Beruflich Dokumente
Kultur Dokumente
HOSPITALITY
Home away from home
AGRICULTURE
Digging a little deeper
MANDELA DAY
Giving back
HEALTHCARE
Fertile or failing system?
CONTENTS
COVER SEPTEMBER 2014
08
SEPTEMBER 2014
HOSPITALITY
Home away from home
SHORT-TERM
AGRICULTURE
Digging a little deeper
MANDELA DAY
Giving back Product liability and safety standards 16
Changing our mind about taxis 18
HEALTHCARE Agri Insurance to feed the world 20
Fertile or failing system?
Legal liability case study 34
OFC_landscape.indd 1 2014/08/21 10:36 PM
A potential nightmare 88
ON THE COVER
HOSPITALITY RISKS 8
The hospitality industry faces a multitude of
risks, from personal liability to contents and
building damage. Many of these risks may
look like normal householders risks, but the FINANCIAL PLANNING
underlying dangers of not looking for special
advice are serious. The industry responds. Tax and the Buy and Sell Agreement 46
Astute greasing the wheels of industry 49
AFRICA AND AGRICULTURE ARE SYNONYMOUS 20 Success with beneficiary funds 51
More and more the world is looking towards Cost drag and investment performance 52
Africa to provide it with food. Africa is perfectly Can SA survive the global pension crisis? 54
suited to a fast growing agricultural sector and Interest rate cycle what to 55
the insurance industry is ready with innovative Changing face of retirement 56
insurance solutions to ensure sustainability of a They still think all that glitters is gold 58
crucial sector.
EDITOR
Tony van Niekerk
tony@cover.co.za
Street address
80 Devilliers Way,
Glencairn, Cape Town
Postal address
P O Box 2030
REGULAR Sun Valley, 7985
Advisory Committee
Carel Nolte, Viviene Pearson, Kalim Rajab
() 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 SEPTEMBER 2014
Are we
there yet?
In this issue of COVER we are
looking at a few issues that
would, at first glance, seem like
repeat stories. Unfortunately
it is simply the next episode
of a variety of recurring yet
unresolved issues.
THE DISAPPOINTING
NUMBER OF TOURISTS TO
THE 2010 WORLD CUP IN
DAVID PRATT,
Head of Hospitality and Tourism
SOUTH AFRICA LEFT AN
at Hollard Broker Markets ECONOMIC BACKLASH.
Hospitality and
gaming: the risks
Every day, the hospitality and
gaming industry faces a new
and growing world of risk.
This sector is confronted by a
variety of potentially damaging
threats, particularly as they
deal with an influx of new
leisure and business travelers.
Theres constant pressure from
the evolving marketplace that
impacts important issues in risk
management and threatens profit
margins.
We offer
all sorts of
worry-busting
stuff.
We just cant fit it all in here.
Were super proud of being awarded the FIA Personal Lines Insurer of the Year 2014.
It stands so nicely next to our 2013 award. But more importantly, it means were
doing right by our brokers and partners. When we get accolades like this from people
like you, boy do we celebrate. And then we go right back to working on how we can
get better, so that we can help you to make everyones lives a lot less worrisome.
Proud winner FIA Personal Lines Insurer of the Year 2013 and 2014,
thanks to our brokers and partners.
personal commercial corporate investments The Hollard Insurance Co. Ltd, Hollard Life Assurance Co. Ltd and Hollard Investment Managers (PTY) Ltd
are authorised Financial Services Providers.
Product Liability:
What Safety Standards are applicable?
For South African importers and While standards are very useful, they
manufacturers, there is also a strong have their limitations and should be
onus to adopt international standards seen as a baseline. Thats owing to
either European or American. the consensus approach taken to
establish standards (whether European
While each member country within or American); as a result, the
Europe has its own standards- guidance provided us often somewhat
setting organisation, there is also an basic.
umbrella level at which standards are
administrated across the region to Therefore, while passing a standard
provide the European Norms Standards. is necessary, it is not sufficient it is
Where harmonised European standards not enough to confirm that a product
exist, they are then adopted as national is safe for its intended uses. More
standards by the standardisation bodies work may still be required in terms of
of each member country to provide a testing, labelling and providing user
common approach. information to avoid product liability
claims.
ERIC DOM,
Underwriting Manager Liabilities, Global Finally, it should be borne in mind that
Casualty, AIG South Africa Limited product liability claims arise from not
WHILE STANDARDS ARE VERY
only as a result of inadequate design,
USEFUL, THEY HAVE THEIR
but also through manufacturing faults.
When introducing products to LIMITATIONS AND SHOULD Failure to adhere and comply with
market, manufacturers must BE SEEN AS A BASELINE. standards may bring manufacturers
directly into breach of statutes
ensure a reasonable level of or breaches in Health and Safety
safety to avoid product liability regulation. Omissions such as these will
claims. What safety standards There are also international make it extremely difficult to defend
product safety standards which are a liability claim into terms of our
are applicable and do they vary
administrated by ISO the International common law.
depending on where the product
Organisation for Standardisation.
is sold? Therefore, manufacturers must have
Some ISO standards are adopted as
quality management systems in
harmonised European standards.
In addition to legislation which place to ensure their production and
applies to product safety and with European and ISO standards are risk- distribution operations are effective;
which manufacturers must comply, based, which means risk assessment the ISO9000 standard for quality
there are also local and international (or design review) is implicit in their production processes is provides
safety standards that guide product application. The standards help a recognised level of guidance for
specifications and provide consumers guide judgments made during the production processes.
with quality assurance. development process; however,
AIGs web-based Product Liability
manufacturers must take responsibility
Locally, product safety standards are Service is a training system which helps
for the type and level of safety
regulated by bodies including the South manage product liability risks. Courses
precautions selected there is no
African Bureau of Standards (SABS), cover a variety of topics including
simple look-up chart.
the National Consumer Commission, management, safety warnings, risk
the National Regulator for Compulsory American product safety standards communication, legislation and
Specifications (NCRS), and the are developed via non-governmental standards, to promote good risk
Department of Trade and Industry, as Standards Development Organisations management. The service is supported
well as industry authorities. (SDO). Many industry sectors have by tools including a model corporate
their own SDO. product safety policy statement, a self
These bodies act in terms of legislative assessment audit and a risk assessment
frameworks such as the Standards Unlike Europe, American safety tool.
Act and the Consumer Protection standards do not have any clear
Act; the SABS also operates as the structure. Product-specific standards Eric Dom can be contacted at
standardisation body for the Southern tend to be self-contained documents eric.dom@aig.com
African Development Community of 14 providing guidance that may be specific
countries. to the product.
AFRICA
CAN FEED
THE WORLD
All stakeholders agree agriculture is vital for economic growth and food
supply in South Africa not to mention job creation. The industry leaders in
agriculture cited innovation, partnerships, and the importance of brokers in this
space as vital roots for robust growth in the industry. COVER dug a little deeper.
FUTURE CHALLENGES OF
FARMING IN SOUTH AFRICA
Brokers can be local mentors
The agricultural industry, vital changes have confronted even the
most experienced farmers during the
to our nation, faces challenges
last decade, resulting in severe crop
that are broad and deep and losses.
will require super management
Now the duty of the insurance
by experts in specific areas to industry is to do all in our power to
overcome, as well as practical help farmers overcome the trials they
support from the government. face. They grow our food and are a
vital support to the economy and well-
But expert mentoring from
being of all South Africans. In addition
intermediaries can help. to being our food supplier, they earn
valuable income through exports, and
Andre van der Walt, Head of Hollard employ millions.
