation in the financial planning
industry. We attained true recognition
of financial planning as a distinguished
and respected profession during your
term.
During your term you have influenced
the following:
To redefine the Financial
Planning Institute of South
Africa (FPI) and streamlining
the board for effectiveness.
To set the CFP mark as the
beacon in this ever changing
world of financial services.
We have seen and observed your
influence and coaching the lives of
the rich and poor through financial
planning. I would like to thank you for
the warm heart and leadership that
you have given FPI.
Simon Sinek said: There is a
difference between giving directions
and giving direction.
Direction is the far away destination to
which you are heading, and directions
are the route you will take to get
there.
As leaders and managers we often
forget the distinction. When we want
to tell someone to do something, we
give them directions when we should
be giving them the direction.
Great leaders do not get involved in
the details of what route is taken; they
focus on ensuring everyone is clear of
COVER AUGUST 2014
Aug 14.indd 41
RYNO
Pays a packet for
risk insurance as a smoker.
the destination. Thank you Prem, for
being the great leader you are.
FPI has attained a lot. We are proud to
be a professional community that has:
a world leading code of
professional practice;
the highest standards of
education and examination;
world class CERTIFICATION the
much coveted CFP designation; and
a profession that embraces all that is
right about financial planning and has
the willingness and capacity to hold
its own to account when needed.
FPI is indeed the leading independent
professional body for financial planners
in South Africa.
As a non-profit, SAQA-recognised
professional body and founding
member of the international Financial
Planning Standards Board, we exist to
improve the level of professionalism
and positively influence the quality of
advice delivered by our members.
Through our global partnership with
Financial Planning Standards Board
(FPSB), along with other 24 countries,
we are the only institution in Africa
licensed to award the much sought
after CFP certification.
The CFP mark asserts that a financial
planning professional has met
stringent internationally-benchmarked
qualification and competency
requirements and adheres to an
uncompromising code of ethics and
professional standards.
This assures their clients of
comprehensive and robust personal
financial planning services and greater
certainty around their financial future.
For employers it gives a sense of
assurance that employees are the
most competent and ethical in the
industry. For regulators, it gives a
sense of comfort in knowing that
more and more financial advisors
and firms are gravitating towards the
CFP designation, making your public
protection mandate easier.
41
2014/07/18 3:10 PM
 FPI Professionals Convention

The FPI continues to work consistently
and relentlessly with policymakers,
regulators, business leaders and the
media to promote the financial planning
profession.
We continue to strive towards improving
clients lives. As CFP professionals, we
measure success through the difference
we make in the lives of our clients
and not in terms of product sales or
distribution.
To build the financial planning profession
we need the active participation of CFP
professionals/firms; consumers/public,
professional body and government/
regulator. We value the relationship we
share with every one of you present
here today and look forward to building
even stronger relationships in the years
to come. With our noble vision of
professional financial planning for all
it will require nothing less if we are to
someday attain this goal.
Thank you very much for the partnership
in ensuring a better financial planning for
all and building a better SA that is able
to create, maintain and protect wealth.

Congratulating the three best

financial planners in SA
The FPI is proud to announce
that Peter Hewett, CERTIFIED
FINANCIAL PLANNER
professional and founder of
Efficient Advise practice, is the
2014 Financial Planner of the
Year winner.

The Financial Planner of the Year

Award is the highest accolade a
professional financial planner can
obtain. Sponsored by Personal
Finance magazine, the competition
consists of three rounds during which
entrants must qualify to go through
to the next round by submitting
a comprehensive financial plan,
completing various interviews and
evaluations. Independent judges range
from academics, industry experts and
FPI board members who participate in
each round.

Godfrey Nti, FPI CEO commented,

This award provides us with an
incredible platform to celebrate our
professionals excellence in financial
planning services, while in adherence
to globally set standards. I would like
to take this opportunity to applaud
everyone who entered the competition
this year.

On behalf of the Institute, I would

also like to congratulate Peter Hewett
on receiving this years award. His
ample financial planning experience
has positioned him as a phenomenal
pillar to the financial services industry
and an excellent role model for the
upcoming generation of financial
planners, who will go on to build their
own successful independent practices
in the future.

42 COVER AUGUST 2014

Aug 14.indd 42 2014/07/18 3:10 PM


Furthermore, we would like to extend
a warm appreciation to the judges
for ensuring that the award judging
process progressed smoothly, added
Nti.
Hewett started his career 23 years ago
in the Fiduciary and Trust Services and
later the Private Clients Management
arena. Over the last five years, he
has built an advisory practice with
an infrastructure consisting of an
operations team and 63 advisors who
service over 8000 clients nationally.
Hewett said, I am honoured to be
named the recipient of this award;
it came with a lot of hard work
that proved to be worth it in the
end. I look forward to working with
FPI in advocating the values of
the organisation on behalf of my
profession and ensuring that we drive
consumer financial literacy across
South Africa.
FPI would also like to acknowledge
the two finalists of the 2014 Financial
Planner of the Year Award:
Runner-up Donovan Adams,
CERTIFIED FINANCIAL PLANNER
professional and retirement
FPI Awards in a nutshell
In recognising and awarding
excellence, Peter Hewett, CFP,
founder of Efficient Advise practice,
was awarded the 2014 FPI Financial
Planner of the Year title, and was
joined in the awards ceremony by
finalists Donovan Adams, CFP, a
retirement specialist at Chartered
Wealth Solutions and Bruce Fleming,
CFP, Executive Head Private Clients
at Consolidated.
COVER AUGUST 2014
Aug 14.indd 43
SAVE THE
RYNO
Ryno needs to quit
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Originally from Port Elizabeth,
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professional, obtained his B.Com
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Over and above these achievements,
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Were your type
of risk insurer.
Alan McCulloch, CFP, was awarded
the Harry Brews Award (previously
Chairmans Award). Principal Wealth
Manager of African interests, Gerald
Mwandiambira, CFP, was awarded the
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Magazine, and Jacques Hodsdon
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in the CFP Professional Competency
Examination Award, sponsored by
Cannon Asset Management.
43
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financial services provider (FSP 17697).
2014/07/18 3:10 PM
 FPI Professionals Convention

Stuff the strong. Only the

innovative will survive
Dr Michael Jordaan opened the
FPI Professionals Convention
on 25 June. Jordaan has been
hailed as one of South Africas
most visionary and progressive
business leaders and most
innovative banker. Jordaan
became the Chief Executive
Officer of First National Bank
in 2004, after which the bank
experienced a total brand
transformation culminating in it
being named the worlds most
innovative bank in 2012.

Jordaan is currently based Stellenbosch,

where he is the chairman of Mxit and
Wines of South Africa. He has also
set up a private investment company
Montegray Capital.
He started his keynote speech with the
following words: Stuff the strong. Only
the innovative will survive.
Jordaan took the audience on a
journey through history to illustrate the
moments in time when the innovative
survived. His journey took him through
the route of the early cartographers,
expeditions to the North and South
Poles, through Greek philosophy, the
Industrial Revolution (which was caused
by tea, some would have it) and finally
led him to modern day inventions,
where the pace of tech change is
growing exponentially.
Jordaan said the innovators dilemma
is that we do not have a culture of
innovating to solve something. The
biggest challenge to this dilemma is
looking beyond conventional responses.
Jordaan then gave the audience his
observation from within a corporate
environment:
No one is smarter than anyone.
Jordaan said the wisdom of
everybody will always trump
the wisdom of the individual.
Innovation can only happen
within an empowering culture.
The companys culture must be
open to innovation, and along with
innovation, make room for mistakes.
the wisdom of everybody
will always trump the
wisdom of the individual.
Take risks; make mistakes.
How do you learn if not through
trial and error, through making
mistakes? People must be allowed
to make calculated risks.
Recognise and reward the
innovators. As you allow for
mistakes, also remember to
reward the innovators.
Dont take yourself too seriously.
Jordaan said in his experience,
anything can be sorted out
over a glass of wine.
SO WHAT IS INNOVATION ALL
ABOUT? JORDAAN MADE THE
FOLLOWING POINTS:
Innovation is about never
losing touch;
Innovation may go against
the established order;
Innovation is about adding value;
Innovation is about
imaginative partnerships;
Innovation is about creating
easy connections;
Innovation is about
providing the means;
Innovation is about
making life simpler;
Innovation is about solving problems;
Innovation meets needs
with creativity;
Innovation is about
breaking the rules;
Innovation is about copying what
works and improving upon it; and
Innovation is about creating
simple pleasures.
In conclusion, Jordaan said: Dont take
yourself too seriously. Take considered
risks. Surround yourself with good
people.

44 COVER AUGUST 2014

Aug 14.indd 44 2014/07/18 3:10 PM

Untitled-1 1 2014/07/18 3:28 PM
 FPI Professionals Convention
Africas real innovation
Continuing the topic of
innovation the following day,
editor of Stuff Magazine,
Toby Shapshak spoke about
technology in financial planning.
Economists called us the Dark
Continent, he started, but innovation
is born from that darkness.
Everywhere theres electricity theres
no innovation. Why? Because were
playing Angry Birds and watching
television.
Mobile is the future in Africa, said
Shapshak. However, FM radio remains
the best way to reach people in Africa.
He said there are 750 million sim cards
in Africa. The value of SMSes is that
everyone reads them and they go to
every device. The Nokia 1100 remains
the best selling mobile device in the
world.
Africa is the new frontier for innovation
and investors, with its 125 million
middle class people and steady growth
in GDP.
We have incredible lateral thinking
and clever ways of doing things in
Africa, he said.
Shapshak highlighted the innovation
that has come out of Africa as solutions
to problems.
46
Aug 14.indd 46
According to the mPedigree Networks
website, www.mpedigree.net, the trade
in counterfeit medicine is worth about
$700 billion per year. The website
states that nearly 2000 people die
from false or substandard medicine,
dumped in third world countries by big
pharmaceutical companies.
In response to this problem, the
mPedigree Network was found in
Ghana. People can use their phones to
SMS the barcodes on these medicines
to find out if they have expired.
Shapshak told another great story from
Ghana, about the countrys rampant
rice trade, and how it has erupted into
a massive business with some 2000
small scale farmers spread across the
country. These farmers keep in touch
with each other via SMS on all points
of farming, from sowing to harvesting
and post-harvest activities.
Shapshak said technology that has
been developed in Kruger Park is used
to pay soldiers in Afghanistan. African
technology is being used around the
world.
M-Pesa was recently launched in
Romania; Mxit still reaches 750 million
people in sub-Saharan Africa. I think
the new Steve Jobs is coming out of
Africa, said Shapshak. Is it Elon Musk?
The mobile innovation epicentre of
the world is Lagos, he said. Radio is
still the killer app in Africa. Africa is a
mobile only continent.
WHY SHOULD WE CARE?
Africa has skipped the desktop age,
said Shapshak. There are 750 million
sim cards in Africa, growing at 25% per
annum.
People in Africa are using this simple
programme the SMS to solve day-
to-day problems that the developed
world takes for granted.
COVER AUGUST 2014
2014/07/18 3:10 PM
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Untitled-1 1 2014/07/18 3:29 PM

 FPI Professionals Convention
Winning the heart
of your clients
Kim Potgieter, CFP Professional
and Director at Chartered
Wealth Solutions, presented
at the recent FPI Professionals
Convention on The Connection
Toolbox. She encouraged her
fellow planners in their efforts
to build lasting and meaningful
relationships with their clients.
If you want to win someone over, first
win his heart the rest of him is likely
to follow.
Connecting is the ability to identify
with people and relate to them in a
way that increases your influence with
them.
THE FUTURE OF THE PLANNING
INDUSTRY
Two years ago Wessel Oosthuizen,
then head of OFS, shared his picture of
the future of financial planning at this
same convention. I was excited by his
vision, because it resonated with me:
trust, appropriate judgment, autonomy,
48
Aug 14.indd 48
focus on our clients interests as a
priority.
Life planning has taught us to connect
better with our clients at Chartered
Wealth Solutions. Connecting can be
learnt. We were very disappointed
when these clients did not become our
clients after our first initial meetings.
We realised that our financial plans
were too generic. Our clients were all
unique, yet their plans looked rather
similar.
The connection toolbox contains
practical ways in which we changed
and the results have been rewarding.
We as financial planners want to
facilitate change in our clients lives
through their money.
initiative, responsibility, listening,
thinking, behaviour, the interest of the Clients no longer see our value as
client. telling them what to do, but rather
as embarking on a journey where
Two years later not much has been we help them get not only return on
said about these areas. Our legislation, investment, but return on life.
investment knowledge, compliance
have all been the focus; of course, The contents of the Connection
those are important, but there is no Toolbox form the anagram HEART to
doubt that we need to continue to help us recall them.
COVER AUGUST 2014
2014/07/18 3:12 PM
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Untitled-1 1 2014/07/18 3:29 PM

 FPI Professionals Convention
The Connection Toolbox
1. HELLO
Connection starts the minute a client walks through
the door of your office first impressions count.
At Chartered, we have chosen to see clients in our
offices. It limits the distraction (no children running
around, phones ringing) you can focus on your client.
Do you dress to the same formal degree as your
clients? It may seem a small thing but shows respect,
as does a good coffee, a flower on the tray, a kind
phone call to enquire how they are. Be aware of your
body language more than 90% of the impression we
convey has nothing to do with what we say.
People hear your words, but feel your attitude. Being
curious about your client cannot be faked. By showing
enthusiasm for what you are doing the client will feel
excited about the process as well.
2. EMPATHY
Nelson Mandel said: If you talk to a man in the
language he understands that goes to his head. If you
talk to him in his language that goes to his heart.
Empathy is our emotional radar. We want our clients
to take action, but they wont do it because we are
telling them to, but because we take the time to find
out what is important to them and why, rather than
making assumptions. Search for common ground; we
dont know all the answers if we are arrogant, clients
switch off. When they come into our meetings, they
feel anxious and vulnerable take the time to relax
and help them feel comfortable.
Being present helps you stay engaged before
the meeting, clear your head of your things going
on in your life, your biases, and rid your mind of
assumptions.
3. AWARENESS
Be authentic your message must be your own.
If you feel uncomfortable, your client will sense it
immediately. Your client wants to know you and
who you are in order to trust you. Knowing yourself
and how you operate is a good place to start. Keep
things simple and try not to speak above your clients.
Help clients feel comfortable, and understand their
expectations of you. Manage these expectations,
as disappointment and a client complaining about
you costs lots. To move others, we must be able
to see things from their point of view. Have an
understanding so there wont be a misunderstanding,
said Charles Blair.
50
Aug 14.indd 50
4. RESPECT YOUR CLIENTS
Treat each client as a 10 connecting occurs when
the other person feels valued. People like people who
like them.
Use questions effectively they are the secret to
every conversation and helps you fast-track getting to
know your client. Questions help us to talk more about
our client rather than ourselves, and to find out what
clients really value. We have found really effective
questions are:
What is your first money memory?
What lessons about money did you learn growing up?
What previous experiences have you
had with financial planners?
If you had all the money you would need,
how would you live your life differently?
We now have a number of stories about our clients
which we can use to write their financial plan in
line with their lives. A client is less likely to seek out
another planner when they have shared their stories
with you. Also, they are more likely to reveal more
of their financial position, like assets that they have,
when they share their stories. You can use their stories
anonymously to help other clients who may be facing
similar challenges.
5. TRIBE
People want to belong to something creating a sense
of community and belonging engenders loyalty in our
clients. We can begin to add value in our clients lives
through functions, newsletters, phone calls, ideas that
are not just around money..
We as planners can embrace the philosophy with
each other. Sharing at conferences and writing articles
improves the way we all do financial planning. This
sharing adds to our feeling proud of our industry,
taking it to an even greater level of professionalism.
CONCLUSION
The very definition of a financial planner suggests we
make a difference in peoples lives.
We are not just gathering information for the sake
of it rather we can go beyond the head connection
to the heart connection which is much stronger. This
will ensure that we are truly making a difference and
that our profession grows to become indispensable in
peoples lives.
COVER AUGUST 2014
2014/07/18 3:12 PM
 A word from the CEO
Following the convention, Godfrey
Nti, CEO of the Financial Planning
Institute (FPI) commented, The
objective of this event is twofold,
firstly we want to improve the
level of professionalism and
positively influence the quality
of advice delivered by our
professionals. Secondly, we use
this opportunity to recognise
and celebrate members who are
advancing the profession through
our various awards.
This years convention allowed
our professionals to put themselves
ahead of the financial services
industry pack. The workshops and
panel discussion sessions were on
a variety of topics, including how
to succeed in an ever changing
business world with special focus
on ways in which professionals
can use technology to achieve
specific business outcomes, tips
and strategies on networking,
reaching new markets as well as
introducing and running mentorship
programmes, said Nti.
The success of the convention is
an indication that we are doing
something right and Im confident
that future events will be just as
successful. We will continue to
partner with industry players to
ensure that we create a platform
for vibrant industry debates to
encourage the progression of our
profession, concluded Nti.