Agri, is part of the team who has been He explains current challenges:
negotiating with the government for Van der Walt points out brokers can be
their material and practical support. He Integrating new farmers into the local mentors. Intermediaries have a
has also been calling on experienced established farming community has major role to play in empowering new
brokers to pass on their expertise to been in progress since 1994. Added to farmers with valuable knowledge. By
new farmers and is a specialist insurer challenges connected to that transition, building relationships, shaking hands,
in agriculture. extreme and unexpected weather talking eye to eye, they can encourage,
the nation, and can identify new needs fuel and salaries. This means the only
as soon as they arise. Also, brokers financial beneficiary is the middle man,
can keep farmers informed regarding while it is the farmer who carries all
effective risk control and management the risks.
as well as advances in insurance
designed to save them money and However, in spite of the size of
provide complimentary add-ons a these challenges, the potential of
continuous goal of ours. the agricultural industry cannot be
questioned. We must succeed in
pass on knowledge and go beyond HOW CAN YOU HELP? finding solutions. South African farmers
selling insurance to being very smart Van der Walt believes one of the have proved themselves able to
advisors and mentors. two biggest challenges facing the rise to challenges by innovation and
agricultural sector is unifying and endurance and meanwhile we have to
From the insurance perspective, combining efforts between the old be creative in how we can assist.
farmers have unique risks and and new generations of farmers. Unity
protection needs. Understanding is essential in driving agriculture to a The future may require radical
them is a must if we are to assist. At successful future. This is an area where change from us including new and
Hollard Agri we have a combination local brokers can facilitate introductions extended covers to accommodate
of 200 years of farming expertise and skills sharing and make a big natures unpredictable events or
which we offer to brokers. In addition, difference. technological developments. That
intermediaries should see themselves is why insurers have to stay on top
as a vital two-way communication We also have to be sensitive to the of daily developments locally and
channel. They are the eyes and ears continuous increase in production costs internationally and act pro-actively and
of insurers on the ground, throughout to farmers including interest rates, helpfully to empower and protect.
THE F INANCIAL
Security is sometimes required to
secure the debt. This could be in the
form of a cross company guarantee
HEALTH OF FARMERS
which is usually the case when a
farmer has set up a trust and all equity
is in the trust. A cession of crop or
a notarial bond is accepted more
frequently these days as a valuation
can be done to determine the value of
reflect if the farm is financially healthy. the crop or assets.
Because weather patterns can be a
Credit providers need to take extra
direct reason for crop failure, it is
care when granting longer periods for
important to take this natural element
repayment of debt. If terms are too
into consideration and the location of
long, the general farming sector tends
the land.
BARBARA FOURIE,
Collections Specialist, Coface,
the international credit insurer
Regional teams
Local guru
Life insurance markets are changing rapidly and opportunities abound. Together with our
team of experts, you can quickly design and roll out new ideas at the global, regional, or local levels.
Its an integrated, customized approach to product development. And its the perfect combination
for moving forward in new, promising directions.
to spend the money received from Trade references can have an impact considered and possibly play a huge
their harvest rather than pay the input on the amount and terms granted. role in the assessment when granting
costs incurred. The history with the supplier could be credit:
considered, as well as the information
They then have to request extensions supplied by an information bureau Financials
on the repayments of between three as to how the farmer conducts his
Asset valuation
and six months. This is again assessed business.
on a case by case basis as the credit The age and/or experience
period can then be anything between The risk of default in this industry is
of the business
high and can have a catastrophic effect
18 to 24 months. Recovery in the
on cash flow. It would be prudent to The age of machinery
industry is in general good although
insure these trade credit invoices in the
over a long period. Location
event of non-payment or insolvency
with a credit insurer with extensive
This is one of the sectors where cash Product
experience in and understanding of this
flow assessment is important and one
industry in order to facilitate, rather The automation of farms
of the few business models that is
than hamper growth.
entirely funded by credit. As a creditor Environment
it is extremely important to remain Understanding the risk involved when
close to your debtors in order to know granting credit takes understanding Security
as soon as there is a possibility of and knowledge of the industry and Terms
something going wrong, allowing you experience in writing risk within this
to mitigate the risk effectively. specific industry. The following can be References
Our
risk
assessment
His
quality of life
Who will provide the healthcare that our ageing populations need, and the quality of life they expect?
You know the issues better than the back of your own, elegantly ageing hand. And so do we. For example,
right now in the US were working with clients to combine their expert market knowledge with our risk
assessment capabilities. The result? Affordable private insurance that will not only provide retirees with
comprehensive medical cover for the rest of their lives but peace of mind for everyone concerned.
Especially him. Were smarter together.
swissre.com/cov2
COVER_Reinsurance_LH_EN_010814.indd
Untitled-1 1 1 04.07.14
2014/08/21 13:39
11:54 PM
Agri Feature
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
Untitled-1 1 1 2013/10/15 11:55
2014/08/21 10:00PM
AM
Agri Feature
AGRICULTURE SECTOR
tailored policy combining a wide and
appropriate range of focused covers,
not only for a farmers business assets,
but his personal assets as well. Renasa
recognises that agricultural insurance
needs to be increasingly flexible.
BY COLIN SCOTT abroad. The input costs of the business For example, spotter plane costs
Risk Manager such as fertiliser, fuel and cattle feed for fire prevention and fighting is a
Renasa Insurance Company Limited seem to be ever rising. And insurance recent extension. Similarly, increasing
& PETER MAGGS is also an operational cost which must
Divisional Manager emphasis is being placed on risk
Renasa Insurance Company Limited
be justified, and not just seen as a management and risk control features.
grudge purchase.
A helicopter view of South African The intermediary is also an important
agriculture would suggest that the Despite this, Renasa believes that the factor in successful agricultural
sector is becoming less attractive to agricultural sector remains a viable insurance. To this end, Renasa
insurers. The number of active farmers proposition for insurers prepared to has formed a partnership with the
has declined sharply and it is estimated better satisfy the specialised and intermediaries, which market our
that there are less than evolving needs of farmers. We are products. Our intermediaries are well
30 000 active today. Land claims, well aware of the obstacles farmers positioned in most farming areas.
crime, liabilities arising under new face and the increasing importance They bring knowledge of the local
legislation (such as the Veld and Forest of carrying insurance that is both area and conditions which provide our
Fire Act), labour and other issues adequate and affordable. It is Renasas farmer clients with a more appropriate
create huge uncertainties. Farmers, philosophy to assist the farmer by solution and competitive pricing.
and not just the smaller ones, find it giving him the opportunity to recover It also provides them with a major
increasingly difficult to compete with quickly after suffering a loss and our advantage in the faster settlement of
subsidised agricultural products from policies and claims procedures are claims.
OPPORTUNITY
THERE ARE ELEMENTS OF RISK IN EVERYTHING
Protecting your clients business against risk takes strategic insight. It takes innovation and tailored solutions. It takes the
pioneering approach of cell captive insurance. Guardrisk offers cover for corporates, small enterprises and municipalities, as well
as cover for a variety of industries including marine, construction, motor and many more. The option of a third party insurance
offering lets clients sell insurance cover to their customers, boosting their business earning potential and building their brand.
Tel: +27 11 669 1000 www.guardrisk.com
In making 2014 the Year of In June 2013, the Africa-focused Future Afriflora, a rose producer, in early June
Agricultures Consortium reported 2014. Kenyan PE investor Centum
Agriculture, the African Union
that there were 53 PE funds that had Investment Company is now engaged
has concentrated its focus on raised or were raising funds targeted in a legal tussle over its bid to take
private-sector investment and at African agriculture. Twenty-seven of over REA Vipingo Plantations, the
them are focused solely on agriculture, owner of several East African sisal
public-private partnerships to drive
but together they had a target of farms.
the sector. This development is raising an estimated USD 5,8bn.
complemented by the level of Small and medium-sized enterprises
More recently, United States firm (SMEs) account for 90% of business
interest shown by private equity KKR & Co. made its first African PE activities in many African countries.
(PE) firms in the sector. investment in Africa through Ethiopias African Agricultural Capital, backed
SEE OUR
NEW
WEBSITE
WWW.COVER.CO.ZA
Subscribe online,
or email Brent:
brent@cover.co.za
or call: 083 567 0757
CM
MY
CY THE INSTITUTE OF
CMY
LOSS ADJUSTERS OF
K
SOUTHern AFRICA
Providing insight and guidance, overseeing education and ensuring continuous professional
development to Loss Adjusters of distinction for over 50 years you know you can rely on us.
Tel +27 11 325 1977 Fax 086 519 9446 E-mail admin@ilasa.org.za
First Floor Victoria Gate South, Hyde Park Lane Manor, Hyde Lane, Hyde Park, Johannesburg
360Life is a dynamic insurance solution from We also offer a range of rider benefits that can be taken
in addition with our core risk benefits. By combining the
Nedbank Insurance that gives clients the financial
various benefits each client is able to get what they need.
security they need at every stages of their lives.