The FPI Professionals Convention online

COVER spoke to FPI CEO, Godfrey Nti, about
the role that the FPI plays in the industry, the
changes he has seen during his term, and the
future of financial planning in South Africa.
Peter Hewett was named the top Financial Planner
for 2014 at this years FPI Professionals Convention.
COVERs editor, Tony van Niekerk, spoke to Peter
and the two finalists, Donovan Adams from Chartered
Wealth and Bruce Fleming.
Please visit our website to watch these videos:
http://www.cover.co.za/financial-planning/the-future-
of-financial-planning-2
http://www.cover.co.za/videos/best-financial-planners-
in-sa
For photographs of all of the FPI Professionals
Convention visit our Facebook page:
www.facebook.com/COVERPublications

COVER AUGUST 2014 51

Aug 14.indd 51 2014/07/18 3:12 PM

 Zurich 10

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 healthcare
Strategic fit in
healthcare innovation
MMI Holdings has announced
that it has acquired, subject to
relevant regulatory approval,
the CareCross Health Group,
including a majority share
in Occupational Care South
Africa (OCSA). The acquisition
fits perfectly with the strategy
of other group entities,
including Metropolitan
Health, the newly acquired
Guard Risk and Hello Doctor,
in their quest for developing
innovative solutions that
create affordable access to
quality healthcare.
The acquisition specifically
complements Metropolitan Healths
current offering, further enhancing
their ability to reduce healthcare
costs and improve outcomes by
coordinating services across the health
value chain - particularly through
the provision of primary health care
services, managing access to specialist
products and controlling the chronic
medicine value chain. The acquisition
is also expected to generate synergies
62
Aug 14.indd 62
between OCSA and
Metropolitan Healths
existing workplace
wellness capability
Metropolitan Wellness.
Since inception in
1998, CareCross
has focused on
delivering affordable
healthcare through
provider networks.
The company, with a
national network of
around 2 000 General
Practitioners and 4 000
associated healthcare
professionals such as
specialists, dentists
and optometrists, currently delivers
managed care and administration
services to approximately 200 000
medical scheme beneficiaries.
OCSA is widely considered a market
leader in workplace health and
wellness solutions. Through a joint
initiative with OCSA, CareCross
delivers integrated occupational health
solutions to approximately 55 000
workers nationally.
Metropolitan Health manages health
benefits for 3 million beneficiaries.
The company successfully leverages
economies of scale, a proprietary
technology platform and integrated
health risk management to reduce
healthcare and non-healthcare costs
for their clients.
MMI CEO Nicolaas Kruger, says,
The acquisition of Carecross is an
important milestone. It extends our
ability to offer holistic solutions to
our existing and prospective clients,
further reinforcing our commitment
to client centricity. This transaction is
also in line with MMIs strategy to grow
through diversification.
Metropolitan Health CEO, Blum
Khan, believes that, in addition to
strengthening and complementing
their current suite of services, the
acquisition aligns perfectly with
our goals for profitable growth and
pioneering the pursuit of innovative
solutions that expand access to quality
healthcare.
Group Chairman for the CareCross
Group, Ian Black, believes the
acquisition will be seamless for clients
and ultimately of significant benefit
to the clients of both companies.
CareCross has pioneered some unique
delivery models. With the weight of a
major market player and the synergies
the acquisition will generate, there is
now opportunity to fully leverage the
potential of these unique capabilities,
says Black.
Founder and Managing Director of
CareCross, Dr Reinder Nauta, indicates
that CareCross has always been
synonymous with creating access
to affordable healthcare a passion
which Metropolitan Health shares.
Nauta continues, This acquisition
brings together companies who share
a common vision and gives great
impetus to the search for innovative
solutions that improve access to
quality healthcare, on a sustainable
basis.
It is envisaged that the acquisition,
will provide the current CareCross
and OCSA clients with access to
Metropolitan Health initiatives, such
as an in-pharmacy clinic venture with
the Alpha Pharm franchise group,
Hello Doctor services and the Multiply
Rewards programme.
Khan concludes, South African
healthcare needs to move from a
system of sickcare to healthcare,
against a backdrop of severe resource
challenges. The acquisition further
strengthens our ability to actively
contribute to this transformation
and create a healthcare ecosystem
that connects all South Africans to
affordable, quality healthcare.
COVER AUGUST 2014
2014/07/18 3:12 PM
 Tips for my client:
Considering a change in medical scheme?
Added value another medical
scheme could offer additional
One can switch medical schemes at any time during wellness elements
the year, but members could possibly find themselves
Service delivery in the event of
out of pocket if they have a savings option on their a schemes service delivery being
existing medical scheme and the upfront savings have problematic
been used. According to Gavin Grin, Business Unit Changing employment if a member
Head of Aon Hewitts Healthcare Division, this amount resigns, is retrenched or retires
will need to be settled by the member when moving to Where costs and benefits on a
a new medical scheme. healthcare scheme is a concern,
members will often move to another
option within the same medical
scheme. By doing so, the member
It is ideal to make a change in your waiting period, restriction, exclusion avoids any waiting periods and
medical scheme at year-end. The or co-payment may be applied to any it provides the member with an
general risk benefits on a medical member in respect of PMBs if services opportunity to either buy-up within the
scheme are annual benefits, such as are rendered by State Hospitals or the scheme to acquire better benefits or to
having R2 400 per annum for acute schemes Designated Service Providers buy-down with the purpose of securing
medication, as an example. If you join (DSPs). lower contributions, most schemes
a new scheme during the year, the only allow buy-up at the beginning of
benefits are adjusted proportionately There is normally no general waiting a benefit period, but would allow buy-
(prorated for the remainder of the period involved if your employer offers down during the year.
year). more than one medical scheme to its
If a member however opts to buy down,
employees, commonly referred to as a
NOTICE PERIOD I would strongly recommend that the
split risk arrangement. Due to existing
It may be a good idea to read the members current benefit needs are
underwriting concession there could
fine print as far as notice periods are comprehensively reviewed in order
however be an open enrolment period to ensure that buying down will not
concerned. Many medical schemes where these schemes will accept a
have a notice period of 30 days, while leave the member out of pocket when
members underwriting with no waiting claiming or without benefits that
others may have a longer notice period period attached to it during the first
and in some instances it could even cannot be self-funded.
month or two of the New Year and will
be waived. The period is normally
impose a waiting period thereafter in ADVICE
stipulated in the Scheme Rules and
order to prevent anti-selection, among In order to make an informed
must be complied with. There are
others. decision regarding a medical scheme,
normally no penalties or cancellation
options within a medical scheme or
fees involved if members give due REASONS FOR A CHANGE a new scheme, it is best to consult
notice, a member is entitled to full There are many reasons for changing a healthcare intermediary. A broker
benefits during the notice period as medical schemes: should provide you with best advice
contributions are being paid.
to switch options or medical scheme,
Costs many would opt for a more taking into account your current
WAITING PERIOD
affordable option healthcare needs and financial
A new scheme could impose a general
waiting period of up to three months. position by comparing benefits and
Benefits members could either need
During this period contributions are contributions within a members
less or more healthcare benefits
payable without the member being existing scheme with options within
entitled to benefits, which means Exclusions any exclusion on other open medical schemes.
that general medical expenses will a benefit could potentially be
not be covered. Most people are negotiated better elsewhere
however not aware of that fact that the
Prescribed Minimum Benefits (PMB) Accessibility limits on preferred
- including emergencies - should be healthcare practitioners for example
covered during this waiting period. No could be overly restrictive

COVER AUGUST 2014 63

Aug 14.indd 63 2014/07/18 3:12 PM

 Insurance Regulation Conference
Two days of regulation uncovered
The President of ASABA the
Association of South African
Black Actuarial Professionals
Kgodiso Mokonyane was
the chairperson of the second
annual Insurance Regulation
Conference from 3 to 4 June
2014.
Herewith a synopsis of what was
covered at the conference this
year.
The first day focused on
insurance reporting, ILAB, SAM,
and TCF.
Challenges of insurance
reporting David Mbatha,
Accenture UK
Mbatha, Senior Manager at Accenture
UK, presented his view of the future
challenges on insurance reporting, in
both the financial and regulatory space.
To provide a historical context, Mbatha
said that Solvency I, which is based on
the insurance EU directives, dates back
64
Aug 14.indd 64
to 1973 for non-life and 1979 for life
insurance. Solvency II is set to go live
in 2016. The International Accounting
Standards (IAS) was also implemented
in 1973.
The 2008 financial crisis showed the
strength of the insurance industry.
Mbatha argued that the insurance
sector helped provide a stabilising
influence to the crisis due to its
longer-term investment horizon and its
conservative investment approach.
the critical success
factors for insurance
reporting are: strategic
transformation, phased
implementation, strong
project management,
and high quality data.
Mbatha said consumers remain at the
fore of regulatory changes, and the
focus of upcoming insurance financial
and regulatory changes has been
on as assessment of own risk and
impact on capital; consistent market
valuation of assets and liabilities; and
a greater focus on asset quality and
transparency.
He summarised the reporting challenge
as follows: New legislation asks for
more reporting and data requirements
with shorter reporting timelines, a
more complicated reporting of capital
and own funds, as well as new group
reporting requirements and expected
futuristic reporting. All this needs to be
done while most of the industry still
uses outdated legacy policy systems
with limited capability, and specialist
resources are scarce.
However, Mbatha highlighted the
benefits of complying with regulation,
saying it would lead to faster reporting,
sophisticated modelling and reporting,
a transformation in financial systems
through technology, and greater
transparency and comparability, which
leads to increased confidence.
In conclusion, he said, the critical
success factors for insurance reporting
are: strategic transformation, phased
implementation, strong project
management, and high quality data.
COVER AUGUST 2014
2014/07/18 3:32 PM
 VOLCANO 30373
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CUSTOMERS...
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30373 MF_ 1Broker Integrated_Cover Mag.indd 1

Untitled-1 2014/03/20
2014/07/18 11:50 AM
3:30 PM
 Insurance Regulation Conference
Insurance Laws
Amendment Bill Robert
L. Shaw, Constantia
Insurance Company Ltd
CEO of Constantia, Robert Shaw
endeavoured in a short time to provide
a comprehensive overview of the
Insurance Laws Amendment Bill (ILAB).
On 29 May 2014 Cabinet approved the
Bill, which was tabled in Parliament on
21 June 2013. The Bill was presented
to the public on 26 June 2013. At the
moment it is expected that the ILAB
will become active in the second half
of 2014.
Shaw said the purpose of the Bill, as
set out in the original media document
released by National Treasury, is to
enable a fair, safe and stable long-
term and short-term insurance industry
for the benefit and protection of all
policyholders.
Sections 14(a) through to 14(l) contain
amendments to the governance
framework for long-term insurers, while
section 14(i) provides amendments for
short-term insurers.
Shaw warned against comparing
South Africas legislative framework
to international insurance regimes and
banking sectors.
He highlighted the hurdles and
challenges of implementing ILAB, and
said that a lot of time is necessary to
implement changes effectively.
Technical provisions in a
SAM world Jean Gerin,
Deloitte
Actuarial Manager Jean Gerin spoke
about technical provisions in the short-
66
Aug 14.indd 66
term insurance space with a brief
introduction of technical provisions
within life insurance under SAM.
Gerin defined technical provisions as
funds set aside today by the insurer to
meet future cash out-flows. In future
the insurer will pay out claims and
expenses. Technical provisions are a
liability on the insurers balance sheet.
From 1 January 2016 insurers will
be required to report to the FSB in
accordance with the Solvency and
Assessment Management programme
(SAM).
SAM will change the way that technical
provisions are determined. Gerin
explained: Under SAM, Technical
provisions will need to reflect reality
as far as possible and will need to be
on a best estimate basis. This best fairly, they will continue to make use of
estimate will also need to include
an additional risk margin, in case the
best estimate technical provision is not
enough.
SO WHATS THE DIFFERENCE?
At the moment, said Gerin, the
FSB has a standard system of rules
for short-term insurers to calculate
technical provisions that apply across
the board. This rules based approach
doesnt produce realistic Technical
Provisions, he said, as actual claims
and expenses paid are likely to differ
from the amount of funds held to cover
these future cash outflows.
There will be a shift away from the rules
based approach to a more risk based
approach, which will require more skills
and expertise, and a greater knowledge
of the company by the insurer.
For the life insurer, the discretionary
margins will be removed under SAM.
This should make it easier to compare
companies balance sheets.
Michelle ONeill from Hollard Insurance
and Michael Linake from Mutual &
Federal spoke about how they have
made TCF part of their companies
culture.
How Hollard implements
TCF Michelle ONeill,
Hollard
ONeill is the Head of Customer
Centricity and Quality Assurance at
Hollard. Hollards attitude towards TCF
is: TCF is about our customers, not
compliance. ONeill spoke about the
TCF journey that led to this positive
attitude.
She said when implementing TCF it
is important to move away from the
tick box approach. Instead, TCF
should become a part of the companys
culture its mission and vision
statements and standards.
Secondly, its important that the TCF
tone is set from the top. Hollards
CEO, Nic Kohler, wanted to be
actively involved in each stage of the
implementation process.
Establish a TCF vision for your
company, and embed the fair
treatment of customers into the
companys culture, strategy and
processes.
TCF makes good business sense, said
ONeill. If you treat your customers
your services.
TCF starts with a conversation, she
said, and its important to communicate
and to make staff members part
of the process. Through effective
communication Hollard was able to
raise awareness around TCF early.
Hollardites engaged in fun activities,
for example bathroom branding ad
TCF coffee sessions, to continue the
conversation of TCF.
Mutual & Federal TCF case
study Michael Linake,
M&F
Linake is the Head of Customer
Experience at Mutual & Federal. In
the Mutual & Federal case study, M&F
invited their management team to the
world of the consumers to remind them
that customers remain at the heart
of their activities. They asked their
managers, if you were the customer,
would you think this is fair?
COVER AUGUST 2014
2014/07/18 3:32 PM
 Linake identified five stages in the
process of becoming an ethical
company, starting with an amoral
everyone does it approach and
moving to a legalistic if its legal,
its fair approach. The responsive
approach responds to social pressure,
giving way to the emerging ethical
approach to do the right thing. The
final stage is where the company
should want to be, the ethical
approach where moral philosophy and
profitability balance one another out.
We made TCF awareness fun,
said Linake, through challenges,
competitions and interactive games.
We trained our board, management
and staff on Treating Customers
Fairly, said Linake, and we
embarked on a company and country
wide communication and training
intervention.
WHERE TO FROM HERE?
The journey is not complete. M&F will
embed TCF in the business through
case studies, conduct continuous TCF
risk management and refinement
of processes, set a standard for
simplifying guidelines through plain
language, monitor compliance and
debate the big issues with brokers.
The second day saw a dissection of
current and future legislation.
POPI Nikki Pennel, KPMG
Pennel, Senior Manager of Corporate
Law Advisory Practice at KPMG, said
that POPI covers and includes all
the other insurance legislation: FAIS,
Short-Term Insurance Act, Long-Term
Insurance Act, CPA, NCA, and Financial
Services Laws General Amendment
Act.
She gave a brief overview of the eight
conditions of POPI the Protection of
Personal Information Act. They are:
Accountability
Processing limitation
Purpose specifications
Further processing limitation
Information quality
Openness
Security safeguards
Data subject participation
COVER AUGUST 2014
Aug 14.indd 67
Pennel said in the case of a data
breach, the data subject has the right
to institute a civil claim directly or with
help from the Regulator. She said that
minor contraventions can attract a
fine or 12 months imprisonment, while
major breaches will attract a bigger fine
and 10 years imprisonment.
According to her the cost of a security
breach include identifying and repairing
security compromises, communicating
with affected customers about the data
breach, man hours spent in managing
the process before the regulator, and
cost of reputational damage control.
Impact of Insurance VAT -
Andr Meyburgh, KPMG
Meyburgh is the Director of Indirect Tax
at KPMG. He provided a brief summary
of the history of insurance Value Added
Tax in South Africa and discussed
subsequent rulings. The VAT Bill was
published in 1990 for comments.
In 1990 SARS issued a ruling that
stated that insurance companies must
account for VAT on premiums and
commissions on a payment basis.
The ruling permitted for self-invoicing
through the use of a bordereaux,
and the policy would become the tax
invoice upon payment of premiums.
Meyburgh said that there are still today
many countries that dont have VAT
legislation for short-term insurance.
There are three sections of the Vat
Act that impact short-term insurance:
Sections 8.8; 11.2D; and 16.3C.
Meyburgh said that various subsequent
rulings by SARS have been conflicting
in nature, for instance pertaining to
excesses subject to VAT. Since 1990
everyones decided how to deal with
excesses in their own way, he said.
On 1 January 2007 SARS withdrew
all rulings. SAIA has published a white
booklet that became the gospel for the
short-term industry when it comes to
VAT.
The new wording on a policy document
to serve as tax invoice is:
In terms of a ruling issued by SARS,
this document together with proof
of payment of premium constitutes
an alternative tax invoice, debit note
or credit note as contemplated in
sections 20(7) and 21(5) of the VAT Act
respectively
For intermediary debit notes, the
intermediary must rename the
document Premium Notification.
These new notes dont trigger timing,
but premiums paid instead.
FSBs retail distribution
review Patrick Bracher,
Norton Rose Fulbright
Director of Norton Rose Fulbright SA,
Bracher spoke about the FSBs Retail
Distribution Review (RDR). Bracher
said the FSB is committed to creating
a sustainable business model and it
is important for everyone to become
involved and provide feedback on the
discussion paper.
Bracher said the aim of RDR is to
achieve value for customers, to
create products that meet reasonable
expectations and for consumerism to
drive insurance regulation. He said the
proposed changes are activity-based to
avoid conflict and create fair products.
There are many sources of
remuneration, said Bracher, including
services as intermediary, binder
activities, outsource activities, broker
services, FAIS services and lead fees.
67
2014/07/18 3:32 PM
 Insurance Regulation Conference
Bracher said its important that
everyone comment on genuine services
for fair remuneration, especially on
section 8(5) which pertains to brokers
fees.
Bracher discussed three risks as
identified by RDR: risk to client, risk to
intermediaries and supervision risk.
Clients face risks of high costs, hidden
costs, product value, accountability
and value of ongoing services.
Intermediaries face risks of being
underpaid for services and having their
services undervalued. The FSB needs
the playing field to be levelled, they
need standards to be proportional, and
they need roles and remuneration to
be clearly identified.
WHAT DOES THIS MEAN FOR
BROKERS?
Brokers and other intermediaries will
have to look at their contracts and
make sure they contain the proper
terms of business agreements. The
broker that acts for both parties must
make complete disclosure about his/
her role, and tied and multi-tied agents
must tell their customers what limits
there are to their advice.
The policyholder will pay fees where
theyve received a client service.
Bracher said there is a difference
between upfront and ongoing
remuneration. There are different types
of remuneration, including a flat fee,
commission, trail fees, time-based
services and cost-plus-profit based
remuneration. The client will have the
right to stop ongoing remuneration.
68
Aug 14.indd 68
Bracher predicted that future steps
by the FSB will include much broader
retail distribution regulation and
reforms of the FAIS Act.
Operational risk Hennie
van der Watt, Alexander
Forbes
Van der Watt, Head of Risk and
Compliance, pulled from various
resources, including Basel I and
II, Solvency I and II, as well as
international insurance associations and
banks, to define operational risk as
follows:
The risk of a firm not being able to
meet its operational goals or achieve
strategic excellence, because either
somewhere, someone, didnt do their
job properly or the firm is obviously
clueless to the divide that exists
between what they think is happening
in reality and what is actually
happening in reality.
Van der Watt said operational risks can
occur in the following areas: internal
and external fraud, employment
practises and workplace safety,
clients and distribution, processes and
procedures, and regulatory risks.
Van der Watt argues that operational
risk management should be made
part of the companys culture, as
most employees are frustrated
and uninspired by the check box
approach to compliance. He cited
the following challenges as key focus
areas: consistency, tone at the top,
framework, data and governance.
He said that in order to raise
awareness in the workplace about
the importance of operational risk
management, the tone from the
top drives the action, and a good
framework adds value, strips away
waste and drives change.
The cost of compliance
Robbie Stutterheim, Robbie
J. Stutterheim Consulting
Stutterheim, an independent
compliance officer, conducted an
analysis of the cost of compliance
among his clients mostly long-term
and short-term insurance brokers,
as well as employee benefit and
investment advisors. Stutterheim said
this focus group ranged from one man
organisations to large corporates.
Stutterheim asked respondents four
questions, and they had to calculate
their expenditure as a percentage
of gross income commission and
allowable fees.
Stutterheim asked respondents about:
1. Direct compliance and regulatory
costs: licensing, fees, penalties, etc.
2. Expenditure on continued
professional development.
3. Cost of innovation; to enhance
procedures and methods,
communication, etc.
4. Cost of resources; IT and
equipment.
Stutterheim concluded: There is no
actual cost to compliance. The cost will
depend on expenditure required for
self enhancement or innovation to stay
compliant and may include some costs
to put in place measures that will in
any case enhance ones own ability. My
experience is that some of my clients
had to spend more on this than others
depending on their initial readiness to
adopt best practice.
However, said Stutterheim, the
reasons and extent of regulatory
directives should be critically evaluated
in terms of necessity, applicability and
unforeseen consequences.
Stutterheim concluded: What needs
to done however is for the Regulators
to decide on the optimum levels
of regulation for different services
providers in terms of costs and risk
to consumers and to adapt regulatory
requirements to each type of
intermediary, difficult as it may be.
COVER also spoke to three of
the presenters on film. Watch
their interviews at:
Hollards approach to TCF:
https://www.youtube.com/
watch?v=B8IyMupKO_Q
The impact of VAT on insurers:
https://www.youtube.com/
watch?v=BfQ5z8kMkVI
Value of operational risk:
https://www.youtube.com/
watch?v=rcPYVYB_lOc
COVER AUGUST 2014
2014/07/18 3:32 PM
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Untitled-1 1 2014/07/18 3:33 PM

Bringing head office
experience to SA
T
his month, COVER got
to learn a bit more about
Aons Reinsurance Broker,
Alton Byrd. Born and bred in
the United States, Byrd brings
to Aon Beneld South Africa a
unique global insight, and all
the tips and tricks from Aons
head ofce.
70
Coffee_aug.indd 1
Coffee with
COVER
Tell us, what is your story?
Im from the United States, grew up
in Boston, Massachusetts. I completed
my undergraduate studies at the
University of Mass-Amherst, where
I concentrated in Accounting. After
graduation, I worked as a Certied
Public Accountant at Ernst & Young and
"As an African
then later Private Equity Administration American, Ive
at Morgan Stanley. I started my
always had a
reinsurance career with Aon Beneld in
2006 after completing my MBA at the general interest
University of Chicago. I hold Certied in the continent."
Property & Casualty Underwriting,
Risk Management and Reinsurance
designations. I transferred to Aon
Beneld South Africa January 2013. I am
married to my lovely wife Nnema and
we have two children.
Why did you come to South
Africa?
As an African American, Ive always
had a general interest in the continent.
But specically, while I was Chicago,
I started increasingly hearing about
the African Renaissance and that this
is Africas time. This really drew my
interests. Africas improved political
and economic stability and expected
high single digit growth rates make it
an attractive place to grow my career
and fully utilize my skills base. So when
2014/07/18 3:34 PM
 our Aon Beneld South Africa ofce the SADC countries. My focus has
requested a senior treaty broker, I been to generate business from within
explored the opportunity and then South Africa and Botswana. Long term,
began discussions on a possible I would like to have more involvement
transfer. within West Africa. I see much of Africas
"There are future growth coming from this region.
What are your thoughts so far?
also business What do you see as your main
South Africa is a wonderful country.
opportunities to Thus far, my experience has been contribution to Aon Beneld
be gained through very exciting and rewarding. I enjoy locally?
enhancing the people, cultures, history and the
From an Aon Beneld perspective,
braais. Also, the insurance environment
the customer is quite dynamic with the start-ups,
I share my head ofce experience
locally. There is product, market and
experience." forms of insurance companies and
process knowledge that I am able
treaty structures. There is never a
to transfer to my colleagues here. I
dull moment. I feel the country has
am also gaining from what is being
great long term business prospects.
done here. For one, our local tender
Insurance on the continent, for one,
process is very innovative. But I think
will benet signicantly as the middle
my main contribution is having sound
class continues to emerge and looks to
work experience in team productivity
protect their assets- increasing both the
and operation efciency. I understand
insurance and reinsurance pie.
how to motivate staff and do things
Where do you see yourself over in a more cost-effective way. This
operational maintenance sometimes
the next few years? gets overlooked.
I see myself on an executive team
helping to drive business expansion on What is Aon Benelds vision for
the continent. From my experiences in the business in Africa?
South Africa and visits to other African
To continue to be the lead reinsurance
countries, I see good opportunities
broker on the continent - and we do
to expand and do business more
that by continuing to invest in our
strategically through distribution
people, products and services, so that
channels, cross selling and partnerships.
we deliver distinctive value to our clients
There are also business opportunities
that help them better understand,
to be gained through enhancing the
assess, manage and transfer risk.
customer experience.
"I enjoy Where will you be focusing your
the people, efforts in the short term, and in
cultures, the long term?
history and Within Aon Beneld, I work on the
South Africa treaty side, which includes
the braais."

71

Coffee_aug.indd 2 2014/07/18 3:34 PM

 Protecting your
precious income
Has income protection taken its rightful place in the protection portfolios
created by nancial planners, and are the product meeting the needs of the
clients? COVER picks the industrys brain around current developments in
the income protection space, what they are offering clients and why nancial
planners should be spending more time on advising clients on these solutions.

Redening income
protection
Ryan Switala, Head of Risk
Product Development at
Liberty, shared his thoughts
with COVER around income
protection, and what they are
doing to ensure that clients
needs are being catered for.
Has income protection taken its
rightful place in the protection
portfolios created by financial
planners? Are the products meeting
the needs of clients?
The assessment of a clients
income protection needs is usually
a fundamental component of any
financial needs analysis carried out
by a financial planner. So arguably,
one can say that income protection is
being adequately considered from this
perspective.
However, the relative sales of income
protection benefits are still fairly
low compared to that of life cover
insurance and therefore it is difficult
to state convincingly that income
protection has taken its rightful place
by financial planners in practice. It
seems to be so in theory, however the
practical numbers argue otherwise.
I believe that the income protection
products that are available in the
market today do meet the vast
majority of customer needs relatively
well. However, there is always room
to improve products and to continue
creating innovative solutions that
further improve product designs to
meet ever-changing client needs.
THE CURRENT DEVELOPMENTS IN
THE INCOME PROTECTION SPACE
We believe that Liberty has played a
significant role in redefining the income
protection market in South Africa
over the years. Our latest range of
income protection benefits recognise
that customers need holistic income
protection products that provide wider
cover than just protection for their
income against an injury or illness
which leads to an inability to work.
Therefore, the income protection
solution we have created offers more
extensive coverage in terms of the risks
that it protects against; i.e. we provide
the option to cover against other risks
that may negatively affect income
such as retrenchment, critical illness
and even financial relief for premiums
during maternity.
The income protection cover can also
be extended to add an element of

72 COVER AUGUST 2014

Aug 14.indd 72 2014/07/18 3:12 PM

 Insured by Guardrisk Life. FMI is an authorised Financial Services Provider. FSP 2717.

Untitled-1 1 2014/07/18 3:35 PM

 Income Protection
protection for a customers family,
rather than just themselves. For
example, our unique Child Illness
Protector allows the income protection
cover amount to a maximum of
R30 000 to be paid out for up to
12 months if the customers child is
diagnosed with a terminal illness. This
affords them the financial freedom to
spend their time with their child in a
period that is extremely emotionally
and financially taxing.
HOLISTIC INCOME PROTECTION
In addition, we believe that income
protection needs do not end at
retirement. After retirement, a person
might not face the risk that they are
not able to work anymore, but they
do face the risk that a permanent
Beneting professionals
Interesting trends in the income protection space
For young people the first risk
to cover is the loss of earning
ability. Most people start work
before getting married and
having a baby so the need for
life cover is limited. However,
protecting their future earning
potential is critical. This need
to protect the ability to earn an
income is likely to be required
until retirement. Financial
advisers should therefore be
spending more time advising
clients on income disability
solutions and the latest
developments in this area.
There has been an increased focus
in the income disability development
area over the last few years with
more companies trying to introduce
sickness type benefits for professionals
where pure income replacement
policies may not always meet the
clients needs. This is due to the fact
that many professionals in private
practice are unable to claim from
income replacement policies as they
earn income for work done in previous
months.
74
Aug 14.indd 74
impairment could lead to costs
that erode their retirement income
prematurely. To protect against this
risk, Liberty offers whole of life term
options on our income protection
benefits.
INCOME PROTECTION
BENEFITS IN SOUTH
AFRICA ARE AMONGST THE
MOST COMPREHENSIVE IN
THE WORLD
TAMAR LEWIS,
Product Actuary at PPS
For example, a doctor may only
be receiving income this month for
patients he saw 2 or more months ago.
This means that if he is booked off
sick, unable to work and generate an
income, he wont be able to prove loss
of income as he is earning money from
previous months. The loss of earnings
will occur a month or 2 later when he
is no longer sick, meaning he cannot
claim for income replacement. This is
why sickness benefits were introduced
specifically to meet the needs of these
professionals.
A persons ability to earn a future
income is their greatest asset,
especially early in their career when
there are many working years ahead of
them. Financial planners and advisers
should spend a good deal of time
helping their clients to recognise this
and the importance of protecting this
asset and the insurance products that
are available to do this.
Income protection benefits in
South Africa are amongst the most
comprehensive in the world; and
financial planners play a crucial role in
helping their clients to take advantage
of the opportunity for protection that
such benefits provide.
There has also been a trend for
some companies to allow claims of
up to 100% of pre-disability earnings
(especially in the first and second
years of claim) whereas previously this
was almost always limited to 75% of
pre-disability income. Some employer
schemes have succeeded in ensuring
the insurers of the group benefits
aggregate income from other sources
to 100% of pre-disability earnings and
no longer aggregating income from
all sources to 75% of pre-disability
earnings anymore. This is an exciting
change that allows employees on a
group scheme to take income disability
cover in their personal capacity to
cover the gap between the group
benefits and their actual income.
Previously, this was not possible as the
group benefits would simply aggregate
with this personal cover and they
would still only be covered for 75% of
their earnings.
PPS has always offered sickness
benefits to its professional clients
recognising this specific need. PPS also
does not aggregate with other benefits,
allowing professionals in corporate
employment to fully cover the gap in
cover between the group benefits and
their actual income. PPS now allows
professionals to cover their full income.
COVER AUGUST 2014
2014/07/18 3:13 PM
 www.genric.co.za

I
I N
E N I N A S S
M U N T P S P U
P A R T N E R S H I P
O L T R O G O U E R P
WL U U V R T R L EO
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R E T T T C T
E Y T
Whether you are a direct client, broker, underwriting agency or administrator,
you can rely on us to offer innovation and flexibility in dealing with you,
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BUILDING 3, MIDRAND OFFICE PARK, 563 OLD PRETORIA MAIN ROAD, MIDRAND, GAUTENG
GENRIC Insurance Company Ltd is an Authorised Financial Service Provider. FSP Number 43638
GENRIC Insurance Company Ltd is a registered Short Term Insurer

Untitled-1 1 2014/07/18 3:35 PM

 Income Protection
Income protection policies
Picking Brightrocks brain
Income protection policies have
not yet gained a significant
amount of traction in the
market, with lump-sum based
capital disability products
still dominating the disability
insurance market in South Africa.
According to a Swiss Re survey,
73% of the disability insurance
sold in South Africa is lump-
sum cover. These products are
perceived to provide greater
certainty.
The reason for this could be ascribed
to the fact that most income protection
policies lock in on benefit structures
without meeting the policyholders
individual needs, leading to a
questionable value proposition. In
addition to this, having capital in hand
at claim stage provides more certainty
and options and the claims definitions
with income protection policies often
include an aggregation of active
income.
An increasing amount of insurers are
offering flexible income protection
options, which may help increase the
76
Aug 14.indd 76
Both self-employed and corporate
employed professionals can cover their
income in full should they fall sick or
become disabled and are no longer
able to generate an income.
SOUTH AFRICA HAS
VERY COMPREHENSIVE
OFFERINGS COMPARED
TO THE GLOBAL MARKET.
When it comes to the income
protection environment, South Africa
has very comprehensive offerings
popularity of these products in the
market. An example of this would be
the fact that some insurers now offer
income pay-outs for death benefits
something that was pioneered by
BrightRock and also recently introduced
by another market player.
LUMP SUM PRODUCTS ARE NOT ALWAYS
APPROPRIATE TO THE CLIENTS ACTUAL NEEDS.
Income protection policies pay a
recurring income in the event of
permanent disability or temporary
disability, whereas lump-sum disability
policies cover permanent disability
through a once off lump sum pay-
out. In BrightRocks opinion, the main
purpose of income protection products
and lump-sum disability cover is
essentially the same in the sense
both products are aimed at protecting
future income. The choice of product
should suit the policyholders
circumstances and needs at claim-
stage, something which, in our
opinion, is impossible to foresee at
point of sale.
compared to the global market.
Overseas, many companies have
experienced significant losses as a
result of income disability claims. This
has not been experienced in South
Africa, as a result there is not the same
move to limit benefits as seen in some
international markets.
The proposed new tax treatment for
income disability benefits, where
benefits will be tax free and premiums
not deductible, is likely to be a key
focus in the future. Education on
how this process will unfold is the
financial advisers role and will become
increasingly important.
With a lump-sum, where a client is
disabled without any impact on their
life expectancy, they are at risk of
outliving their income. Future changes
in economic factors such as inflation,
interest rates and investment returns
could erode the value of the clients
cover by negatively impacting their
ability to buy an annuity that matches
their income needs. Lump sum cover
also typically contains significant
premium waste, as the shape of the
lump sum over time does not track the
clients need and income resulting in
inevitable cover reviews, which lead to
additional costs for the cover.
On the other hand, where clients have
a poor prognosis, if they had chosen
an income protection product that
pays out a monthly income amount
they would receive far less value. A
significant proportion of clients who are
permanently disabled have a severely
impaired life expectancy, meaning
COVER AUGUST 2014
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Untitled-1 1 2014/07/18 3:35 PM
 Income Protection

they would receive far fewer monthly income protection

pay-outs. Other than BrightRock, providers of income
protection products never show you the capitalised value
of the recurring income theyre providing. And theyve
never offered you the option to be paid the lump-sum
instead. Nor can they offer you this annuity rate on
guaranteed terms at each point into the future.

BrightRock believes the current strict delineation between

income-based and lump-sum-based disability cover is
failing to fully meet client needs. Thats why were the
only product on the market to offer clients, if they choose
lump-sum cover for their permanent illness and injury
needs, the ability to change this choice to a recurring
pay-out at claim-stage.