To keep up with our clients needs we have not only
When 360Life launched in 2010, our main objective was enhanced some of our benefits, but we also reviewed our
to provide a flexible solution that would protect our clients pricing, Naidoo said.
through the different stages of their lives. In addition, we
wanted to make sure that this was not a one-size-fits-all What does this mean for our clients?
solution, but that it will be flexible enough to cater for each
Carer benefit offered for longer durations
clients unique needs, says Nedgroup Lifes Senior Product
Suffering from a chronic condition or a disability can make
Actuarial Analyst, Deevashan Naidoo.
a person helpless and in need of constant supervision. This
Underpinning our product development strategy is a need comes with a number of additional costs for the family.
to respond to ever-changing client needs. As a result, Instead of a daily helper the person may now require
we offer continuous improvements to our solutions, said a qualified nurse to provide day care nursing. With this
Deevashan. in mind we launched the Carer benefit in March 2013
to provide a regular income for a specified period to
Since the launch of 360Life we have been continuously supplement income during this tough period. This benefit
enhancing and improving the benefits and features to was launched with a cease age of 66. To meet our clients
provide our clients with better options and choices. We now needs better we will now be offering this benefit for a
offer a complete range of risk benefits to cover our clients longer term up to 76 years next birthday- to match
against death, disability and critical illness. But thats not all. improved longevity.
Untitled-1 1
Nedgroup_sep.indd 1 2014/08/22 11:45
2014/08/07 12:00AM
AM Nedg
extension of CritiCal-illness Conditions Whole-of-life-disability Conversion option
Many South Africans live unhealthy lifestyles and are most We now offer an automatic conversion for specific disability
likely to suffer from a cardiovascular disease at a younger benefits. When these benefits reach the end of their term,
age. Cardiovascular diseases are not only a risk to men, they will automatically be converted to the whole-of-life
women are just as prone to cardiovascular disease. At the Physical Impairment benefit. However, clients still have the
same time cancer is still on top of the list of insurance option to terminate the benefit at the end of the term. The
claims for women. Therefore critical illness insurance automatic conversion applies to new as well as existing
should form part of everyones financial plan. However, clients.
most people consider this an optional extra rather than a
funeral support serviCes
necessity. As a result even the few that have bought critical
360Life and 360Business clients will be provided with
illness benefits are underinsured.
funeral support services at no additional cost. These
Other reasons for critical illness cover are: Improvements services will be available to clients and their immediate
in medical technology have resulted in prolonged life for family, including domestic workers.
cardiovascular disease and cancer patients. Conditions such
The benefits provided under these services include free
as Dementia and Alzheimers have long term impact and transportation of the mortal remains to the funeral home
can cause an upheaval for the whole family. Whether the of the clients choice and assistance with all the funeral
client has Cancer or Dementia, he/she will need additional arrangements.
money to cope with the change in lifestyle which may be
required or for additional medical costs that may arise or neW premiums
simply to provide peace of mind. Our pricing review has resulted in some significant
improvements to our already competitive pricing. Our
To provide our clients with even more protection for critical clients will now be able to get even more cover at a better
illnesses we have increased the number of conditions premium, depending on their profile.
covered under our comprehensive illness benefits. We now
cover a total of 81 conditions. We pay 100% of the cover Life changes every day and so will your needs. While some
amount for some of the benefits. The good news is that of the changes may cause upheaval in your life, 360Lifes
even our existing clients can upgrade to these enhanced changes make your life even more secure. Make change
options without any additional underwriting. happen.
survivor benefit
This benefit is another way of ensuring that our clients have
complete critical illness cover.
We pay 100% of
the cover amount for
some of the benefits.
This product is underwritten by Nedgroup Life.
heart attack or a coronary artery bypass graft. In addition Nedgroup Life Assurance Company Limited Reg No
1993/001022/06, First Floor, Ridgeside Campus, 2 Ncondo
to receiving the normal lump sum under the critical-illness
Place, Umhlanga Rocks, 4320. We support resolution for
benefit, a client will receive 10% of the claim amount at the unresolved disputes via the Ombudsman for Long-term
end of five years and every five years thereafter until the Insurance. We are an authorised financial services provider
end of the term or death. (licence number 40915).
A person can only buy this benefit as a rider to any of our We are a registered credit provider in terms of the National
critical-illness benefits, excluding the Critical Illness Child Credit Act (NCR Reg No NCRCP61).
benefit. A member of the Nedbank group.
1:45 AM Untitled-1 2
Nedgroup_sep.indd 2 2014/08/22
2014/08/07 12:00
11:45AM
AM
Legal
$
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
4
Survey report. functional leaders.
2
Significant new IT platform
Strong CIO and CMO investments Top-performing
This study reveals how well business
relationship 70% of top- companies are innovating
and IT leaders understand, value and
performing companies say they how they think about IT and
weave digital technology into the
have a strong Chief Information remaking it to improve the needs
fabric of the business. This is known
Officer (CIO) and the Chief Marketing of the business. The study refers to
as their Digital IQ. In this years study,
Officer (CMO) relationship, compared this model as the New IT Platform
PwC identifies the five key behaviours
with just 45% for non-top performers. a thorough approach, addressing
that make for high digital IQ. Those
businesses in the study that have a how the IT mandate, processes,
The CIO is internally focused and
strong digital IQ were 2,2 times more architecture, organisation, and
there has been virtually no change
likely to be top-performers in revenue in involvement around customer and governance must change to keep up
growth, profitability and innovation. product innovation during the last six with the business.
1
counter-intuitive. Dont leave room
for interpretation when it comes to more likely to use agile processes than
CEO actively champions digital
market-facing digital technology like their regional counterparts, possibly
A digital CEO sets and steers
consumer apps, websites, or customer contributing to more success in
the companys digital visions and
tackles the challenges that come analytics. Get explicit agreement delivering in IT projects.
5
with new ways of doing business. 81% between the CIO and CMO on who
owns the initiatives, the role each View digital as an enterprise
of top performers say their CEO is an
leader will take on, and when and capability The study
active champion in the use of IT to
how they are expected to work suggests that companies begin
achieve business strategy, compared
together. broadening how they think
with 68% of other companies.
3
about their digitally-savvy resources,
The healthcare industry had the highest Outside-in approach to digital realising that it is becoming essential to
level of active-champion CEOs, which innovation The top performers have a digital capability that is woven
is not surprising given that the focus on in the survey are more likely throughout the business rather than
technology to transform patient care to look to outside sources like only centralised in a single function.
and reduce costs has been a key focus industry analysts, vendors, universities The survey found that top-performing
there for more than a decade. and labs, to fill their idea pipelines, companies were more likely to have
in addition to internal sources. But all stronger skills in crucial areas like
A digital strategy should consider the companies tend to rely most heavily on digital architecture and user experience
dimension of everything the business traditional sources like internal planning design.
does its growth and cost goals, sessions and workshops.
Enter: eyeThenticate
Technology vs. white collar crime
ANDRE IMMELMAN, over the world, has truly developed transferring money out of your account,
CEO eyeThenticate (Pty) Ltd into a veritable Swiss army knife - or ordering the latest HDTV from
somewhere, there is an app that we Amazon on your credit card, or doing
can download to allow us to do almost anything which only you are normally
When Dr Martin Cooper of Motorola anything. supposed to be able to do.
made the first cellphone call back
However, all of this unprecedented
in 1973, using a gadget that truly
convenience comes at a very high cost
deserved the pejorative term, brick,
that is escalating exponentially each
the world received the announcement
day: mobile phones make very easy
with little more than a yawn, mostly
targets for hackers who are bent on
dismissing it as something that had
defrauding us using any number of
little commercial application! At the
very clever ploys. For example, the
time, pundits forecast that a city
next time you happen to find yourself
the size of London with its highly
waiting in the business lounge of the
concentrated business community
airport, casually sipping a Bloody Mary
and advanced infrastructure would,
while catching up on your emails or
optimistically, never see more than
putting the finishing touches to your
12,000 of these devices ever being
latest business proposal or doing your
deployed!