In other words, they only have to decide which option

best suits them when they have an insight into how
long theyre likely to live and what the current economic
conditions are. For example, a client diagnosed with
stage four cancer with a very poor prognosis who has not
been given long to live may take the lump sum, while a
client who loses a hand may opt for recurring pay-outs to
retirement, growing at CPI+1% to replace lost income.

Where clients pick the lump-sum option, we

automatically offer them the choice at claim-stage of a
recurring pay-out on guaranteed terms, to protect them
against the impact of longevity and future adverse market
conditions and to give them significantly more pay-out
value, through the best of both worlds choice. The option
also exists to take a combination of the lump sum and
recurring pay-outs to better meet your needs.

In terms of tax-treatment, this structure also provides

clients with added certainty as it allows policyholders to
change their choice of a lump-sum pay-out to a recurring
income pay-out at claim stage, with no impact on
their income tax treatment- both structures are income
tax neutral. In other words, should clients opt for the
recurring pay-out at claim-stage, then no income tax will
be deducted. So if a clients income need is R30 000 and
this is the monthly pay-out theyve selected, then they
will receive the full R30 000.

Remember that most income protection policies are

designed to assist policyholders in the event of serious,
unpredictable health events. Some income protection
policies have different criteria based on the initial
capital/ recurring selection, for example a client who is
paralysed but goes back to work may receive their entire
capital benefit pay out but recurring pay-outs cease on
returning to the workforce. In the market, the focus on
occupational criteria and the practice of aggregation in
claim of benefits against active income means that clients
may have their pay-out reduced or halted even though
they remain severely ill or injured and continue to meet
the clinical criteria for a disabling illness or injury. This
causes uncertainty for clients.

BrightRock uses the same clinical definition set for

permanent income and capital disability pay-outs, and
once a claim is approved, does not reassess later or
reduce pay-outs against any active income the client
is able to earn despite their disability, which optimises
certainty for clients.

78 COVER AUGUST 2014

Aug 14.indd 78 2014/07/18 3:13 PM

 Your
blueprint

Our
concrete
reinforcement

Scaling
new heights

A spectacularly versatile 50,000-seat stadium in Lille. A tunnel that will unite the traditional and
modern sides of Acapulco. And the 30-kilometre Hong KongZhuhaiMacau Bridge project in China.
Just three examples of the way our Engineering and Construction specialists are working in concert
with insurance companies and risk managers alike, all around the globe. This shared wealth of
hands-on expertise enables us to design and build industry-specific reinsurance solutions that
are both innovative and practical. But whether it concerns one specific project or a worldwide
construction programme, there is one thing we believe it is absolutely essential to build throughout
the life cycle of any endeavour. And thats a strong partnership. Were smarter together.
swissre.com/cov1

Untitled-1 1 2014/07/18 3:35 PM

 Income Protection
What should income
protection do for your client?
BRAD TOERIEN,
CEO at FMI
John is 35 years old and earns
R30 000 per month. With an
annual increase of 7,5% and
retirement planned for age 65,
thats R38 284 528! What would
John do if he were injured or fell
ill and could no longer earn his
income? How would he replace
that future amount?
Every individuals lifestyle is paid for
by their income. Most individuals
have insurance to protect assets they
have bought using that income e.g.
car insurance. If their income were to
cease, their lifestyle would most likely
become unstainable and any policies
(medical aid, investments, retirement)
not being paid would cease.
It is clear that the ability to earn an
income is an individuals greatest
asset, allowing them to maintain their
lifestyle over time. Therefore, everyone
who earns an income should have
income protection.
CHOOSING THE BEST INCOME
PROTECTION PRODUCT
Income protection is designed to pay
your clients income if they are injured
or fall ill, and are unable to work.
However, not all income protection
products are created equal. Some only
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Aug 14.indd 80
pay on permanent disability, others
focus on lump sum pay-outs without
considering the risks.
KEY QUESTIONS TO ASK OF ANY
INCOME PROTECTION PRODUCT:
- Can I get cover for 100%
of my needs?
- Once I take out cover, am I able to
change it at a later stage without
being underwritten again?
- Will I be covered for temporary,
extended (longer than 24 months),
and permanent disability?
- How likely is my claim
to be successful?
- If I have a successful claim,
how likely am I to be paid
the amount I need?
- Only once you have answered these
questions, should you consider price,
brand, and value-added benefits.
HOW SHOULD INCOME
PROTECTION WORK?
Many clients are most concerned about
permanent disability but research
shows that temporary disabilities
are much more likely to occur. And,
individuals are likely to suffer more
than one temporary disability during
their working lives, with 82% of these
claims lasting less than 90 days.
For salaried individuals, this could
result in a loss of income if the
disability period lasts longer than their
sick leave allowance. For business
owners, temporary disability can be
even more stressful as it could mean
a loss of income from the first day of
disability.
These considerations make a strong
case for temporary income protection
as temporary disability can have a
long-lasting effect on the individuals
finances and, ultimately, their lifestyle.
WHAT ABOUT PERMANENT
DISABILITY?
Some clients may select a lump sum-
only pay-out for permanent disability.
Using a lump sum to replace a future
income stream raises a number of
concerns. Individuals who are given
large sums of money often do not
know how to manage them properly,
spending them too quickly. If they are
wise and choose to invest, they might
be faced with unpredictable inflation
and return risks, ending up with a
much less than expected monthly
income.
Permanent disability should ideally
be addressed through a combination
of monthly income replacement
benefits and a once-off lump sum.
To properly protect a future income
stream, monthly benefits that replace
monthly earnings are best. A lump
sum can then be used for once-off
expenses such as repaying debts,
business assurance, or making lifestyle
changes.
INCOME PROTECTION FOR DEATH?
While death and disability are different
risk events, they create the same
need if your client is no longer able
to provide for their loved ones, proper
financial planning can prevent financial
stress being added to emotional
trauma. We believe that Life cover
should be thought of as income
protection it provides an income
for beneficiaries when the insured
breadwinner cannot do so.
Keeping in mind the risks of a lump
sum-only pay-out (now transferred to
the Life Insureds beneficiaries), Life
cover should work the same way as
disability cover. This means monthly
income benefits to replace a future
income stream for beneficiaries and
a once-off lump sum to settle estate
duties and other once-off payments.
ESSENTIAL RISK COVER
Income protection should not be
viewed as one-size-fits-all cover.
Temporary disability, permanent
disability, death all three risk
events should be covered by benefits
designed to protect your clients most
valuable asset their ability to earn an
income.
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Untitled-1 1 2014/07/18 3:36 PM
 Financial Planning
A network of healthcare
Healthcare providers are migrating
from large, independent stand-
alone organizations into complex
new ecosystems. Today Provider
Organizations, affiliated physician
groups, labs and others are involved
in both the provisioning of care,
and the collection of vast amounts
of information from patients.
Health Information Exchanges
(HIEs) are evolving and are a more
affordable means to transfer clinical
information and other data.
Healthcare as we know it is changing
quickly. Healthcare providers will soon
be required to provide communication
and collaboration platforms that
allow seamless integration among the
various stakeholders. These changes
in information flows, along with an
explosion of digital content that needs
to be stored and shared, are driving the
need for a secure, flexible and scalable
IT platform through which Providers,
Payers and Health sciences can support
collaboration and information exchange.
The transition towards more patient-
centric care and decentralized
monitoring means providers, patients
and payers need to access information
that originates outside the hospital
setting. The trends toward personalized
medicine, prevention, and wellness
means stakeholders need to connect
information from various points within
the healthcare value chain including
providers, laboratories, payers, and
patients. The more this private
information is opened to outside
entities, the greater the chance that
these systems can be compromised
either intentionally or accidently.
UPCOMING TRENDS IN A
HEALTHCARE INDUSTRIES
NETWORK
The major challenges to a healthcare
providers network arises from the
different business functions increasingly
taking place in their network.
Allowing Patient and Provider
Access to the Network
As contradictory as it sounds, healthcare
providers are now looking for ways to
increase the access doctors, vendors,
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Aug 14.indd 82
and patients have to applications and
the Internet. With new guarantees
for patients regarding access to
information and a focus on lowering
costs through new initiatives like
telemedicine, the entire healthcare
centre is driving towards a more
collaborative environment where all
parties have access to the information
they need.
The most obvious security concern
with this approach is ensuring that
sensitive information like protected
health information (PHI) and payment
information is kept separate and
secured from general Internet
and network traffic. This requires
encryption and wireless management
technology coupled with traffic
shaping technology to ensure that
the appropriate treatment information
is accessible and is always the top
priority.
Increased Use of Clinical
Informatics to Improve Workflow
Along with the increased collection
and flow of data, healthcare
organizations are constantly striving to
improve workflow, both physical and
information. Improved workflows equal
lowered costs, happy and productive
caregivers and an environment that
allows improved patient safety and
quality care. The key challenge from
a security perspective is ensuring that
only the required pieces of data are
transferred and nothing more.
Increasingly Stringent
Compliance Mandates
As a result of the increasingly sensitive
data handled by the healthcare
industry, regulatory requirements have
been implemented to help increase
the security of healthcare providers
and associates as well as the data they
protect. HIPAA and HITECH set up
standards around protecting PHI.
Healthcare organizations also find
themselves responsible for complying
with the Payment Card Industry Data
Security Standard (PCI DSS). PCI
DSS provides broad requirements
for securing personal non-public
information used on digital technology
in retail systems.
TOWARDS A SECURE HEALTH
ARCHITECTURE
All the challenges mentioned above
require disparate functionality.
Healthcare service providers need to
evaluate their security needs at each of
the following levels:
Management Level
Given the widely distributed nature of
modern healthcare establishments, the
ability to quickly modify and manage
security appliances is essential.
Aggregation Level
The aggregation level is the destination
for all data. Typically this is the hospital
datacentre. Core security functions
such as firewalling, application control
and VPN termination take place at this
level.
Business Associate Level
The individual clinic, lab, doctors
office, or any business associate
requires security and connectivity for
a wide variety of functions including
WiFi, voice, and traditional network
connectivity. With the addition of
consumer connectivity, each associate
much also be able to provide security
functions such as antimalware and
application control.
Access Level
As healthcare organizations extend
access to providers using tablets and to
patients using mobile devices, ensuring
secure access is critical.
The entire healthcare industry is
undergoing a dramatic shift designed
to enhance the level of care provided
to patients. The sensitivity of patient
information has created the need
for end-to-end security solutions
throughout the entire healthcare
network from doctors offices all the
way to the hospital data centre.
Healthcare providers can no longer
afford to take security lightly. Only
with security as the foundation can
healthcare organizations build IT
services and applications that meet
the requirements of the business and
healthcare mandate
COVER AUGUST 2014
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 Determining pension fund
distribution: The dilemma
When a member of a pension
fund dies before retirement
age, the board of trustees is
faced with the difficult task
of determining how the death
benefits should be allocated
among beneficiaries, dependants
and nominees.
The duty of the board of trustees is to
pay these benefits in line with the rules
of the fund as well as the dictates of
the Pension Funds Act. When reading
Section 37C of the Pensions Fund Act
it is clear that there is an onerous duty
on the board to determine dependency
and make equitable distribution without
prior knowledge of the deceased
members household circumstances.
Without established and regulated
guidance or directives on how they
should apportion the benefit, trustees
need to rely on industry best practices
and value judgements to make a
determination. This can be a highly
subjective process that is often fraught
with difficulty.
COVER AUGUST 2014
Aug 14.indd 83
Accordingly, adequate training and a
better understanding of the trustees
obligations under Section 37C, and a
proper exercise of discretion on the
part of the board, could potentially
reduce the number of complaints
directed at the Pension Funds
Adjudicator. The key elements that
trustees need to consider in this
regard pertain to due diligence in
the identification of dependants and
strict adherence to their statutory
obligations.
The board of trustees cannot assume
that dependants are aware of their
potential rights to benefits and as such,
may not come forward to claim their
share of benefits. Active tracing of all
potential dependants is therefore a
process not to be taken lightly, and
should be undertaken as diligently and
speedily as possible, so as to avoid
unnecessary costs and resources to the
fund.
As Section 37C provides that death
benefits do not form part of the
deceaseds estate, trustees are tasked
with ensuring that all dependants,
who could include spouses and/or
JEANETTA HENDRICKS,
Broker Development Manager, FedGroup
children, or any other legal or financial
dependant, benefit equitably.
Trustees still seem to battle with a lack
of understanding as to what Section
37C requires of them at the different
stages of a death benefit distribution.
Coupled with this is the fund members
and their dependants also do not
understand that Section 37C limits
the members freedom of testation,
and is thus one of the leading causes
of contestation after distribution of
benefits has been made.
The Act does not define equitable
nor does it provide any guidelines
on how a board should make an
equitable distribution. Over the years,
the regulator has issued guidelines
on factors to consider in an effort
to achieve equitable distribution.
These factors include the age of
the dependant; the dependants
relationship with the deceased; the
extent of the dependency; the wishes
of the deceased as stipulated either in
the beneficiary nomination form or his/
her last will; and the financial affairs of
the dependants, including their future
earning potential.
Even though these guidelines are
available to boards, these cannot
accept these as the only factors
to consider when determining the
allocation of death benefits.
Unfortunately, with no foreseeable
changes to the Act in terms of
guidance on equitable distribution or
apportionment of benefits, standard
operating procedure and industry best
practice remain the only tools trustees
currently have at their disposal to
ensure equitable and objective fund
distribution.
This article is the first in a series of
four on pension fund distribution,
provided by FedGroup.
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2014/07/18 3:13 PM
 Financial Planning
Is a comfortable
retirement a pipe dream?
FRANK RICHARDS,
Head of investments:
FundsAtWork, MMI Holdings
The luxury of eating pet food
years after retirement will remain
a pipe dream for many.
Data made available by the Financial
Services Board in May 2014 suggests
that the total membership of umbrella
funds across five of the largest insurers
in South Africa is in the region of 1,2
million, with the total assets held
on behalf of the members being
approximately R136 billion. This
means that on average each member
has approximately R120 000 in their
retirement savings account with that
particular umbrella fund. Although this
is an astonishing low amount, we must
consider members average age as well,
which would be around 40 years old for
a working person.
Bringing this closer to home, the
average FundsAtWork Umbrella Fund
member has an average fund credit of
R130 000. Taking into account that
their average age is approximately 40
years, the amount of retirement savings
per member is extremely low. When
calculating the expected replacement
ratio for the average member, it is
clear that the retirement time bomb
is a reality for most. Members apathy
toward retirement fund planning will
result in the luxury of eating pet food
and for some it may remain a pipe
dream. The expected replacement
ratio gives an indication of whether the
member will be able to buy a sufficient
income stream at retirement to maintain
their standard of living until death.
The replacement ratio is reflected as a
percentage and is calculated by dividing
the expected annual income stream
after retirement by the last annual
salary before retirement. It is generally
accepted in the industry that targeting
a replacement ratio of at least 75%
is adequate if we assume that your
pensionable salary is in line with your
total cost to company and you are
84
Aug 14.indd 84
familiar with all the assumptions made.
For example, if your salary is
R10 000 per month by the time you
go on retirement, the pension that
you should aim for should not be less
than R7 500 per month (75%). The
expected replacement ratio calculation
is based on assumptions and should be
reviewed at least annually.
The expected replacement ratio for
most FundsAtWork members is between
30% and 40% if we assume that:
The average member remains
employed and retires at 65;
10% of CTC) and tax of R56 250 (if we
Contributes approximately
10% of their cost to company
(CTC) towards retirement;
Remains invested in an
investment portfolio that
consistently outperforms
inflation by 4% per annum;
Preserves assets if they
change jobs; and
Annual salary increases are
1% above inflation.
What does it mean having an expected
replacement ratio of 30%?
In our example we assume that our
average member is a male buying an
inflation linked annuity of which the
growth will keep pace with inflation and
that he buys the annuity for his entire
life where the longevity risk is taken by
the service provider. This means that his
investment might be exhausted during
his retirement but that the insurer will
assure him of an annuity income for as
long as his lives.
If we assume that the member in our
example earns an annual CTC of R250
000 just before retirement and annual
deductions including only retirement
fund contributions of R25 000 (i.e.
assume a tax rate of 25%) his annual
income is R168 750 or R14 063 per
month.
Having an expected replacement
ratio of 30% implies that he can only
buy a monthly annuity income of R6
250 per month before tax (i.e. 30%
of annual salary of R250 000). This
however assumes that his retirement
fund savings with FundsAtWork is his
only provision for retirement, which is
a fair assumption for most. Employer-
sponsored benefits are often the
only form of retirement savings and
insurance cover individuals have which
COVER AUGUST 2014
2014/07/18 3:13 PM
 means that outside of their formal
retirement savings planning, individuals
dont make supplementary provision.
To avoid downscaling substantially after
retirement, retirees often purchase living
annuities. Living annuities allow retirees
to choose an appropriate drawdown rate
which means you can take between
2,5% and 17,5% annually as an annuity
income to try and maintain your
standard of living after retirement. This
results in drawdown rates well above
the recommended level of between 4%
and 6%, which will reduce retirement
fund savings at a rapid rate if the
underlying investments underperform.
With living annuities retirees run the risk
of their investments being exhausted
during retirement.
Again, using the example of our
average male member, if he buys
a living annuity and withdraws an
Credit life necessary
or nice-to-have?
KHANYI MASHAPA,
General Manager at Absa Life
Managing debt goes beyond
making diligent repayments every
month: it also involves making
sure that, should the unexpected
happen, obligations continue to
be met. In the event of death,
retrenchment, dread disease and
disability, credit life is an easily
accessible, need specific insurance
that provides comprehensive
cover.
HOW DOES CREDIT LIFE WORK?
Credit life is an insurance policy that
covers the risk of a specific debt. What
this means is that as the debt reduces,
the cover and life insurance policy
premiums also reduce. In the event
of death or disability, the outstanding
debt will be settled by the life
insurance company.
WHAT CAN YOU ADVISE
CONSUMERS TO LOOKOUT FOR?
We would advise consumers to
make sure they understand what is
COVER AUGUST 2014
Aug 14.indd 85
amount that is approximately 75% of
his salary (i.e. R250 000* 0,75% =
R187 500) to maintain his standard
of living he will have to select a
drawdown rate close to the maximum
allowed of 17,5%. If we assume that
his underlying assets grow by inflation
plus 4% per annum (10% in nominal
terms before inflation assuming an
inflation rate of 6%) his retirement
assets will reduce at an alarming rate
because his withdrawal rate is more
than the anticipated growth. When he
reaches his maximum withdrawal limit
of 17,5% allowed, which will happen
within approximately three years after
retirement his annual income will
start reducing at a worrying rate with
the possibility of his annual income
halving 10 years after retirement. While
maintaining the maximum drawdown
rate, the average member will reduce
his income to such an extent that they
will become reliant on their friends and
covered and what is not covered in
their policy. This information must all
be disclosed to your client at point
of sale to enable them to make an
informed buying decision and it must
also be disclosed in writing post sale.
In our experience we find that people
forget that they have this cover or
that their families are not aware of
them having taken this cover, which
minimises the chances of claiming and
benefiting from the cover. Good credit
life providers will send you regular
reminders that you have the cover in
place ask whether your credit life
provider will do this. It is important to
understand that other life covers are
taken to ensure that their family or
dependants are financially secure in the
event of death or disability. Therefore
credit life helps in ensuring that your
clients life cover is not consumed by
settling debt.
ARE THERE ANY COMMON
MISPERCEPTIONS REGARDING
CREDIT LIFE?
A common misperception is that credit
life is a condition of a loan and that,
in cases where it is a condition of
family or be forced to sell their house
or other assets simply to get by.
Running out of retirement savings only
years after retirement will have disastrous
consequences and many will end up in
this dire situation this is then when the
luxury of eating pet food could become
a pipe dream. This is exactly why the
government is adamant about P-day, the
day on which preserving ones retirement
savings will become compulsory when
changing jobs.
Financial advisor should contact their
clients in a retirement fund to review
their investment strategies. Those who
are not members of a retirement fund
through their employers should contact
their financial advisors for assistance on
how to start saving. As an immediate
action point, we should all give up on
the luxuries and increase our retirement
savings contribution rates.
a loan; it should be taken with the
credit provider granting the finance
facility. Credit life is generally not
a condition of a loan and therefore
the consumer has the option to opt
out from taking the cover if they are
sufficiently covered. Consumers often
dont realise that they have the choice
to shop around for credit life and dont
necessarily have to take cover with a
specific credit provider.
WHY SHOULD YOUR CLIENT
CONSIDER CREDIT LIFE NOW?
South Africa is a highly indebted
society with many South Africans
servicing large monthly repayments.
Cash-strapped consumers must
therefore take credit life because
it provides peace of mind that the
holders family will not be held liable
for outstanding debts. Credit life is
also an extremely convenient way to
obtain life and disability cover as very
little underwriting is required and the
sales process is integrated, fast and
efficient.
85
2014/07/18 3:13 PM
 Financial Planning
Business confidence
among SMEs declines
Nedbank Small Business Index
(NSBI) first-quarter survey
Business confidence in the
small-business sector declined
in the first quarter of 2014 to
45,3 index points from 48,1 at
the end of last year, according
to the first-quarter results of the
Nedbank Small Business Index
(NSBI).
The results reflect increased concerns
about the South African economy,
which grew at its slowest pace since
2009 in the first three months of this
year, and the consequent negative
impact on business activity.
The findings of the NSBI survey are
based on business owners views
of their current financial situation,
operational costs and support from the
private sector and government.
According to Busi Radebe, Economist
at Nedbank, expectations among
small businesses regarding their
financial situation have deteriorated
in 2014, with respondents noting that
both their current and future financial
situations have worsened to 5,1 and
5,9 respectively, compared to 5,5 and
6,3 in the previous quarter. At the
end of 2013, the prediction was that
2014 would be a more difficult year
economically. This prediction appears
to be coming true as companies
current financial situations have
worsened, and their expectations
of their future financial situation for
the coming 12 months have also
worsened, said Radebe.
Among the main areas of concern
being cited by small businesses
regarding the challenging environment
are the slow economy and the
fact that the current climate is not
conducive to generating new business.
Issues such as high prices and costs
were among their fears, particularly
with regard to the increase in taxes,
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Aug 14.indd 86
petrol prices and electricity, all of
which are impacting on input costs
and cashflow.
Concern among small-business
owners regarding the impact that the
economy is having on their businesses
is consistent with recent economic
growth figures, which have shown a
dip from the end of last year, marking
the first decline in almost five years.
SOUTH AFRICA COULD
BE IN A TECHNICAL
RECESSION CURRENTLY
Statistics SA announced that South
Africas gross domestic product (GDP)
shrank by 0,6% in the first quarter of
the year, marking the first decline since
2009, largely as a result of a decline
in productivity in the mining sector as
ongoing strike action weighed heavily.
Recently, the World Bank also cut its
growth forecast for South Africa to 2%
this year.
South Africa could be in a technical
recession currently and while the
main contributor to this decline in
economic growth is the mining sector,
this demonstrates the fragility of the
economy. Other sectors, including
manufacturing and service industries,
are also coming under pressure,
raising concern for small businesses,
particularly those that service these
industries.
On the issue of government support,
small-business owners have grown
increasingly pessimistic with a reading
of 2,1, down by 0,1 from the previous
quarter, and from 3,0 in the same
period measured a year earlier.
However, they have listed improvement
of the economy as one of the main
areas in which they would like more
government support, alongside factors
such as a reduction of red tape and tax
rebates for small businesses.
As a continued supporter of small
business, Nedbank welcomes the
establishment of the Ministry for Small
Business Development as a valuable
means to address this concern and
we look forward to collaborating
with government to help create an
environment where small businesses
can thrive.
Small businesses also noted that the
health of their cash flow fell from 5,3
in the last quarter to 4,9 in the first
quarter of 2014 the lowest level
since the inception of this survey. This
is impacting on expectations among
small businesses regarding their capital
expenditure over the next year.
The index showed that the number
of small businesses that have made
capital expenditure over the past
12 months fell to 50%, the lowest
reading to date, while the number of
companies expecting to make capital
expenditure in the next 12 months
also fell to below 50% for the first
time.
The majority of businesses that are
considering capital expenditure plans
over the next year expect to fund
this activity largely through business
revenues (53%), rather than credit
(38%), indicating that economic
concerns are translating to more
conservative decisions regarding credit.
That said, the number of companies
considering credit has picked up in
recent months while ease of access
to finance remained constant from
the previous quarter at 4,0, with the
affordability of finance increasing
slightly to 5,8 from 5,6.
Overall, while concerns remain about
the economy and business owners
own financial situation, it is positive
to note that a significant number
of businesses surveyed are still
considering expansion, both through
their own revenues, as well as through
funding by commercial banks. We
believe for this optimism to bear fruit it
is critical that all role players, including
government, work symbiotically to
address the issues in the NSBI as well
as enable sustainable growth of the
sector. This will stabilise and grow the
economy while creating much-needed
jobs in our country.
COVER AUGUST 2014
2014/07/18 3:13 PM
Untitled-1 1 2014/07/18 3:37 PM
 Financial Planning
Securing a
wealthier future
ARNOUD VAN DEN BOUT,
COO: OneLaw
When still young, you should
think realistically about the time
you have to accumulate wealth.
This means finding out how
much you have to save or invest
every month to secure your
future, and then be disciplined
about it.
One mistake young people make
in financial planning is that they
overestimate the time they have
available for long-term saving and
investing. The other is to take up
unnecessary credit. Combined, these
two factors make it difficult to succeed
in long-term financial planning.
It is lovely to be young, healthy and
strong, and you think it will last
forever. To think of money matters
over the long term is difficult when
retirement seems so very far away.
The young enjoy life and think they
can wait a couple of years and then,
over time, pay a bit more into that
retirement fund. They are unwilling
to put away even a small amount
of money every month to make a
start towards a life-long savings and
investment plan.
Once older, they come to realise that
it is very difficult to make up for what
you neglected to do before.
Jannie Mouton, who started the PSG
Group, gave an excellent example of
how money can grow and work for
you in his book And Then They Fired
Me. If you save R1 000 per month and
escalate this amount with 10% per year,
you can end up with R57 million 40
years later, if you can invest it wisely
at a growth of 15% per year. If you
invest that same amount and achieve
growth of 20% a year, you will have a
whopping R186 million after 40 years.
This is why young people should not
delay in getting their finances in order.
88
Aug 14.indd 88
Money management mistakes are
largely due to a lack of personal
financial education. Young people learn
by example, and often by parents who
make their own mistakes.
This is quite an issue in South Africa.
The National Credit Regulators
December 2013 report shows that
only 38% of all credit-active people in
South Africa are up to date with their
credit agreements. Around 12% have
credit records impaired by judgements
or administration orders, and about
20% of credit-active people are more
than three months in arrears.
ABOUT 20% OF CREDIT-ACTIVE
PEOPLE ARE MORE THAN THREE
MONTHS IN ARREARS.
To learn more about money
management, it is important to
start with oneself. Everybody has a
responsibility. Earning an income, one
has to really plan how to use it. To
take responsibility for that is a good
starting point:
Draw up a budget and live by it.
A budget is of no use otherwise.
Manage down your debt, especially
the unnecessary debts. Be
aggressive about it, dont allow
yourself to make excuses.
If debt collectors are knocking on
the door, use them to help solve
the problem and get back into the
game. Some debt collectors make
use of emolument attachment orders,
which can be an excellent tool to
help you repay what you owe.
Of course, there are two kinds of
debt: good and bad. Some would say
items like a house or a car, things
that we all need to build a good life
over the years, constitute good debt.
Bad debt would be buying on credit
unnecessarily, like keeping clothing or
pharmacy accounts. To take this one
step further, it is important to look at
the interest rate one is expected to pay
and the amount that the instalments
come to. The point is that if a debt
is too expensive for you, it is a bad
debt. If you can pay it off easily while
sticking to your budget that would be
good debt. Also consider what would
happen were you to lose your income
today would you still be able to
service those debts?
PERSONALLY I APPLY FOUR
PRINCIPLES TO MY FINANCES:
Save more. Open a savings account
to put an emergency fund in place.
Look at accumulating an amount
equivalent to three months earnings.
Live within your means. Stick
to your budget. This applies to
everyone, whether you are the
president of your country or a cleaner
in a company. This includes paying
your bills in time and being wise
about your expenses. Shop around
for the best deal before you decide,
also with relation to taking on an
insurance policy or taking out a loan.
Let money work for you instead
of the other way around. This
means investing your money
on an ongoing basis so that
interest can make it grow.
Protect what you have. Read your
bank statements and make sure all
is in order and that no unauthorised
amounts are leaving your account.
Have a look at your credit record
you can do so once a year for
free by approaching some credit
bureaus. Knowing the state of your
credit record might give you an
entirely different view of where you
stand financially. Lastly, draft a will
so you know what will happen to
your assets should you pass away.
In conclusion, another wise word from
Jannie Mouton: If you want to sit in
the shade of a tree, rather plant it early
so that one day you can sit beneath it.
Our youth would do well to take heed
of this.
COVER AUGUST 2014
2014/07/18 3:13 PM
 Think big for long-
term investment gains
Investors are continually told
they should think long term, but
thats only half the story. For
improved returns they should
also think BIG.
The investment tip comes from Chris
Botha, Senior Fund Manager at Imara
Asset Management South Africa.
Results are often secured by big-
picture strategies that only look
contrarian when viewed in the context
of short-term market shifts.
The flagship Imara Equity Fund has
achieved one-year returns of 25,7%
and annualised three-year returns
of 20,6%. Many core holdings were
selected because big-picture thinking
indicated structurally driven growth
potential.
The big themes for me are consumer
market growth, industrialisation and
urbanisation. As families move to
the cities they need homes, cars and
appliances. City planners have to invest
in roads, housing, electrification and
infrastructure.
The Future of Finance
The CFA Institute is an organisation
with the stated mission to lead the
investment profession globally by
promoting the highest standards of
ethics, education, and professional
excellence, for the ultimate benefit of
society.
The institute is a not-for-profit
organisation, with a global head office
based in the US. The local South
African Society, like hundreds of others
around the globe, is represented by
volunteers who serve the organisation
and its members alongside their
regular day jobs. The members of
the institute aspire to belong to an
organisation that serves all finance
professionals seeking education,
knowledge, professional development,
connection, and inspiration, and aim
COVER AUGUST 2014
Aug 14.indd 89
This creates a five-, 10- or 20-
year underpin for some resources,
construction, retail counters and
services like banks. Select strong
players in those categories whose
managers invest in long-term growth
and you improve your chance of solid
returns perhaps not every quarter,
but over the long haul.
Chinas rate of urbanisation, according
to a UN report, topped 50% in 2011,
with no let-up in sight. In the next two
decades 310 million more people are
expected to migrate to new Chinese
towns and cities.
The UN says by 2050 the number
of urbanites will rise 75%. By mid-
century, 68% of the world population
will be urbanised, with most growth
coming from Africa and Asia.
Urbanisation is a huge driver, so is
Africas growing consumer spend.
Several years ago, smart strategists
in some local banks and retail groups
invested in this theme. Today, these
Africa-facing companies derive
substantial income from these
investments and share prices have
risen accordingly.
to lead the investment professions
thinking in the areas of ethics, capital
market integrity, and excellence of
practice.
To this end, the CFA Institute has
launched The Future of Finance
initiative, a long-term global effort to
shape a trustworthy, forward-thinking
financial industry that better serves
society. It provides tools to motivate
and empower the world of finance to
create an environment where investors
interests come first, markets function
at their best, and economies grow. Its
success is driven by on-going input
from an advisory council of prominent
global leaders and others in the
financial community. The CFA Institute
emphasises strategic initiatives with
respect to three components:
Big-picture thinking evens the playing-
field for small investors. Share analysts
spend hours examining company
reports, focusing on tiny pieces of data.
This work is necessary, but the average
person is not qualified for it.
But the average guy can follow the
big issues published in well-regarded
newspapers and periodicals. You are
in a position to benefit if you think
big and make sensible connections
between macro, structural issues and
companies well placed to respond.
Another advantage enjoyed by
the small investor is stickability.
Internationally, some big fund
managers increasingly behave like
short-term traders. Yields are very
low in Europe and the US. Investment
professionals are under pressure to
increase yield and are often measured
quarterly.
The small guy who makes sensible
allocations based on strategic themes is
not under this pressure. He can sit out
the trading shifts. Returns might be hit
when international money floods out of
our market. But that creates a buying
opportunity. Rewards mount when the
big boys return.
Small investors commit thousands, not
billions. But in relative terms they can
still score big if they think big.
NERINA VISSER,
VP of CFA Society of South Africa
Broader Mission: extend our promotion
of ethical and trustworthy investment
markets and services, and education
for investment professionals and other
market participants.
Bolder Voice: provide a global voice for
an effective investment industry that
reflects our values.
Bigger Community: broaden and
re-balance our global reach with
those working in or using the financial
markets.
In keeping with the focus on continuing
education, we look forward to bringing
the readers of Cover magazine a
regular feature on the latest insights
and learnings from the global finance
industry, as represented by members of
the CFA Institute.
89
2014/07/18 3:13 PM
 COVER Excellence Awards

COVER Excellence Awards

COVER presented the annual COVER
EXCELLENCE Awards at The 2014 Insurance
Conference Allianz Gala and COVER Excellence
Awards Dinner at Sun City on 29 July 2014
The purpose of the COVER EXCELLENCE Awards is to recognise individuals
for extra-ordinary effort and dedication to an industry aimed at improving the
financial security of consumers. These awards acknowledge individuals who have
made a significant contribution to the effectiveness and reputation of our industry.