banking on your smartphone or your Mobile communications have promoted
Of course, history tells a very different tablet, the person sitting right opposite identity theft into the foremost
story... to you, also casually sipping something commercial crime of our day. And
with a little umbrella sticking out of it, because it is so easy for anyone
This year, there will be more mobile could very well be intercepting every to dispossess us of the information
phones in circulation, than there are one of your communications. which only we are expected to know
actual people in the world, doing (password, PIN, login, OTP...) - all
more things than anyone could ever the things which we depend on to
have imagined and certainly much SECURITY CONCERNS let us do the things which only we
more than Dr Cooper ever purposed REMAIN THE BIGGEST BARRIER are supposed to be able to do, this
for his invention. In fact, according to problem has given rise to one of the
a recent survey conducted by O2 in TO MOBILE PAYMENTS most fundamental questions of our
the United Kingdom, actually using a - ABI Research time: how do we know with certainty
mobile phone to make a call ranked that anyone is actually who he says he
only fifth on the list of things that is?
people do with their iPhones and their For only a few dollars from an online
Galaxies and their Blackberries and store, it is very easy for anyone who Think about it for a moment - we
their whatever. is even remotely tech savvy to buy a merely accept, as a matter of course,
cheap piece of kit that allows him to that the other person is in fact who his
In the short space of only a few years, set up a rogue WiFi hub or cell phone business card says he is, or how hes
mobile phones have truly revolutionised tower that looks just like the real thing. been introduced to us, or what it says
the way we now do life, how we go And so, while youre blithely going on his letterhead or at the bottom of
about our business, how we go to about your business and even before his email.
school, how we interact with each your flight departs, there is someone
other, and so on. The one thing on the other side of the world who, Now, while it really doesnt matter
we all carry with us all the time all armed with all your credentials, is if Mr X isnt actually who he says he
Libertys EduCator benefit, available on Lifestyle Protector will help your clients pay for their
childrens schooling whether its UCT, Harvard or the local nursery school, but also for things like
brand new school shoes, should your client pass away, become critically ill or disabled. To give your
clients the Liberty advantage, contact our call centre on 0860 109 450 or visit www.liberty.co.za.
The Advantage of Knowing
Liberty Group Ltd an authorised fi nancial services provider in terms of the FAIS Act (Licence No. 2409). Terms and conditions apply.
Untitled-1
#131 1 Trade 297x210.indd 1
Educator 2014/08/22
2014/02/06 12:04 AM
5:53 PM
Coffee with
COVER
Leveraging the
opportunities
C
OVERs Taryn Kerr sat Where do you see Absa Insurance
down with Andries van t into the South African short-term
Staden, Managing landscape?
Executive of Absa Insurance, We have dened ourselves as a bancassurer,
focusing almost exclusively on this. Being
to speak about all things part of a bank, we believe that is our strength
bancassurance. We found and where our opportunities lie. We would "We have defined
out where the challenges and rather take these opportunities and do them
well, as opposed to competing in the open ourselves as a
opportunities lie in this space, market with guys who are more geared
and what the Absa Insurance towards that environment. bancassurer,
strategy has up its sleeve. What is your strategy in the above focusing almost
context? exclusively on
We want to be the best bancassurer, and this."
that has taken us down a route of really
trying to see what works where. An example
is the house owners insurance Absa will do
the bond, while we give the customers the
convenience of a policy with Absa as part of
the process. A lot has changed, as we now
really have to make the customer aware of
this policy, where in the past it was not as
transparent. If you look in the market, people
are after that business, so we really have to
make the customer aware of the benets.
Many people will offer the policy for free
or a cash-back option, but if you read the
smaller print, it is a different story. We want
to protect the Absa customer and we want
to protect the bank, so our excess on this
policy is very low. We do not want people
defaulting on their bonds because another
catastrophe has occurred.
We have taken this down all the lines: home
loans market, vehicle and asset nance,
travel with Absa card, the broker model (both
private and business), and the agricultural
assets and crop market.
44
45
AND WE WILL
We at Leppard Underwriting protect businesses against the
unknown and the unforeseeable, supporting our commitment
www.leppard.co.za
Leppard Underwriting FSP 274
Underwritten on behalf of Lombard Insurance Company Limited (FSP No. 1596)
is the quality of the products which pointed out that a company needs to
will contribute towards poor advice. create a culture that does not have
This is the responsibility of the product an immune system. These companies
provider. are adaptable to change and can
change systems accordingly. We
There is a cost saver. If there is need quicker technology adaptation.
a higher level of trust between Another aspect of innovation is to
the intermediary and the client, spread the intelligence pool within an
transactions can be quicker. The client organisation and to use everyones
trusts that the intermediary is selling talents. No one is smarter than
them the best product which can result anyone. If faced with a problem, the
in lower costs. company should pool the wisdom of
the company. Innovation can only
TECHNOLOGY THE BIG CHANGE happen in an empowering culture
AGENT where management is open to the
The majority of humans are not great possible opportunities that change can
innovators because they are defined present. Demand is the major driver
by social norms. Chairman of social towards innovation.
media network Mxit Michael Jordaan
To make it practical, the following have Nkandla. Globally there will
questions need to be asked: always be wars that have an impact
here, for example Israel and Gaza.
What is desirable for users? What is
possible with technology? What is Man cannot discover new oceans
viable in the market place? unless he has the courage to lose sight
of the shore.
EXTERNAL FORCES Andre Gide
If one country sneezes, another country
catches the cold. Interest rates are For us, going forward includes
rising again. We have Marikana. We expanding the core of your business.
4194 BN 0714
Put everything of value
in the right hands
Absa Insurance is geared to get clients back on their feet when the unforeseen happens with insurance
solutions ranging from personal, agri, commercial and industrial. Share peace of mind. Prosper.
0860 111 555
Absa Insurance Company Limited Registration Number 1992/001737/06 Authorised Financial Services Provider
The fees are disclosed on the management companys fund The table below shows the performance if you invested
fact sheet and other marketing material. The LISP will also R500 000 with the second investment manager. In year
be able to provide the fees. Be mindful not just to take the one you start with R500 000 in unit trusts. You received
annual management fee or fee at benchmark into considered performance of 10% (R50 000), costs were 1% (R5 000)
because typically, that is not what you are going to pay. The leaving net performance of R45 000, hence the total
cost that will be deducted from the unit price is the Total portfolio value is R545 000. The investment and costs
Expense Ratio (TER). The TER shows the charges, levies remain unchanged over the years, giving a total portfolio
and fees relating to the management of the portfolio and is value of R1 183 682 after 10 years, R2 802 205 after 20
expressed as a percentage of the average net asset value of years and R6 633 839 after 30 years
the portfolio, calculated for the year at the end of the most
recent completed quarter. A higher TER does not necessarily
imply a poor return nor does a low TER imply a good return.
CONCLUSION
In the end all the little things add up to make a big
difference. It is important to consider costs when selecting
a financial advisor, LISP and investment manager. Just like
shopping or paying for a service, you need to compare
the initial fees and annual fees of service providers and be
aware of any additional costs as they may influence your
investment significantly
Retirement is changing.
Are you ready?
proportion tend to cash in some or 100% of their contributions in a
all of their retirement savings when provident fund. From 1 March 2015,
changing employers. This is evident in the member can only access one-third
the low savings rate of the country - of the amount and will be compelled
various studies estimate that less than to use the remaining two-thirds to
10% of people can retire comfortably. purchase an annuity as is the case
To increase the level of retirement with a pension fund. Members can still
savings, Government believes tax withdraw all contributions (and the
incentives can play a valuable role. growth thereon) made to a provident
fund prior to this date.
NEW SAVINGS PRODUCTS FOR A
NEW LANDSCAPE If the total amount in the provident
From 1 March 2015, Government is fund, pension fund or retirement
expected to introduce tax-friendly annuity (RA) is less than R150 000
discretionary (after-tax) savings at retirement, then the member may
products, designed to encourage withdraw the full amount in cash.
additional savings, over and above
THE NEW CAP ON TAX BENEFITS
JEAN LOMBARD, compulsory retirement savings.
Head of Business Integration & ON RETIREMENT FUND
Research at Glacier by Sanlam CONTRIBUTIONS
In an attempt to simplify current tax
incentives, employer contributions to
retirement funds will become a fringe
We can expect a number of SOUTH AFRICANS, benefit in the hands of employees for
changes from March 2015 and tax purposes.
GENERALLY, DO NOT SAVE
beyond. And the landscape ENOUGH FOR RETIREMENT. As from 1 March 2015, employees can
around these changes is a claim a tax deduction of up to 27.5%
complex one. Increasing (currently 15% of non-retirement
funding income) of the greater of
longevity means ones savings remuneration and taxable income
need to last longer and on contributions to a pension fund,
governments proposals around The intention is that these savings provident fund or retirement annuity. A
vehicles will not attract capital gains ceiling of R350 000 per tax year will
retirement reform aim to tax or tax on income and dividends. apply, and unused deductions may be
encourage investors to act in However, there will be an initial annual rolled over to the following year.
their own best interests. contribution limit of R30 000 and
a lifetime limit of R500 000. These Remember that members can continue
RETIREMENT REFORM OBJECTIVES amounts will be inflation-adjusted on to make tax-deductible contributions to
INCLUDE: a regular basis. Once this product has a retirement annuity even beyond the
Ensuring that all employees been launched, the current interest age of 70.
contribute to some form of exemption (R23 800 for persons under YOUR LAST CHANCE
retirement savings vehicle; 65, and R34 500 for persons 65 years The R350 000 tax deductible ceiling
and older) will no longer be adjusted means that investors have a last
Ensuring that these savings are for inflation.
preserved for retirement funding only; opportunity between now and 28
February 2015 to make additional
A NEW ALIGNMENT OF
Ensuring that people are able to ad-hoc contributions to their retirement
RETIREMENT SAVINGS PRODUCTS
save through reasonably priced annuities to enjoy the tax benefits.
Also on 1 March 2015, the deduction
investment products; and Excess contributions can be carried
of contributions and the lump sum forward and as of 1 March this year,
Ensuring that investors have payable in respect of pension and can even be utilised after retirement.
a sustainable income for provident funds will be aligned. Lets look at an example:
life, post-retirement. Benefits will also be treated the same
way for contributions made from this Suppose a clients non-pensionable
South Africans, generally, do not date. Currently, members retiring income is R5 million. 15% (R750 000)
save enough for retirement. A large from a company are able to withdraw of this income can be contributed to an
DUTY OF CARE
Despite the regulatory provisions
driving the need for due diligence, the
real reason for doing a due diligence
should be because this onus and ask for professional opinion before
IAN MIDDLETON, action are core to the care with which committing his clients funds to such
Managing Director of Masthead professional advisors want to treat their an investment.
customers.
Regulation and case law (FAIS
What does a due diligence involve? Ombud determinations) provide
A recent advertisement in a It is essentially an assessment of principle guidance but approaching
risk the risk of a company not due diligence from the perspective of
national Sunday newspaper what would you do if your parents
performing as promised; or a product
proclaimed 20% guaranteed that does not pay out (perhaps want to invest? is a practical and
return, zero risk, zero liability. because of exclusions), does not meet sensible way to deal with things.
the expectations created, or is not Applying simple rules of thumb,
We all would like to believe including some tips from the FSB5,
suitable for the customer to whom
there is that proverbial pot of it is recommended. A product due should help advisors meet the
gold at the end of the rainbow. diligence entails a dual investigation of expectations of a due diligence:
what the product comprises (e.g. its
In an economy where consumers features, risks, benefits and lifespan) The farther an investment appears
are cash-strapped and pensioners and whether it is suitable for the to veer away from the norm or be
seek higher incomes, not only can outside the mainstream (e.g. in
customers needs.
consumers be enticed into putting relation to returns, commissions,
their money into an investment like Advisors are obliged to stay up to date penalties, promises), the more you
with every provider and/or product they should dig for information or stay
this financial advisors can also fall
have on their shelves. Therefore, the away. The higher the promised
into the trap. When business is tight,
more products, the more exposure, the return, the higher the risk.
its tempting to go after great offers
like this. more risk and the more due diligences
Do not blindly accept what you
needed.
are told or what you read about a
In the words of Prince: All that
In corporate advisory practices, the company or a product. Dont take
glitters aint gold.1 These lyrics serve
onus of doing a due diligence rests things at face value, especially if they
as a reminder of the pitfalls and
with management and/or specialists sound too good to be true. Dont
responsibility on financial advisors.
backing up management. They do rely only on marketing brochures
This is when they should remember
the homework and determine what these tend to underplay the risks.
their duty of care to their customers.
Besides knowing their customers, they advisors can sell. But what does a
Understand how the product works.
also need to know the providers with small advisory business do? What is
If you dont understand all the risks
whom they do business and about the expected of advisors? How should
(product/company), ask questions.
products they recommend. they conduct a due diligence? Whats
acceptable and whats not? Keep an audit trail of what you did
Much has been written about the to get to grips with the product.
need for financial advisors to do a The following words in the Durr 4
due diligence on the providers with case sum up the duty of care and In the Durr v ABSA case, the
whom they do business and the the actions needed to protect oneself judge stated: One of the first
products they suggest. There are and ones customers: if the requirements of a professional is to
many regulatory provisions that set adviser himself does not have the know when he may be getting out
out the onus on advisors. There are personal competence to make the of his depth. These words should
provisions in the FAIS General Code of enquiries, it is incumbent upon him help advisors to stay focused. If you
Conduct, provisions in the principles to harness whatever resources are have any doubt about a product
of Treating Customers Fairly, and available to him or if necessary to and/or company, stay away.
RYNO
the tried and trusted. Many advisors Track record and experience.
stay with listed companies, as they Are they who they claim to
give extra protection. In addition to be? Do their products do
FSB regulation, listed entities are what they promise to do?
subject to the rules governing the
Johannesburg Securities Exchange Their investment performance or
(JSE). These provide customers, claims ratio. Are they financially Ryno needs to quit
investors and advisors with peace sound? Are they likely to be
around in a few years time? the killer. With a
of mind that there are measures
in place that afford them some
Can they follow through on commitment to do so,
protection.
promises? This is about the Altrisk will give him
capacity, capability and expertise to
deliver. Do they offer appropriate a reduced premium
infrastructure, support and
MANY FAILED training? Do they have the systems from day one.
INVESTMENT SCHEMES and processes to deliver what
WERE UNKNOWN, they promise (e.g. service)?
UNLISTED AND EVEN While it is appropriate to consider Plus well help him quit.
UNLICENSED OR the types of issues above in
UNREGULATED. relation to all ones business
partners, the level of detail required If your clients smoke talk
differs depending on who one is
considering. The FAIS Ombud will to them about Altrisks
take judicial notice of the main,
By contrast, many failed investment
established brands in the insurance Proactive Smoker it
schemes were unknown, unlisted
and investment field, so the level could save their life and
and even unlicensed or unregulated.
of due diligence required there is
They did not have an established
reputation or brand name. They
less. But if you move away from the their pocket.
mainstream, your questions need to
certainly did not apply the provisions
be more intense and deep.
of the King Report on Corporate
Governance (some even conducted Making due diligence a core part For more
their own valuations). As such, they of your advice business will not
add risk to an advisory business. only help to satisfy regulatory information
requirements but will also speak to your
Before deciding to move away from
demonstrate care in looking after
the tried and trusted, apply the tests
listed earlier advisors should line up
your customers financial wellbeing, Altrisk broker
while at the same time significantly
their due diligences and find out as
much as possible.
reduce risk in your business. consultant or go
CREATE A HOUSE VIEW
to www.altrisk.co.za
One way to manage risk in an
advisory business is to create a
1
Gold is track #11 on the album
The Gold Experience, written by
house view a process by which
advisors pick several companies Nelson, Prince Rogers and sung by Were your type
(or providers) with whom they are
prepared to do business. Providers
Prince.
of risk insurer.
are thus limited to a manageable
2
Durr vs ABSA Bank Ltd and Another
number, based on a set of factors 1997 (3) SA 448 (SCA)
that serve as their due diligence. 3
Craig Stewart Inch vs Impact
This helps to avoid the pitfalls that Financial Consultants CC and Michal
come with doing business with too Johannes Calitz
many providers and carrying too
many products. Through this process, 4
Durr vs ABSA Bank Ltd and Another
exposure to risk is limited. 1997 (3) SA 448 (SCA), at 463
IN FORMING A HOUSE VIEW, 5
FSB Workshop presented to IFAs
ADVISORS SHOULD LOOK TO (2013)
THINGS LIKE:
Who oversees the product
provider from a regulatory
OUR HARROWING
HEALTHCARE SYSTEM
For most South Africans access to the best COVER looks at the access to medical aids
private healthcare is not just a priority, it and the expenses involved, and the need to
is essential. There is no disputing the fact ensure that costs do not grow further out of
that the public healthcare system has all but reach. We also look at consumer education
completely collapsed in most provinces. On and the role of the intermediary, as well as
the other end of the spectrum is a world- the loyalty programmes contribution to
class private healthcare system that will the industry. Finally, we chat about the hot
literally cost you an arm and a leg if you do topic of the Demarcation Regulation, and
not have appropriate medical aid or health how insurers are dealing with the future
insurance. changes.