The winners of the 2014 COVER Excellence awards

Rene Otto Peter Atkinson Willem Theron
2014 Lifetime Award for 2014 Award for recent 2014 Lifetime Award for
excellence in service to Short- excellence in service to Life excellence in service to the
term Insurance Risk Intermediary Environment

Suzette Olivier Louis Fivaz Gavin Came

2014 Award for recent 2014 Lifetime Award for 2014 Award for recent
excellence in service to Short- excellence in service to excellence in service to the
term Insurance Underwriting Management Intermediary Environment

Adrian Gore Mitch Marescia Junior Ngulube

2014 Lifetime Award for 2014 Award for recent 2014 Lifetime award for
excellence in service to Life excellence in service to excellence in service to the
Risk Underwriting Management Reinsurance Industry

RENE OTTO up the founding of OUTsurance, where

Rene is the Chief Executive Officer of
MiWay Insurance Limited.
He achieved a BLC LLB at the
University of Pretoria and later his
LLM at UNISA. He is also an Admitted
Advocate of the Supreme Court.
After spending the early part of his
career as a State Advocate, Ren
entered the private sector in 1988
where he spent eight years with
Auto & General. At the time, Auto
& General was the only direct player
in the short-term insurance market.
Shortly thereafter, Ren was requested
by RMB Holdings to create the
blueprint for OUTsurance. He headed
he partook in the pioneering of the
world-first OUTbonus concept, and
held the position of Managing Director
of OUTsurance for a total involvement
of five years. Ren was the CEO of
Channel Life from September 2004
till June 2007, a medium-sized
life insurance company, where he
extended his track record of building
sustainable businesses in the insurance
industry.
On request of Sanlam, Santam and
PSG, he embarked on developing the
blueprint for MiWay, a direct financial

90 COVER AUGUST 2014

Aug 14.indd 90 2014/07/19 9:50 PM

 services business, in July 2007. MiWay
launched in February 2008 with yet
a number of industry firsts, i.e. the
first to offer the purchase of short-
term insurance on-line, and the first
to offer a rewards programme where a
claim does not invalidate the rewards
pay-out. MiWay Insurance has grown
to a medium-sized insurer in only five
years. Ren also recently joined the
South African Insurance Association
(SAIA) Board.
***
SUZETTE OLIVIER
General Manager: Legal at The South
African Insurance Association since
October 2010.
Suzette is responsible for the following
at SAIA:
Providing meaningful information
on legislation and the regulatory
framework as well as the
practical consequences that
follow their implications for the
short term insurance industry
Participating in legislative and
regulation processes at all levels,
and with all role players,
Drafting industry submissions
on published legislation
Drafting contracts, policies and
supplying legal opinions
Identifying the key objectives
for various Board Committees
Drafting of Board Reports and
Board Papers for the SAIA Board,
the SAIA Board Committees:
Governance and Reinsurers
Suzette interacts and liaises with
various stakeholders including SAIA
members, The South African Crime
Bureau (SAICB), The Ombudsman for
Short-term insurance (OSTI), as well
as representative bodies such as the
COVER AUGUST 2014
Aug 14.indd 91
Financial Intermediaries Association
(FIA), the Association for Saving and
Investment (ASISA) and Business
Against Crime (BACSA), National
Treasury, The Department of Mineral
Resources and The BRICS Reinsurance
Project.
INVOLVEMENT WITH FSB/
TREASURY RELATIONS
Twin Peaks Roadmap,
Microinsurance, FSB Reinsurers
Regulatory Review, and Solvency
Assessment Management (SAM)
Financial Services Laws General
Amendment Act, Short-
term insurance Act, Financial
Advisory and Intermediary
Services Act, FAIS and POPI
***
ADRIAN GORE
Adrian Gore is the founder and Group
Chief Executive of the Discovery
Group of companies.
He launched Discovery in South
Africa in 1992, with a simple and core
purpose of making people healthier
and enhancing and protecting their
lives. Discovery has since evolved into
a diversified and multinational financial
services group. Discovery is widely
acknowledged as a global thought
leader in wellness behavioural change
and its integration with health, life and
short-term insurance.
Since listing on the JSE in 1997,
Discovery expanded its international
reach to the United Kingdom, United
States, Australia and Asia generating
total income flows in excess of $5
billion.
Adrian graduated from Wits University
in 1986. He is a Fellow of the Actuarial
Society of SA, a Fellow of the Faculty
of Actuaries (Edinburgh), an Associate
of the Society of Actuaries (Chicago),
and a member of the American
Academy of Actuaries. In 1998, Adrian
was recognised as South Africas Best
Entrepreneur by Ernst & Young, and
in 2004 was chosen as South Africas
leading CEO in the annual MoneyWeb
CEOs CEO of the Year Awards. In 2008
he received the Investec Award for
Considerable Contribution in a Career/
Profession, and in 2010, was named as
the Sunday Times Business Leader of
the Year.
Adrian chairs the SA chapter of
Endeavor a global non-profit
organisation that identifies and assists
high-growth entrepreneurs. He sits on
the WEF Global Health Advisory Board,
the Columbia University Mailman
School of Public Health Board of
Overseers and on the Massachusetts
General Hospital Global Health Advisory
Board, whose mandate is to enhance
care for the worlds most vulnerable
populations, as well as to educate and
prepare the next generation of health
leaders and educators.
***
PETER ATKINSON
Born in 1952 Peter was educated at
St. Albans College in Pretoria, the
University of Cape Town and UNISA.
Following a lengthy spell with the
Anglo American/Southern life group,
during which he rose to head up the
individual life marketing operation, he
joined the Saflife group of companies
as marketing director, with additional
responsibility for human resources and
strategic development. In 1994 he left
the group to branch out on his own
as a management consultant, where a
contract to develop the markets of the
Insurance Institute of South Africa led
to a permanent appointment in 1996.
In 2008 Peter joined the Financial
Intermediaries Association of Southern
Africa (FIA) as National Technical
Portfolio Manager.
91
2014/07/19 9:50 PM
 COVER Excellence Awards
Peter has been elected as a Fellow of the
Chartered Insurance Institute in London,
is a Certified Financial Planner (CFP),
and is a Fellow of the Insurance Institute
of South Africa. He holds several other
qualifications including a Diploma in
Datametrics and an internationally based
MBA.
Peter is a well-known figure in the
industry, having been involved in all
issues technical, where he provides his
knowledge to whoever requires technical
input. His vast knowledge in the Life
and short-term space has been shared
with the industry over more than three
decades. He also served as a member of
the inaugural National Standards Body
when the South African Qualifications
Authority was set up in the 1990s, was a
member of the ILPA publicity committee
for more than a decade, and has
served on the editorial board of COVER
Magazine for nearly 20 years.
***
LOUIS FIVAZ
Started insurance career in
1981 at Santam, working in
the Claims Department.
Moved to Commercial Union
in 1984, worked in the
Underwriting Department.
Joined National Employers in
1986, worked as an Inspector.
Joined Hollandia (now Hannover
Re) in 1990. Worked as Branch
Manager of the Pretoria Branch.
Joined CTU on 1 April
1993, appointed at CTU
as General Manager.
Louis is also an Associate of
the Insurance Institute of South
Africa and a Senior Associate of
the Australian and New Zealand
Institute of Insurance and Finance.
92
Aug 14.indd 92
KEY SUCCESSES:
Has revelled in working in the
insurance industry and would do it
all over again if he had the choice.
Suited his entrepreneurial spirit and
rose to the challenge of making
a success of an industry where
many competitors have found it
impossible to manage the loss
ratios. Enjoyed tackling the unique
challenges of the industry.
Relationships are critical success
factors in this market, strong focus on
BEE and empowering black brokers as
well as other leaders in the industry.
***
MITCH MARESCIA
In just 13 years, Camargue co-
founder and CEO Mitch Marescia, has
transformed a relatively small startup
underwriting business into one of South
Africas most successful niche insurance
underwriting agencies. Prior to starting
Camargue, he enjoyed first-hand
the challenges of managing his own
business, MGM Corporate Solutions.
His experience preceding MGMs launch
was grounded at AIG where his initial
position was that of Financial Controller
and Company Secretary. With a growing
list of responsibilities Marescia was
soon promoted to Vice President of
Operations and Company Secretary.
The knowledge he has gleaned during
his extended exposure to the intricacies
of the industry have well positioned him
for his leadership role of the greater
Camargue Group. Focused on growing
the business, Marescia is steering the
strategic and sustainable direction of
Camargue. He is heavily involved in
exploring opportunities in Africa, while
also securing new local and international
partners. A man with great vision,
he is passionate about the industry,
empowering people and starting new
businesses.
His love of this country and its people,
and his constant striving to uplift South
African society, is engrained in the
culture he has determinedly fostered
within Camargue. A non-conformist, his
energy, razor sharp focus and invested
leadership style, will undoubtedly
carry the business forward for another
excitingly successful decade in the
insurance industry.
***
WILLEM THERON
Willem Theron, BCompt (Hons), CA(SA)
founded PSG Konsult Limited in 1998
and served as its Chief Executive
Officer until June 30, 2013. Theron
serves as Chief Executive Officer of
PSG Konsult Group. He has been the
Chairman of PSG Konsult Limited since
1 July 2013 and has been its director
since 1 March 1998. He has been
Non Executive Director of PSG Group
Limited since 7 March 2006. He has
been a Non Executive Director of PSG
Group Ltd and PSG Financial Services
Limited since 2 March 2006.
He qualified as a Chartered Accountant
in 1976 and started the chartered
accountancy firm, Theron du Plessis,
in 1976 in Middelburg Eastern Cape,
which in 1998 had 10 offices in the
Western and Eastern Cape. He obtained
his BCom degree at the University
of Stellenbosch and BCompt (Hons)
through the University of South Africa.
He did his articles in Stellenbosch at the
current firm of PricewaterhouseCoopers.
***
GAVIN CAME
During his career in Financial Services,
Gavin worked with the Liberty Life
Group for 19 years. As Senior General
Manager Marketing, he headed the legal
and marketing divisions of the group.
In this role he oversaw the operations
of Libertys then 1,300 strong agency
COVER AUGUST 2014
2014/07/19 9:51 PM

force as well as the broker and pensions
marketing divisions. He served on the
boards of Oracle Employee Benefits
Consultants (Pty) Ltd, Liberty Ermitage
Asset Management (Jersey) Limited,
Liberty Healthcare (Pty) Ltd and on the
Liberty Groups Investment Strategy
committee. He also served as a trustee
of the Liberty Group Pension Fund and
The Liberty Foundation.
After two years as MD of Liberty
Collective Investments Ltd and
overseeing its re-branding as Stanlib,
Gavin acquired his own financial
planning business in 2002. In 2006 the
business was sold to Sasfin where Gavin
served as the CEO of Sasfin Wealth, the
Stock Broking, Asset Management and
Financial Planning businesses of Sasfin
Bank. He was an employer nominated
board member and Chair of the board
of management of the Sasfin Groups
Retirement Fund. In 2011 Gavin stepped
down as CEO and after two years as a
Consultant to Sasfin Wealth he remains
a registered Financial Planner to a group
of its clients whose combined assets
approach R500million. He serves as one
of their Key persons and is a registered
compliance officer. Gavin and his wife
Lucille have acquired the Historic Pig
and Whistle Inn the oldest licensed pub
in South Africa.
Gavin has served on the Policyholder
Taxation and Intermediary Liaison
Committees of the Life Offices
Association and the sub-committee,
which drafted, with the government,
the current Long-Term Insurance Act.
Gavin is currently a board member of
FIA and chairs their Financial Planning
sub-committee. He recently served
as chief spokesman for the combined
intermediary bodies in discussions with
Treasury regarding contractual savings
and regularly represents intermediaries
in discussions with the regulator. Gavin
has written extensively for publications
and appeared as a guest on many
Personal Finance chat shows.
***
COVER AUGUST 2014
Aug 14.indd 93
JUNIOR NGULUBE
Junior Ngulube has been with Munich
Re of Africa Limited, the largest
professional reinsurer in Africa since
1987, where he has been serving as the
Chief Executive Officer since 2007.
AMONG JUNIORS VARIOUS
ACADEMIC QUALIFICATIONS ARE
THE FOLLOWING:
M Agric (Ext Ed), Pennsylvania State
University, USA.
Diploma in Financial Management,
Damelin.
Insurance Executive Development
Programme, Wharton Business School,
University of Pennsylvania.
A FEW OF JUNIORS MAJOR
ACHIEVEMENTS:
1000 CEOs : Selected as one
of the top 1000 CEOs in the
world, in the book 1000 CEOs
edited and published in the
U.K. by Andrew Davidson.
MRoA has for over 7 years
maintained its Standard of Excellence
Achievers status in the Deloitte Best
Company to Work For Annual Survey.
During the Changing Gear
Initiative, MRoA produced one of
the best Employee Satisfaction
results among participating units
of the Reinsurance Group.
Junior has led many industry bodies
including being past President
of the IIG, past Chairman of the
Insurance Industry Employers
Association (SA) and currently
President of the IISA and EXCO
member of the continent wide
African Insurance Organisation.
Production of the With Africa
For Africa publication in 2012,
highlighting the development of
insurance across the continent, and
Production of Business as Unusual,
the story of Munich Re in Africa, in
2013, which speaks to the industry
in South Africa since 1968.
Juniors passion for encouraging
diversity in the industry and in the
Munich Re Group, has resulted in him
working with the Chairman of the MR
Board on a project to promote diversity
within the Group on a global basis.
Junior is a professional member of the
Zimbabwe Institute of Management
Gamma Sigma Delta, The Honour Society
of Agriculture (USA) in recognition of
high scholarship and an Associate of the
IISA.
COMMITTEE MEMBERSHIPS
Executive Committee Member:
Organisation of Eastern and Southern
Africa Insurers (up to 2003)
Council Member, Insurance
Institute of Gauteng (to 2005)
President of the Insurance Institute of
Gauteng (2002/3)
(first black president since 1912!)
Chairman of the Board of the
Insurance Industry Employers
Association (to 2004)
Short-Term Insurance Advisory
Committee of the Ministry of
Finance, South Africa. ( to 2011)
BOARD DIRECTORSHIPS
Munich Reinsurance Company
of Africa Limited
Munich Mauritius Reinsurance
Company Mauritius (Chairman)
Swaziland Royal Insurance
Corporation Swaziland
Credit Guarantee Insurance
Company South Africa
Insurance Institute of South
Africa President and Director
African Insurance Organisation
Exco Member
South African Insurers
Association (resigned in 2011
on a matter of principle)
Finsure Pvt Limited -
Zimbabwe (to 2005)
93
2014/07/20 9:04 PM