The rise of non-communicable Against the backdrop of the rising tide For example, Zurreal rewards members
of NCDs, which have been fuelled for simply undergoing routine health
diseases (NCDs) during
by tobacco and alcohol use, physical checks aimed at identifying problem
the past decade has seen inactivity, unhealthy diets and obesity, areas early on. Combined with
the healthcare industry loyalty and lifestyle programmes medical scheme cover that provides
have come to the fore as a means to superior benefits, prevention and
undergoing a major shift from incentivise members to adopt healthier cure are seamlessly integrated while
traditional models of curative behaviours in order to stem the tide of allowing members to earn cash-back
care to more preventative costly and at times deadly, NCDs. rewards along the way. Other rewards
include exceptional education, gym and
models focusing on holistic According to Arnold, lifestyle sporting rebates, discounts at selected
wellness. In response to this, programmes have proven their stores and even a free 24/7 telephonic
mettle in terms of transforming the legal helpline, to mention but a few,
the market for healthcare healthcare industry and improving he says.
lifestyle programmes has clinical outcomes, reducing healthcare
costs and improving the disease profile However, Arnold cautions that while
experienced astonishing
of members. The sophistication some schemes may have impressive
growth in South Africa. and innovative design of lifestyle loyalty programmes on offer, these
programmes today has enabled the schemes do not always offer good
Latest statistics from the World Health industry to collect valuable data, which value when it comes to benefits. A
Organization (WHO) show that NCDs, delivers enormous insights into the lifestyle programme should offer quality
which include cardiovascular diseases, behaviour of healthcare consumers. health benefits, first and foremost, to
certain cancers, chronic respiratory Lifestyle programmes are no longer consumers. Rewards should also not be
diseases and diabetes, are by far the about retention but rather about holistic the overriding reason someone chooses
leading cause of death in the world, wellness and active engagement with to belong to a medical scheme. Rather,
representing 63% of all annual deaths the lifestyle programme, he says. the member should look at the overall
and approximately 35% of deaths benefit structure without the frills and
in South Africa, says Mark Arnold, Many people view healthcare cover choose a scheme that will be there for
Principal Officer of Resolution Health as a grudge purchase, one that should them in their greatest hour of need,
Medical Scheme. provide immediate benefits and results. he concludes.
JH: In terms of the commssion, that it is worse than people think. The
they have tried to regulate the restriction on commission levels does
commission in the Insurance Act, but not take into account that Gap Cover
with reference to commission in the premiums are substantially lower than
Medical Schemes Act which has medical scheme contributions and that
caused major interpretation problems. same level of advice is required for
You have slightly different concepts both products.
here. On the insurance side, you
have intermediaries, binder holders, TK: If the Dermacation Regulations are
and people performing outsourcing accepted as is, what do you expect the
functions. Intermediaries interposes consequences to be
between the clients and the service
providers, performing a very specific EvdV: I wonder if intermediaries will
function. That concept is not the same still have an appetite for these types of
as a broker within the Medical Schemes insurance products? Firstly, there will
Act, as this broker has a much wider be massive cost increases if they are
meaning and services rendered. A treated as medical schemes. Secondly,
broker service in the Medical Schemes there is a lot of uncertainty being
Act encompasses all the concepts created by having these categories, and
intermediary, binder services and there is the power to reject a product
outsourcing services. completely. Lastly, no one will want
to sell it based on the low commission
membership until their health status deteriorates and then Parkinsons disease 0.5 0.8 60.0%
secure full benefits within 6 months. Chronic renal disease 0.2 0.3 50.0%
Systemic lupus
0.16 0.22 37.5%
erythematosus (SLE)
This practice has been widespread in medical schemes and
the cost impact is abundantly obvious. The graph below shows
hospital costs from 1990 to 2010 (stated in 2010 prices). It is We have to accept that human nature drives most people
very clear to see what happened to costs from 2000 when the to act to their advantage if they are given the opportunity.
Consumers select against the system and the result is that loyal
new MSA came into effect. Prior to 2000, risk rating and full
members who conscientiously maintain their cover have to
underwriting was permitted by medical schemes.
carry the added cost burden resulting from opportunism that is
legitimised by an intrinsically unfair system.
The only manner in which a rights based framework can be
sustainable is if membership of the entire system is made
mandatory. This would mean everyone contributes fairly and
no anti-selection is in fact possible.
It is disingenuous for the medical scheme regulator to claim
that health insurance is harming medical schemes when it is
abundantly clear that the existing policy framework within
which they operate is what is causing the harm and subsequent
rampant cost escalations.
If NT imposes this same rights-based framework onto health
insurers the same cost problems will bedevil the insurance
industry.
BROKER COMMISSION
Further evidence of anti-selection is shown below the Further so-called alignment between the two industries has
average number of dependents per member in medical been proposed by restricting broker commission on health
schemes shrunk by nearly 20% from 2000 to 2010. This insurance products to 3% - the same level as medical schemes.
shows that members selectively insure their dependents
based on their health status with the knowledge that they However, this entirely ignores the massive disparity between
can join and obtain full cover after the waiting periods have costs in each industry - the average contribution to a medical
passed if their health status changes. scheme in 2014 is R2,900 whereas the average gap cover
premium is R113.
Considering that the advice process for an intermediary is very
similar for both products, it cannot possibly be considered an
alignment. In fact it can rather be considered a de facto closure
of the health insurance industry since which broker is going
to subject themselves to the FAIS risk and effort of the advice
process in order to earn R3/month?
CONCLUSION
It is very disconcerting that after numerous well written and
In the table below we can see from a CMS study performed factual submissions on the first draft of the regulations, that
early in 2014 that the burden of chronic disease is the contents of the 2nd draft are still driven by ideological
increasing dramatically over time. This clearly indicates that conjecture, tacitly attempting to defend a healthcare policy
healthier members are opting out of medical schemes and/ framework that is so clearly unsustainable.
or sicker members are joining. Treasury would also do far better to await the findings of the
Competition Commissions healthcare inquiry, which may well
The prevalence of chronic disease in an insured population
shed much needed light on the intrinsic problems within a very
is a strong indicator of substantially higher hospital costs. It
complex industry.
is therefore no surprise to see the rampant increase in hospital
costs since 2000 and is emphatic evidence that this current
regulatory framework is unsustainable. 1
Bonitas, Discovery Health, Medihelp & Momentum Health
Opening doors to
affordable healthcare
people can easily access cost-effective
healthcare at affordable premiums.
This has opened up private healthcare
to over 400,000 low income people
who did not have such access in the
past.
2014/08/22 12:27 AM
Cover 297x210mm.indd 1 2014/05/06 11:43 AM
healthcare
Under siege:
This would have a profound impact on
the quality of service delivered to our
medical scheme clients, many of whom
are joint Gap Cover clients.
PR
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Payment
fraud on
the rise
KPMG has noted a new trend in The requested (forged) documents POSSIBLE SOLUTIONS:
were then provided in a matter of KPMG suggests implementing the
relation to business fraud, which following proactive solutions:
minutes via email communication.
poses a serious risk of significant The documents appeared to meet the
financial loss. Lucas Chiloane, Institute a process in which approval
from at least two senior members
Manger in Forensic Technology in the accounts department is
at KPMG and Roy Waligora, required before any changes to
FRAUDSTERS SEEM TO BE
Partner at KPMG. supplier details are made.
TARGETING BUSINESSES
Make a simple call to your
A payments fraud scheme is on USING SUPPLIER OR VENDOR regular contact at the supplier to
the rise exposing businesses to BANK ACCOUNT DETAILS. confirm the change in details.
potential financial and reputational
loss. Fraudsters target companies by Verify all the details (e.g. address,
pretending to be from suppliers and phone number etc) on the change
divert otherwise valid payments to the letter and whether the signatory
requirements necessary to execute is employed at the bank issuing
fraudsters bank account. the change of supplier bank details on the change letter. The details
the system. Email spoofing tactics - supplied by the fraudsters are
Fraudsters seem to be targeting
which involve using technology tools usually fictitious and are designed
businesses using supplier or vendor
bank account details. In one such case, to disguise the source or sender of an to obfuscate verification thereof.
a fraudster contacted an individual, a email, and make it appear as though it
had been sent from a legitimate email Put in place regular data analytics
relatively junior staff member, in the or monitoring procedures to identify
accounts department and said that they address - are normally used to send
recurring changes in supplier details.
were calling from one of their suppliers the requested documents.
who wished to inform them that their Ensure that all supplier invoices
The fraudsters take the time to gain reflect bank account details and
account details had been changed. The
an understanding of the business the relevant purchase order number
accounts clerk, as normal, requested
and establish with which suppliers before being processed for payment.
proof of the change in bank details in
businesses deal as well as which
the form of: Allocate a dedicated supplier number
individual in the accounts department
to target. In some instances supplier to each supplier, to be quoted on the
a signed and stamped letter from invoice for identification purposes.
the bank confirming the change account details are altered, and as
in bank account details; and soon as the payment is processed, the Consider an arrangement whereby
records are restored. This happens only duly authorised individuals in
a signed letter from the supplier on in cases where the fraudsters work the supplier firm sign each invoice for
the suppliers letterhead, confirming in collusion with internal accounts comparison with a signature held by
a change in bank account details. personnel. the creditors department.
A potential nightmare
Delictual claims for pure economic loss
The first of two articles The background to the matter was that Interference with a contractual
BY BRIAN MARTIN, the first Plaintiff was a professional relationship is present where a
Executive Director, Renasa hunter and a registered licence holder third partys conduct is such that a
for big game hunting activities in contracting party does not obtain the
South Africa. He has placed a series of performance to which he is entitled ex
Claims for pure economic loss advertisements in a USA magazine for contractu, or where a contracting partys
hunting safaris and an agreement had contractual obligations are increased.
suffered as a result of the
subsequently been concluded with the
wrongful actions of others are publishers of the magazine that they The learned author,, noted that this
exposition of principle is subject to the
always particularly problematic would bring 50 of their top clients to
general rule in South African Law that
the first Plaintiffs ranch for hunting
for insurers. These claims arise safaris. This arrangement would last for only the intentional interference with
where the established wrongful the contractual relationship of another
a period of five years.
in principle constitutes an independent
conduct of a party causes delictual cause of action. However,
Following upon the first Plaintiffs
another to suffer economic loss arrest, the contract was cancelled South African courts have, as a general
by the USA partner. The evidence at rule, refused to extend delictual
without this being directly linked
the trial was that the decision of the liability for negligent interference
to damage or harm to persons or magazine to terminate the relationship with a contractual relationship beyond
their property. with the first Plaintiff was based solely historically justified instances such as:
upon the incident which led to the first
- the delictual action of the master
Our courts in the past, whilst Plaintiffs arrest.
for injury to his domestic servant
recognising that in certain
The claim of the two Plaintiffs was ( now abrogated by disuse); and
circumstances a wrong doer may be
liable for economic loss occasioned based upon the premise that the - the right of a person who is in
by their wrongful action, have been proposed hunting trips arranged possession of property in terms of
slow to expand the ambit of the through the magazine in the USA a contract with the owner, to the
dictum for fear of creating an area could not take place due to the extent that he has a direct interest
of undetermined liability and with first Plaintiffs unlawful arrest and in the economic value of the thing,
potentially large damages becoming detention. The inability of the first to institute an action against a third
payable to a Plaintiff. This could have Plaintiff to host the proposed trips as party who damages that property.
serious consequences for defendants well as the adverse publicity which
and their insurers. the incident received had caused the The court noted that the Appeal Court
Plaintiff to suffer a loss of income and had on previous occasions stated that
This complex area of legal liability profit, which the parties agreed was in the law takes a conservative view on
recently came in to sharp focus before the nature of pure economic loss. the subject of the expansion of the
the Supreme Court of Appeal in the Aquillan remedy beyond what the
case of the Minister for Safety and The court noted that the term pure authorities have recognised in the past.
Security vs Scott [2014] ZASA 84. In economic loss in the context of the This reflects the continuing concern of
this case the Plaintiff and his company Plaintiffs case, related to financial courts to guard against the spectre of
sued for damages following upon the loss which does not arise directly from indeterminate liability. In the present
first Plaintiffs unlawful arrest after he damage to the Plaintiffs personal case, so the court noted, the police
had become involved in a brawl. When property, but arose as a result of however, had no knowledge of the
the dispute came up for determination a negligent act itself. This included contract or its terms, as relied upon by
in the High Court, the first Plaintiff was matters such as a loss of profit, the Plaintiffs. There could be no talk
awarded an amount of R75 000.00 being put to extra expense, or the of an intentional interference in the
for general damages in respect for the diminution in the value of property Plaintiffs contractual relationship with
arrest and detention and an amount of (see Telematrix (Pty) Ltd t/a Matrix a third party.
R577 610.00 for wasted advertisement Vehicle Tracking versus Advertising
costs. His company was awarded a Standards Authority (SA) 2006 (1) The kind of liability which the Plaintiff
further amount of R49 268 289.00 in SA461). The court had regard to sought to impose on the Defendant did
respect of lost income which was in the principles set out in a published not fall within the historically recognised
fact the loss of contractual income and work, Law of Delict by Neethling instances of liability. On this basis the
profits which would have been earned who, in relation to claims based on claim of the company should fail.
had the first Plaintiff not been arrested an interference with a contractual
and unlawfully detained. relationship, stated:
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Editor
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.
RENDEZVOUS 2014
The business of
insurance is insurance
cover
Industry intelligence to financial professionals
This years conference content had a strong focus Approach two - creating an environment where business has
the opportunity to grow and thrive.
on regulation, with various speakers and panels
A strong healthy insurance and investment industry will be
addressing and discussing current and proposed best equipped to provide consumers with appropriate value at
regulatory issues. an appropriate price. Growing their customer bases is essential
for the economic, social and political future of our country.
I still hold the belief that the focus of our regulators should be I would like to urge Treasury and the FSB to also focus on the
more balanced. The aim of the Regulator should not just be second approach, acknowledging the value added by the
about protecting the customer by getting companies to follow Insurance and Investment industries and working towards a
certain set of rules, be they prudential or market conduct. On regulatory environment that promotes growth and vibrancy in
page 10 of this magazine Jonathan Dixon is quoted as saying our industry.
the following during his presentation: Through this vision
customers can have confidence and trust that they are dealing Successful conference
with firms that will keep their promises and treat them fairly. As you will see when paging through this magazine, COVER has
On the same page Treasurys Ismail Momoniat said: National again played a big role at the 2014 conference and we would
Treasurys goal is to make the financial services sector safer to like to thank the IISA and in particular, Pat Hunter, David Harpur
serve customers better. and Angela Harpur for allowing us the privilege of participating
on so many levels.
This customer-focussed approach, without a fair amount
of promotion of the benefits awarded to customers by a I believe our presence made a difference to the success of the
healthy, strong insurance and investment industry speaks to conference and we will continue to strive towards that.
an underlying relationship based on policing and distrust. I would also like to thank our various partners and sponsors
Certainly there should be a good set of rules to ensure at the event for their support in making the event a success:
customers are treated fairly and protected, and yes, there Genasys Technologies and Oakhurst Insurance for the Flip
should be good policing to bring rogue players into line. The Im in a Fliek initiative, Zurich Insurance for the conference
industry has always been eager to push those aims. interviews, Allianz for the COVER Awards Dinner and Fulcrum
However, I would like to suggest that the regulator follows a for the filming of the conference presentations. Without you
dual approach to their own Twin Peaks: guys we would not have been able to do it.
Approach one creating an environment where customers can We look forward to an even more exciting 2015 conference!
safely and with confidence address their financial needs and, Tony
CONTENTS
A World Class Event
Welcome to the 2014 International Insurance Conference Magazine, brought to you by COVER Publications.