Still, like dust, Ill rise
You may write me down in history
With your bitter, twisted lies,
You may trod me in the very dirt
But still, like dust, Ill rise.
- Maya Angelou
This month we celebrate the power and courage of women in
South Africa, and at the same time we mourn the passing of a
literary icon, Maya Angelou, whose powerful words serve as
a prophesy for the liberation of Africa: like dust, Ill rise.
In the words of those women who fought for our freedom on
9 August 1956, WathintAbafazi Wathintimbokodo! (Now
you have touched the woman, you have struck a rock!)
Empowering women,
empowering Africa
Outstanding rural women
entrepreneurs were awarded their
graduation certificates at a ceremony
held at Constitution Hill, following an
intensive training initiative provided by
PwC to build up the business skills of
women from previously disadvantaged
communities.
Annually PwC builds the skills of more
than a hundred underprivileged women
from rural areas throughout the country
through the Business Skills South Africa
(BSSA) foundation to provide business
and entrepreneurial skills to previously
disadvantaged communities in order to
create jobs, to promote sustainability
and increase revenue streams.
In 2006 PwC extended this initiative
Shirley Machaba, PwC South to rural women in business through
a project called the Faranani Rural
Africa Board Executive
Women Training Initiative. The aim
Chairman, Faranani Rural of this project is to train women from
Women Training Initiative rural communities in business skills.
National Director, and Partner in PwC is committed to the upliftment
Charge of the PwC Menlyn office of women in South Africa and firmly
94
Aug 14.indd 94
Ju
W
Ju
St
believes that by inculcating a culture
of entrepreneurship among women, it
can help to empower them to generate
their own income.
Women play a meaningful role in
the development and growth of the
economy. Through the Faranani
Training Initiative rural women are
trained and skilled on different topics
and issues that will enable them to
become entrepreneurs.
Skills development is core to South
Africas economic growth. The
government has identified skills
weaknesses as one of its targets and is
addressing the issue through a number
of initiatives, such as the National
Development Plan. PwC are intent on
making a difference by empowering
women.
Small businesses form the backbone
of the South African economy, and
women own a significant number
of these enterprises. The Faranani
initiative supports women who want to
become business owners, by providing
them with the knowledge to start and
actively manage their own businesses.
Over several days, the women are
taught how to develop a business
plan, which is supported by financial
projections, financial management,
COVER AUGUST 2014
2014/07/18 3:13 PM
 Africa Rising
Just like moons and like suns,
pricing and costing, practical marketing,
and business management.
With the certainty of tides,
Aftercare support is also provided
on completion of the training. BSSA
monitors the womens business plans
Just like hopes springing high,
and provides ongoing support.
Presently there is a high failure
rate among black-owned start-up
businesses, which is largely due to
Still Ill rise.
a lack of finance and other business
support. The project aims to address
the lack of training in business
skills and the lack of financial and
entrepreneurial experience that so
many people do not have.
PwC established the Business South
Africa (BSSA) foundation in 1992 to
provide business and entrepreneurial
skills to previously disadvantaged
communities. Annually, PwC
Caring for mother and
child through technology
According to the Philips Fabric
of Africa trends report, women
in Africa are at significant risk of
premature death, with particular
high mortality rates recorded in
pregnancy.
Women in semi-urban and rural
areas across Kenya (in fact all of
Africa) often die due to preventable
COVER AUGUST 2014
Aug 14.indd 95
contributes R1,7 million towards
this foundation. To date, BSSA
has successfully trained 40 000
entrepreneurs. This however excludes
an average of R500 000 that is spent
per year on the Faranani Rural Women
Training Initiative.
The project was rolled out in the
whole country, and the first pilot
project started in the Limpopo
Province in November 2006.
Subsequently the project took off,
with various stakeholders assisting
in the recruitment of trainees.
Stakeholders included, among others,
the Department of Trade and Industry
(DTI), South African Local Government
Association (SALGA); The Presidency;
Department of Social Development;
and the Department of Cooperative
Governance and Traditional Affairs.
complications during child birth as
they have no access to ultrasound
screenings to detect critical
conditions. Many of these deaths
can be diagnosed with basic imaging
technology.
Royal Philips unveiled a mobile
ultrasound system called VISIQ on 18
June 2014 in Nairobi, Kenya during the
Nairobi leg of its annual pan-African
Cairo to Cape Town Roadshow.
Several municipalities throughout
the country also assisted with the
recruitment of trainees, such as the
Musina Local Municipality and Giyani
Local Municipality in the Limpopo
Province. The Ithala Development
Finance Corporation and UThukela
District Municipality provided
assistance in KwaZulu-Natal. In 2011
the Mpumalanga Department of
Agriculture, Rural Development and
Land Administration were the hosts
providing the trainees. The Dr Ruth
Segomotsi Mompati District Municipality
provided recruitment in the North West
Province.
In Gauteng, PwC and BSSA worked
with the City of Johannesburg; City of
Tshwane; City of Ekurhuleni; Gauteng
Economic Propeller; and the Gauteng
Department of Rural Development.
The size of a tablet, the VISIQ is the
first ultra-mobile system from Philips.
It provides high quality images for
expectant mothers wherever care is
taking place.
Maternal screening allows for early
detection of complications
VISIQ is portable, easy to use, and
available for expectant mothers in
remote areas who wouldnt otherwise
have access to this type of innovative
technology. Improving access to
healthcare is high on the Philips
agenda in Africa. VISIQ allows clinicians
to provide ultrasound in a variety of
clinical environments, offering soon-
to-be parents the comfort of having
regular pre-natal check-ups.
DESIGNED FOR THE NEEDS OF THE
KENYAN MARKET
According to the World Health
Organisation (WHO), diagnostic imaging
is crucial in healthcare. Many countries
in the developing world cannot afford
to purchase expensive high technology
imaging equipment, despite the urgent
need to use imaging resources in these
countries. There is a
95
2014/07/18 3:13 PM
 Africa Rising
You may shoot me with
growing global focus on cost effective
your words,
systems, smaller footprints and imaging
equipment that is easier to operate,
but has improved clinical functionality.
You may cut me with
Small outpatient clinics or community
centres can carry out comprehensive
obstetric and abdominal scans
themselves rather than referring
patients to regional ultrasound centres.
your eyes,
This enables fast diagnosis and
treatment. Approximately 10 times
smaller than a traditional ultrasound
machine and with reduced energy
You may kill me with
consumption, VISIQ can also be used
in community care programmes in
remote rural areas for screening, triage
and fetal well-being scans, all of which
your hatefulness,
helps to address the critical issue of
maternal and infant care in Kenya.
MATERNITY SCREENING CAMP
TO ENABLE EARLY DETECTION OF
But still, like air, Ill rise.
COMPLICATIONS
Philips organised a maternity screening
camp during the Cairo to Cape Town
roadshow with African Medical and
Africans urged to
invest in agriculture
As the 23rd African Union (AU)
Heads of State and Government
Summit was underway on 26
June 2014 in Malabo, Equatorial
Guinea, ONE.orgs Do Agric Maputo promise to invest at least 10%
petition which calls on
African leaders to recommit to
spending at least 10% of national
budgets on effective agriculture
investments had gathered
more than two million signatures
of support from African citizens
across the continent.
The petition was hand delivered to a
number of Heads of State, including
South Africas Minister of Agriculture,
Forestry and Fisheries, Senzeni
Zokwana.
ONE.org officially launched its Do
Agric, It Pays campaign on 20 January
2014 along the margins of the 22nd
96
Aug 14.indd 96
Research Foundation (AMREF) in
Kibera; the largest informal settlement
in Nairobi. For a majority of the
expectant mothers in this community,
this screening camp was their first ever
opportunity to have a scan. This ensured
that any complications are detected
in advance of labour. Philips provided
ultrasound equipment, including the
VISIQ system and clinical specialists for
the camp, whereas AMREF, through its
referral programme with the local public
hospitals, took care of any complications
detected during the screening.
Philips organised a roundtable
discussion as part of its Fabric of
Africa campaign on the topic of
Innovations in Rural Healthcare and
organised clinical training workshops
on topics including fetal monitoring,
infant warming, jaundice management
and clinical ultrasound. Over the course
of three days, Philips trained close to
120 local healthcare professionals,
increasing the quality of healthcare
workforce in Kenya.
Ordinary Session of the AU Summit
in Addis Ababa, Ethiopia, in support
of the 2014 AU Year of Agriculture.
The campaign encourages African
governments to keep their 2003
farmers, adding that your campaign
of national budgets in agriculture,
and makes a case for better strategic
policies and transparent public
investments that will better support
smallholder farmers, especially women,
and lift millions of Africans out of
poverty.
Receiving the petition on 10 June in
Dar Es Salaam, Tanzania, President
Jakaya Kikwete said:
I will champion this cause at the AU
Summit. I will present this petition
to the other Heads of State. We as
African governments cannot succeed
in taking agriculture forward unless we
modernise it, instead of our people
continuing to use the hand-held hoe
and other farming implements from
pre-biblical times.
THE FIFTH PAN-AFRICAN CAIRO TO
CAPE TOWN ROADSHOW
Nairobi is the fourth stop on Philips
annual flagship Cairo to Cape
Town Roadshow from 14 April to
3 September 2014. The roadshow
focuses on two key challenges facing
Africa today the need for energy-
efficient lighting and the revitalisation
of African healthcare infrastructure.
Philips remains consistently committed
to reducing child mortality and
improving maternal health linked
to the current UN Millennium
Development Goals four and five
(MDGs). In contribution to the Post-
2015 Development Agenda, Philips
calls for improving universal access to
healthcare and reducing the double-
disease burden of communicable and
non-communicable diseases (NCDs)
as additions to the current MDGs. The
roadshow will make its way across
seven countries and 10 cities in Africa.
Ghanas President John Mahama
accepted the petition in Accra, Ghana
on 20 June. He hailed the initiative
and reiterated Ghanas commitment
to improving the lives of smallholder
is preaching to the converted as we
in Ghana are already stepping up the
policies and investments in agriculture.
In April, Dbanj and 18 artists
representing 11 different countries
came together to record the single
Cocoa na Chocolate in support of the
Do Agric campaign.
During the week of 26 June ONE.org
and 120 partner organisations from
across the continent released an open
letter addressed to AU Heads of State
reminding them of their 2003 promise
to end hunger and extreme poverty
for millions of Africans by 2024. The
partner organisations also laid out
10 joint policy recommendations to
accelerate economic development on
the continent through an African-led
COVER AUGUST 2014
2014/07/18 3:13 PM
 Risk credibility

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Untitled-1 1 2014/07/18 3:38 PM
 Africa Rising
agricultural transformation agenda
steered by the AUs own CAADP
(Comprehensive Africa Agriculture
Development Programme).
ACCORDING TO THE
RECOMMENDATIONS, AU MEMBERS
SHOULD:
Adopt a target-based timeline
towards reaching the AU 2003
promise to dedicate a minimum
of 10% of the annual budget for
agriculture and create a mechanism
for monitoring progress.
Commit to making investments
that increase the support for small-
scale producers, which include
investments in hard infrastructure,
technologies, research, extension
services, information services
and end post-harvest losses.
Commit to implementing quality
focused agriculture budgets
and services that are clear and
transparent to farmers and citizens.
Adopt measures to eliminate the
gender and youth gap with respect to
access to finance, land, technology,
and training and extension services
as well as markets access.
Adopt guiding principles on Large
Scale Land Based Investments that
will strengthen land governance
98
Aug 14.indd 98
and security of tenure rights for
small-scale producers and curb land
grabs through the implementation
of AU Framework and Guidelines
on Land Policy in Africa.
Adopt a mechanism for mutual
accountability and joint sector
reviews to account for progress
in ending hunger within the
CAADP result framework.
Adopt measures to reduce barriers to
domestic and intra-regional trade.
Adopt measures to integrate
sustainability and climate
resilience measures into national
agriculture investment plans.
Adopt mechanisms for preventing,
managing and monitoring the
recurrent food and nutrition crisis.
Adopt measures to ensure policy
making under CAADP is inclusive,
effective, transparent, mutually
accountable, and participatory.
If measures to support the 10
recommendations are adopted, partner
organisations expect the following
benefits for Africa by 2025:
Boosted yields for smallholder
farmers and a reduced food
import bill, which currently stands
at about $25 billion annually.
Increased food availability
for the 265 million Africans
who are under-nourished.
Increased intra-Africa trade
benefits, estimated to reach
$2 trillion by 2030.
Increased incomes for farming
families through reduced post-
harvest loss which is today
at $48 billion a year.
Increased food production and
agro-processing can provide
millions of jobs for African youth.
Dr Sipho S. Moyo, ONE.orgs Executive
Director for Africa, said:
There are real agriculture success
stories across the continent for
countries to build uponfrom Burkina
Faso to Ethiopia. If the continent
is going to go from what until now
has been termed jobless growth
to inclusive growth, then now is
the time for our leaders to commit
to a big push toward implementing
effective agricultural policies, scale up
public investment in agriculture and
catalyse private sector participation in
agriculture development.
COVER AUGUST 2014
2014/07/18 3:13 PM
 NEW MOBILE APP FOR
ALL SUBSCRIBERS

Powered by

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We are proud to announce the launch of an intelligent, intuitive app for COVER Magazine subscribers!

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Tel: 083 567 0757 | Fax: 086 642 6263 | Email: info@cover.co.za

Untitled-1 1 2014/07/18 3:39 PM

 African Insurance
Distribution &
th
4 Bancassurance
Conference

11 to 13 August 2014
Westin Hotel, Cape Town

Insurance Distribution
and the Data Revolution
Most insurers have now realised that
there is a data revolution going on in the
industry. Most companies are sitting on
vast, unexplored and under-utilised data
related to client demographics, financial
behaviour, telematics, machine-to-
machine communications and the, yet to
be tamed, social media platforms.
Now in its 4th year, COVERs African Insurance
Distribution Conference, will explore this data
revolution, mainly brought about by technology
and its insatiable capacity to collect data. We will
again see senior executives from 16 different
countries get together to discuss all facets of
insurance distribution and to network with a
view to finding new business opportunities.
Expect only the most trusted and well-known
expert presenters to share ideas and stimulate
debate that will see delegates leave with a fresh
understanding of the revolution happening in
their midst. To list but a few:
Johan Van Zyl - Chief Executive Officer,
Sanlam Group
Chris Hart Chief Strategist, Investment
Solutions
Ranjit Bedi - Director and Head of Insurance
Barclays Africa
Bruce Sahd Founder, CaseJohnson
Charmaine Scott - Standard Bank, Head
Bancassurance Africa
George Addison - MD, StarLife (Ghana)
Olusola Ajayi - Retail Business Lead, AIICO
(Nigeria)
Afua Boahemaa Donkor - Executive Director,
Star Microinsurance (Ghana)
Chris Hart, Chief Strategist - Investment
Solutions (SA
For further information
please mail: tony@cover.co.za

We look forward to hosting you at the most important

African insurance distribution event of the year

Bancassurance 14.indd 1 2014/06/18 1:09 PM

Untitled-1 1 2014/07/18 3:40 PM
 Right move. Right moment.
The conference will be taking place at the Westin Cape Town, for further
information on accommodation please visit: www.bancassurance.co.za
Having the right solution at that critical moment doesnt
just happen. It takes vision, commitment and experience.

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Bancassurance 14.indd 2 2014/06/18 1:09 PM

Untitled-1 1 2014/07/18 3:40 PM
 Technology
Nedbank celebrates 50
years of banking technology
FRED SWANEPOEL,
CIO at Nedbank
There have been a series of
innovations in the banking and
financial services sector. As a
bank, we recently celebrated
50 years of banking technology
and this provided us with an
opportunity to revisit the journey
travelled.
Twenty years ago Nedbank made
Microsoft its main distributed IT
infrastructure at the time most
institutions ran on an IBM platform.
Bill Gates personally travelled to South
Africa to seal the deal with Nedbank.
Nedbank was one of the first major
financial institutions globally to
implement a form of banking on a
cellphone, known as WAP banking.
It was the real precursor to the app
that we now have on our cell phones.
Other innovations included introducing
pre-paid options through electronic
channels rather than physical vouchers
something that has now become a
standard offering.
102
Aug 14.indd 102
NEDBANK IN HISTORY
Nedbank was the first to introduce
computerised banking services on 31
May 1964, when the Fox Street branch
became the first to go live on a NCR
computer. Many innovations followed,
including Nedbank being the first bank
BILL GATES PERSONALLY
TRAVELLED TO SOUTH AFRICA TO
SEAL THE DEAL WITH NEDBANK.
to introduce credit interest on the
current accounts in 1983. Four years
later, the introduction of NedInform
enabled corporate clients to do what
was then called Office Banking soon
followed by the NedExec launch, a
market leader that enabled Business
Banking clients to do the same.
MOBILE REVOLUTION
With the mobile phones revolution
in the late nineties, Nedtel Cellular
was introduced in 1997 under the
management of Nedbank Information
Technology.
Through the 2000s, Nedbank worked
towards integration and convergence,
making strategic investments in the
technology space including Net 1 and
DiData, and the mobile cellular arena.
A further highlight was the introduction
of certificate-based security to the
Nedbank Banking Platform in 2004,
a pioneering move in an era when
information security and protection
against fraud was critical.
END OF THE TECH BUBBLE
The bursting of the technology bubble
led Nedbank to refocus; consolidating
technology investments to reposition
on more internally focused efforts to
rebuild its core business.
Nedbank recently received the
Innovation in Banking award at the
2014 African Banker Awards. In 2013,
MTN also recognised the bank for its
Nedbank App Suite, which won the
Best Android Consumer App of the
year.
BRANCH OF THE FUTURE
Nedbank is fast tracking the movement
of banking technology into the future
through the launch of the Groups
innovative Branch of the Future.
This new branch format is designed
to facilitate sales and service through
the clients channel of choice. Features
include automated queues, multi-
functional service points, video banking
with subject matter experts and access
to technologies such as iPads, touch
screens, smart tables and video walls.
South African banks are recognised
internationally for implementing best
practices. It is critical to ensure that
the local banking industry remains on
top of the rapid changes in technology
trends.
Nedbank Group Technology has
adopted a more simplified technology
landscape, improved cost-efficiencies,
enhanced client experiences, shortened
time-to-market, and continued the
relentless pursuit of innovation. Our
most innovative years in banking
technology still lie ahead.
COVER AUGUST 2014
2014/07/18 3:14 PM
 Treating customers fairly?
Theres an app for that!
At the recent second annual
Insurance Regulation Conference
held in June 2014, Janet Ehlers
from the Financial Services Board
said that Treating Customers
Fairly (TCF) should not only be a
tick-box approach.

Representatives from Hollard Insurance

and Mutual & Federal, Michelle ONeill
and Michael Linake, demonstrated how
their companies have made TCF part
of the culture of the organisation, and
implemented it on all levels of the
business structure.

Kotive is a technology company that

has built a TCF application to help
insurers, brokers, intermediaries and all
stakeholders in the industry streamline
the implementation of TCF.

Kotive TCF is a web-based app that

anyone with a tablet or PC can access
through their internet connection.
Jean Gouws, TCF Project Manager at
Kotive, said, Weve put a lot of time
and effort into making sure that even
non-technical people can quickly learn,
understand and use it.
Gouws said: Kotive TCF has been
designed specifically to enable FSPs
to keep track of and manage their
TCF outcomes from product design, to
marketing, through advice, to servicing,
the handling of claims and complaints.
He said the app provides a full audit
history of gap ratings, tasks, discussions
and files uploaded as evidence. Teams
are able to see which outcomes need
attention and which outcomes have
been achieved, and they are able to
prove to the FSB that theyve treated
consumers in fairness.
Gouws said they realised that the new
TCF regulations could potentially create
new risks for FSPs. They know from
their experience in creating Kotive
Compliance and speaking to FSPs,
that they are already burdened by the
administrative load of compliance. We
believe we have a solution thats user-
friendly and easy to use and ideally
suited to solving this problem.
Kotive TCF is a platform where the
companys sentiments on TCF are
planted. Then through a process of
revisiting, discussions and suggestions
the company finds their unique path
to imbedding TCF. An initiator can
facilitate the entire process on Kotive
TCF Web-App and players interact
leisurely on-line. All progress is
captured in-app for all to revisit and to
ensure covered ground stays covered.
Gouws said: At this point there
emerges a specific logic to the process
and buy-in from players. Strategies
start to develop naturally; and organic
patterns start to become evident that
has its roots in the minds of the players
not forced in from the outside. Under
these conditions a company can profit
from TCF rather than TCF becoming a
burden or just another cost. This is the
true value of Kotive TCF.
Kotive is a platform that creates
custom workflows and software
solutions quickly through a drag-and-
drop user interface. The development
of such a meta-system to create,
manage and execute workflows
and software solutions is a complex
software engineering problem but all
the technical heavy-lifting is done in
Kotives core engine.
Gouws said: One of the benefits for
our TCF customers is that as we get
more feedback from them and as the
FSBs requirements become clearer we
can easily update and adapt Kotive TCF
to continue to solve their challenges
and be the go-to solution for TCF in
South Africa.
People can sign up and experience
the product for free for 30 days by
going to:
http://www.kotive.com/tcf. After
their trial period they can continue
using it at R60 per user per month.

COVER AUGUST 2014 103

Aug 14.indd 103 2014/07/18 3:14 PM

 Technology
Have you backed up
your files recently?
OLIVER POTGIETER,
Director, Alto Africa
On the back of recent research
conducted by Alto Africa,
a fascinating glimpse has
been taken into the data
backup habits of some of the
most regulated industries in
the country: the legal and
accounting professions.
What we found is that while most
practitioners have some measures in
place, information isnt universally well
protected and a small percentage
does nothing at all to safeguard their
data.
That should be seen in context. With
todays modern technology, there
should be little reason to lose any
information, should things go wrong.
Experience has proven to all of us, at
one time or another, that computers,
laptops, phones and desktop drives can
and do break. When they do, weve all
experienced the frustration and anger
at losing data yet, even with easy-to-
use solutions which virtually guarantee
never having to lose information again,
we dont use them.
104
Aug 14.indd 104
But what about accountants and
lawyers, who have a legal obligation to
store information for specified periods?
Overall, the levels of having something
in place are very good. The real
question is are they good enough
or are you using the best available
options? Typically, those in these
professions are backing up manually,
onsite. That leaves the business at risk,
for example, if a fire breaks out, or if
the designated person forgets to do it.
WE POLLED A SAMPLE OF 63
ACCOUNTANTS IN THE WESTERN
CAPE AND FOUND THAT:
While 85% back up both
data and emails, these are
typically done onsite.
Of these, only half perform backups
daily; 20% weekly; 11% monthly.
Almost 1% of respondents do
not perform backups at all.
40% personally backup their
data, while 25% leave it to IT
professionals. A further 20% could
not specify (they dont know
how their data is backed up).
Most backups are conducted
manually; 19% are done in the
cloud, 37% are done onsite
and 25% are done on both.
ALTO AFRICA POLLED 30 LEGAL
PROFESSIONALS IN THE WESTERN
CAPE. WE FOUND THAT:
While 90% back up both
data and emails, these are
typically done onsite.
Of these, half perform backups
daily; 27% weekly and 10% monthly.
20% personally backed up their
data, while 40% leave it up
to IT professionals. A further
10% could not specify.
Most backups are conducted
manually; 13,3% are done in
the cloud, 33,3% are done in
the cloud and 56,7% on both.
According to the South African
Institute of Chartered Accountants,
the regulations regarding retention of
records include that auditors data is
kept for five years after completion;
Close Corporation documentation for
up to 15 years; companies information
for seven years; and consumer
information/credit records for three
years.
The findings demonstrate that even in
the most regulated industries where
there are clear rules surrounding
information protection, the rigour
applied to backups is patchy.
And intuitively, we know that the
situation is likely to be far worse in
those industries where there arent
specific regulations for information
protection but one commonality is
that, regardless of vertical industry,
data loss hurts.
What happens when your computer
crashes and five years worth of
records go with it? According to
research conducted by BCN, 93% of
businesses that lose their data go out
of business within a year, and 50%
that lose their data stores for a period
of 10 or more days file for bankruptcy
immediately. This is a significant risk,
particularly as it applies to records that
have sensitive information.
The question that remains is
simple: Do you really want to risk
your business by not implementing
inexpensive, effective backup
protection?
COVER AUGUST 2014
2014/07/18 3:14 PM
 Pension Funds Adjudicator
PFA urges speeding up of
treating customers fairly law
The Treating Customers Fairly
legislation proposed by the
National Treasury and the FSB
must be finalised, said the
Pension Funds Adjudicator.
Muvhango Lukhaimane said TCF will
guide the relationship between the
financial industry and consumers.
Lukhaimane commented on a
determination following a complaint
regarding excessive causal event
charges. The complainant said he had
not been made aware at the time of
purchasing a retirement annuity policy
of the causal event charge that will
be imposed when he enquired about
cancelling the policy.
Causal event charges are imposed by
long-term insurers when retirement
annuity members made their policies
paid up or wished to transfer same to
other service providers.
The complainant, P Ramjith of
Sandton, was a member of the
Lifestyle Retirement Annuity Fund
(first respondent), underwritten and
administered by Liberty Group Limited
(second respondent). His policy
commenced on 1 November 2005 with
a maturity date of 1 November 2043.
COVER AUGUST 2014
Aug 14.indd 105
When he obtained a quote from the
second respondent for early exit on his
retirement annuity; he was informed of
a 22% penalty on his investment if he
decided to transfer his funds to another
institution.
The complainants value in the first
respondent was R219 606,97. The
second respondent quoted a causal
event charge of R48 313,53 on the
complainants fund value, thus reducing
the value to R171 293,44.
The complainant said he had voluntarily
increased his premiums over the years
from the original R150 to R5 808.
He said had he continued with the
original premiums, he would have been
paying R326 per month which meant
that his investment value would have
been significantly less, resulting in less
penalties.
The second respondent submitted
that the penalty was within the limits
prescribed by legislation and the rules
of the first respondent.
Lukhaimane engaged services of an
independent actuary. The actuary
found that as the policy has been in
force for nine years out of 38 years
and the large extra increases paid in
premiums, the proposed causal event
charge in the amount of R48 313,53
amounting to 22% of the total fund,
was fair and reasonable.
Lukhaimane accepted the actuarys
finding that the causal event that
would be imposed if the complainant
transferred his membership to another
institution was fair and reasonable.
She said the second respondent was
acting in accordance with generally
accepted actuarial practice, the
provisions of the rules, the provisions
of the policy documents, the provisions
of the Long-Term Insurance Act and
the regulations.
Lukhaimane noted the weaknesses in
the retirement sector when viewed in
light of the six TCF principles most
retirement annuity products failed four
of these.
In the event that customers fall on
hard times, drastic termination fees
are imposed, customers are not given
clear information before and after
contracting of causal event charges,
the advice provided is not suitable
and customers face serious post-sale
barriers in trying to change investment
products.
Firms are expected to demonstrate
that they deliver the following six TCF
principles to their customers throughout
the product life cycle:
Customers are confident that
fair treatment of customers is
central to the firms culture;
Products and services are
designed to meet the needs of
identified customer groups and
are targeted accordingly;
Customers receive clear information
and are kept appropriately
informed before, during and
after the time of contracting;
Advice is suitable and takes account
of customers circumstances;
Products perform as firms have
led customers to expect, and
the associated service is of an
acceptable standard and what they
have been led to expect; and
Customers do not face unreasonable
post-sale barriers to change
product, switch provider, submit
a claim or make a complaint.
The complainant submitted that he
was not aware of the penalties to
be charged when he transfers his
membership to another institution,
which falls short of the openness
required by the TCF principles with
which the respondents associate
themselves.
It is on this basis that the TCF
principles need to be finalised and
enacted into law in order to avoid
complaints of this nature, said
Lukhaimane.
105
2014/07/18 3:14 PM
 EVENTS
IING welcomes new
president Wynand Louw
At a stylish breakfast fit for a president, members
of the Insurance Institute of Northern Gauteng
(IING) came together to wish Wynand Louw well
for his second term as president of the IING.
The Pretoria venue, Diep in die Berg, true to its name took
members on a mountain-view drive in the crisp morning air.
The CEO of the Insurance Institute of South Africa, David
Harpur, was the guest speaker of the morning as he ushered
Wynand into his second term as president.
Welcome and congratulations to the new president, said
Harpur, and thank you for all you have done.
The IING started in 1954. Now in its 60th year, the IING
remains a body of trust and integrity within the insurance
industry.
106
Aug 14.indd 106
Wynand, originally from an engineering background, joined
the insurance industry 28 years ago and has been an
integral part of it ever since. I had an opportunity, he said,
and the industry has been good to me. He said there are
still challenges facing the industry, but what matters is how
you deal with those challenges.
Wynand thanked his team and wished them well for the
next nine months. He reflected on the two training sessions
the IING has already held this year on TCF and POPI. Both
training sessions were fully booked and well attended by
industry stakeholders. He thanked the members for their
loyal attendance and Santam for the use of their facilities.
The IINGs theme for 2014 is social responsibility.
As an industry it is important that we start moving back
into our communities, said Wynand. When it comes to
health, safety, and environmental issues, it is important to
look at the environment, not only at the bottom line.
True to this statement, Wynand then presented a cheque
to Paul Kirby, Marketing and Fundraising Manager of the
Sungardens Hospice. The proceeds of the annual IING
Presidents Golf Day go to a charity of choice, and this
year Sungardens Hospice received the donations. Pretoria
Sungardens Hospice was founded in 1985 by Shelach
Lahoud, and their vision is to provide and promote quality
Palliative Care for all people living with a life threatening
illness within the Pretoria area.
The breakfast was sponsored by Sasria and King Price. Nico
Knop was there on behalf of Sasria in support of the IINGs
new president.
COVER AUGUST 2014
2014/07/18 3:14 PM
 EVENTS
Assupol honours Community Trust
in annual Pro-am tournament
We have decided to make this years
contribution to the Assupol Cares
Community Trust, which in its initial
stage will focus on Early Childhood
Development projects a crucial
yet often overlooked aspect in the
educational life-cycle and development
of a child, said Rudi Schmidt, Group
CEO.

Assupol donated money to the Trust

based on points scored during the
tournament. A donation of R30 000
was made to Assupol Cares Community
Trust. The winning team was Shaun
Norris (Pro), Wynand Malan, Pieter
Strydom, and Coenie van Heerden.
Shaun Norris was the winning
professional.

Schmidt said the Pro-am tournament

was, as usual, also an opportunity
for a good round of golf with the
stakeholders who make their company
a success.

Corporate Pro-am golf additional prize money for the winning

professional. The professionals who
tournaments have traditionally
participated were members of the
been an opportunity for Professional Golfers Association (PGA)
networking and charity, and and the South African Senior Tour
this years annual Assupol Pro- (SAST).
am golf tournament was no
different. The sporting event
was hosted for the benefit of the
Assupol Cares Community Trust,
a public benefit organisation
initiated following the insurance
companys demutualisation.

Now in its 13th year, the invitational

tournament returned to the prestigious
Silver Lakes Country Golf Estate in
Pretoria, on Friday 20 June 2014.
The Silver Lakes course is a signature
18-hole Peter Matkowich designed
golf course, and once again posed an
interesting test for both amateurs and
pros.

A total of 75 amateurs and 25 pro

golfers competed for the hole-in-
one prize of R100 000, as well as

COVER AUGUST 2014 107

Aug 14.indd 107 2014/07/18 3:14 PM

 EVENTS

On story stocks and

investing in Japan
Investors, financial planners and brokers gathered
at the Wanderers Club in Illovo on Tuesday 24 June
for the Glacier by Sanlam Investment Seminar.

RECM and Pieter Fourie from Sanlam Private Investments in

the UK. The tea break was followed by a panel discussion
on multi-asset class investments, and the panellists were
Coronations Tony Gibson, Hendersons Chris Burvill, and
Sarasins Paul Cooper.

From story stocks (social media) to emerging markets, the

panel on global equity left no stone unturned. For the full
story, visit our website: http://bit.ly/1kvEOtt

The first half of the seminar consisted of a panel discussion

on equities. The panellists were Andrew Wheatley-Hubbard
from BlackRock, Tamryn Lamb from Orbis, Piet Viljoen from

108 COVER AUGUST 2014

Aug 14.indd 108 2014/07/18 3:14 PM

 Market Cover
Santam awards their torchbearers
Santams first annual Recognition Award winners
were announced on Tuesday, 27 May at a
ceremony held at the Nitida wine farm in Cape
Town. The pinnacle recognition event afforded the
business the opportunity to acknowledge those
individuals and teams who showed continued
dedication to their work the true torchbearers
for the Santam Way.
Elsabe Fratti, Manager of Total Rewards, said, The winners
truly exemplify the distinction that enables Santam to
deliver insurance good and proper. In the end, I believe we
have identified those who have gone the extra mile in order
to contribute to achieving something greater.
Following the call for nominations, a selection panel
comprising of representatives from all over the business
came together to select the finalists from more than
130 nominations received. Competition was strong, and
numerous detailed and deserving entries were deliberated
on.
Protecting cyclists on the road
The Burry Stander foundation was founded after the
tragic death of Burry in January 2013 and aims to change
legislation and protect cyclists on the roads. Currently the
Stander Foundation is running three petitions, namely,
change legislation for cyclists and pedestrians, the 1,5m Gap
Rule and the creation of cycling lanes along famous routes.
A recent project of the foundation was the launch of the
Burry Stander Bike Park which officially opened on the
Stander familys farm in Umtentweni one year after Burrys
death; the park provides cyclists with a safe environment to
enjoy mountain biking.
Our Group Brand Manager, Andre Symes, is a fanatical
cyclist and huge supporter of the foundation. In January this
year Andre instituted the support of Genasys, COVER and
Camargue and pledged to ride in support of the foundation.
Each company has pledged to donate R1 per kilometre that
he cycles and in just six months Andre has successfullycycled
5500 km and raised R16 500 for the foundation; he even
had the pleasure of meeting Mandie Stander, Burrys mom,
while doing the SANi2C in May.
Mandies efforts in promoting cycling safety and giving
back to the community that embraced Burry as a hero,
is unsurpassed. The Burry Stander Bike Park is a place of
emotion, but that of an overall positive one. It is fantastic to
see such positive strides being made 18 months after South
Africa lost one of their favourite sons. Mandies strength and
drive is remarkable, and should inspire us all to do more
to promote cycling Safety. I am very pleased that COVER,
COVER AUGUST 2014
Aug 14.indd 109
Congratulations again to all the deserving winners. We have
no doubt that they will continue to inspire excellence in all
of us.
Category: True North Leadership Award (individual)
Winner: Franco Feris (Namibia)
Category: Adapt to Thrive Innovation Award
(individual)
Winner: Lizaan Cronje
Category: Above and Beyond Risk Management
Award (individual)
Winner: Guy Denichaud
Category: Service Above All Award (individual)
Winner: Shaaid Seedat
Category: Team Excellence Award
Winner: Group Sourcing team
Alexander Hoffman
Chriszelda Snyman
Letitia Jentel
Camargue and Genasys are on board and making real
changes. Hopefully next year we can do even more! said
Andre.
Mandie facilitated the start of the Burry Stander Foundation
as well as the inception of the Burry Stander Cycling Team
for underprivileged children in the area. The children recently
competed in the Burry Stander SardineMountain Bike Classic
and one of the young riders, Zibele, had the following to
say: Burry Stander Sardine Mountain Bike Classic was
very special to me because it was named with the African
mountain biking legend, Burry Stander. I have a big thank
you to my agent Amanda Stander for organising this tour.
Burry Standers legend will live on and change many cyclists
lives thanks to the amazing efforts of his family and the
foundation that are committed to instituting change in the
cycling industry to ensure that a tragedy like this never
occurs again.
109
2014/07/18 3:14 PM
 Market Cover

Six new appointments

at Centriq Insurance
From June 2014 the following six people
will be working at Centriq Insurance

INDRANI NAIR THIRUSHA REDDY

Claims Specialist Account Executive: Risk Finance Division

BHEKISIZWE TSHABALALA LOUISA ROCKMAN

Reporting Accountant Accounting Manager

PAMELLA BAKUBA ALFONS VAN DER VYVER

Client Accountant Executive Head: Risk Finance Solutions

110 COVER AUGUST 2014

Aug 14.indd 110 2014/07/18 3:15 PM

Untitled-1 1
Give us a call on a t
ok
lo i
083 567 0757 and e a s te re:
hav w eb the
subscribe to or e w ribe za
o ur n bsc .co.
u r
gain access to d s ve
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the most sought ww
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Industry intelligence to nancial professionals

2014/07/18 3:41 PM
Cover 297x210mm.indd 1 2014/05/06 11:43 AM
 Product Development

Protecting your angels

A first in South Africa, and another
innovation from Medway - AngelCover is
an independent insurance product that
exclusively provides cover for chronic
illness and dread disease for minors.

While no parent wants to think about what

might happen if their child falls critically ill, the
emotional trauma of managing a chronic or
dread disease diagnosis is often intensified by
the financial stress of funding the treatment.

With premiums of R119 or R149 per month,

AngelCover pays out an immediate lump sum,
on diagnosis, per child of either R250 000 or
R500 000, dependent on the product selection.
This substantial payout assists with the ongoing
medical costs associated with dread disease
treatment.

AngelCover is designed to provide funds for

treatments and procedures not covered by
medical aid including diagnostic scans, specialist
consultations, chronic medication and treatment
therapies.

The following chronic conditions are covered:

cancer, heart attack, stroke, coronary artery
bypass graft, aorta graft surgery, major organ
transplant (including heart, liver, lung pancreas
or bone marrow), kidney failure, multiple
sclerosis, blindness, deafness, heart valve
replacement or repair, paralysis or paraplegia
(non-accidental), third degree burns and HIV/
AIDS (needle stick injuries only).

112 COVER AUGUST 2014

Aug 14.indd 112 2014/07/20 8:54 PM

A&G_A4_Print_sails.indd 1 2012/12/12 3:54 PM
 KINGJAMES 30239

ITS WORTH
DOING
INSURANCE.
GOOD AND
PROPER.
A lot goes into doing things properly. Thats why we value being voted
South Africas number one commercial and corporate insurer by the FIA,
even more. Then again, the right way is the only way we know how.
Thank you for your vote of confidence. Santam. Insurance good and proper.

For more information visit www.santam.co.za

Santam is an authorised financial services provider (licence number 3416).

Untitled-1 1 2014/07/25 12:16 PM