Introductions
Two approaches to Twin Peaks Tony Van Niekerk 1
World Class Education David Harpur 4
Debating critical issues Justus Van Pletzen 6
Expectations and concerns Barry Scott 7
SAIAs plan of action Themba Gamedze 8
Presentation Summaries
Tomorrows risks Sheralee Morland 9
The end goal - Jonathan Dixon 10
To regulate, or not to Ismail Momoniat 10
Intermediary trends David Davidson 12
All about human behavior Adrian Gore 13
Changing driver behavior Anton Ossip 14
Dont empower, emancipate Bonang Mohale 16
Economic disaster for the industry Hugo van Zyl 17
Clients real problems Stephen Cross 18
Africas time Giles Ward 19
Prepare to be best Mike Pritula 22
Africa open for insurance business Corneille Karekezi 23
Reacting to market needs Paul Jardine 24
Fair advice, fair pay Panel discussion 26
Africas sustained growth Allianz panel discussion 28
Conference fun
Exhibitors strut their stuff 30
Rocking the haunted mansion 32
COVER and Allianz awarding the maestros 34
AIG welcomes you to the conference 36
Hollard take a break from business 38
COVER was everywhere! 42
AIGs Academy 44
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Sustainability of motor insurance Policyholder Protection Scheme, which will see a fund being
Major stakeholder groupings came together under the developed in order to protect consumers in the event of the
leadership of the SAIA to deal with vehicle crime in the 1990s failure of an insurer
called Business Against Crime South Africa. Third party Cell Captive Review
Today claims in motor insurance business come from motor Ongoing binder regulation issue
accidents and the cost of vehicle repairs. Through the
suggestion of the SAIA, Business Against Crime is developing a A review of the ombudsman landscape
strategy to deal with road safety.
National development plan
We need to engage with government to re-introduce a system SAIA has acknowledged the importance of the National
of compulsory third party property insurance. Development Plan and our Board has made it a priority on the
SAIA agenda. A group of CEOs are responsible for developing a
We need to put in place an enterprise development initiative
strategy for SAIA.
to assist the growth of small black owned panel shops and
address the issue of alternative parts and the impact of motor Many of the outcomes expected from the NDP will not happen
warranties on this. if risks are not taken into account as part of the engagement
between government and potential investors.
Industry transformation
There is a sense of frustration at the slow progress of An investor looking to set up a factory in the country will
transformation in the sector. The much awaited Financial not do so if basic quality infrastructure is not in place thus
Sector Code (FSC), gazetted in 2012, is now in force. The hindering job creation.
standards have been finalised, and the training for the industry
is complete. Much needs to be done to achieve the objectives Climate change
of the Code. We are engaging with government about the need to expand
the reach of agricultural insurance to emerging farmers, yet at
As an industry we need to embrace transformation, to the same time multi-peril crop insurance is under threat.
enhance the level of relevance that our industry can have in
communities that currently do not have access to insurance. The SAIA has started to engage on these matters through the
Insurance is a necessity, not a luxury and the more people are industry Strategic Risk Forum, but clearly more needs to be
brought into the protective net of insurance, the more cost- done, particularly in terms of the long-term threats these
effective that cover can become. issues pose to ensuring food security.
What you do
today can
improve all your
tomorrows.
Sheralee Morland, IRMSA, delivered her of technology come various risks like cyber crime and fraud.
She asked, Does increased use of technology create shifting
presentation at the International Insurance consumer preferences and new risks to insure? She spoke
Conference on the risks of tomorrow. She about the possible impacts of social media on reputation risks
and protection of personal information.
introduced her topic, It is difficult to predict the
Today
future, but although that is the case, we should
Morland quoted science fiction writer Ursula K. Leguin: The
not be deterred from preparing for it. only thing that makes life possible is permanent, intolerable
uncertainty; not knowing what comes next. Morland said
Morland used the anagram FUTURE to illustrate how we can unfortunately the question of uncertainty generates more
anticipate tomorrow. questions, rather than answers.
Forgotten/past Relevant
Morland said the secret to success is staying relevant, and
Understand/underpin
finding solutions to the risks mentioned that we face today
Today and may impact tomorrow, such as: climate change and
extreme weather events; catastrophes, terrorism and war;
Uncertainty demographic shifts in core markets; emerging markets; cyber
Relevant crime; fraud; social media; people risks; client centricity;
insufficient infrastructure and unemployment, to name a few.
Emerging/Future
Emerging/Future
Forgotten/past She said, We must do what we can now to anticipate the risks
Morland said we must use the past as a predictor of the future. of the future.
She explained with examples of historical innovation how
individuals and organisations can learn from past mistakes to Morland concluded: Short-term personal lines insurers
improve the future. have their challenges and need to address these promptly
to ensure they remain relevant. She said that, in predicting
Understand/underpin the future the customer has expectations, and is top of mind
Morland quoted, What you do today can improve all your for regulators. Technology has resulted in consumers and
tomorrows. What risks do we know today? She cited climate businesses wanting simplicity, transparency, quick and timely
change, extreme weather related risks, terrorism, war, transacting and value for money.
urbanisation, growing populations and catastrophic events as
She said that you cannot predict the risks of tomorrow, but
known risks in 2014.
you can be better prepared. Morland ended with a quote by
She also spoke about the risks posed by emerging markets, Steve Jobs, Lets go invent tomorrow rather than worrying
tougher regulation, and integration of technology. With the rise about what happened yesterday.
constitutional or not? It is constitutional, he said, and the rest of Africa, and identify the constraints to growth on the
industry will die if it was left free from all law. continent.
Momoniat said the 2008 financial crisis had caused the Know your customer
international focus to shift towards strengthening macro- Do insurers know who their customers are and what their
prudential and micro-prudential measures. The G20 has obligations are towards them? Current challenges facing
also adopted principles on consumer protection and on the short-term industry are poor risk management practices,
innovative financial inclusion, he said. These principles rest weak internal controls, and lack of policyholder data.
on the three pillars of protection, access and education.
Momoniat said insurers need to demonstrate greater
Financial inclusion ownership of policyholder data and improve risk
The government wants to promote better access to the management practices. He said the industry also needs to
financial services industry for all members of society, strengthen the current Ombud framework.
said Momoniat. To do this we need to ask, are the current
Insurance sector reforms focus on strengthening insurers
products appropriate for the lower income market?
capital, better risk management and governance, enhanced
In addition to a safe and stable financial sector, the
reporting and disclosure, and ensuring fair treatment
government wants to see fair treatment of consumers, of customers. This will be enabled by regulation on
and an inclusive financial sector that is well governed and binder rules to improve governance over intermediaries,
efficient. demarcation regulation over health related products like
Targets for insurance gap cover, and consumer credit insurance.
The Financial Sector Charter has set targets for the According to FinScope 2013 the use of short-term insurance
insurance industry. The industry has undertaken to make products in South Africa is low. Momoniat said National
available appropriate and affordable products to the poor Treasury is concerned about the poor market conduct in the
and underserved. industry.
The short-term insurance industry and the government In conclusion, Momoniat said South Africa has a strong
need to engage on the following challenges: short-term insurance industry, with great potential for
How can the short-term industry grow faster in South Africa innovation. He said the industry has made good progress
and into the rest of Africa? How can the industry provide with prudential requirements, but more work is needed
more and better products to consumers, get better coverage in market conduct and financial inclusion. He said that
for all consumers, and help reduce the costs of the current more can be done in developing more appropriate products
expensive model? for the low- to middle-income market, and more must be
done to lower costs. He called for greater engagement
Beyond Africa, what are the opportunities? He said we need between the industry and National Treasury to meet these
to look at how the government can help expand to the challenges.
Shared value
Societies are expecting more from its institutions, said Gore.
He cited Time Magazine as saying that millennials are more
tech savvy, and more value and socially conscious.
Materiality
Adrian Gore, CEO of the Discovery Group, spoke Health and life insurance industries are important to society,
said Gore. South Africas health expenditure is 8,8% of our
about the application of behavioural science in GDP. Health expenditure becomes a massive burden on
insurance. society.
Ossip said traditional pricing is not fair, and is determined by Creates awareness and ability to improve driver behaviour
rating factors like gender and age. Telematics brings the pricing Traditional pricing is not fair;
curve close to perfect pricing, as it enables positive selection
by good drivers. Good drivers get good rewards, regardless of Assessment of actual driving risk when determining
age or gender. price
Cost drivers are causing benefit reductions and premium
Cost drivers of premiums are accidents, theft, hijacking, increases;
weather events, etc. Telematics shows the cars normal
behaviour versus abnormal behaviour, and can warn the Innovation antidote to cost drivers enables life saving
insurance company when something out of the ordinary, like a benefit features
hijacking, might be taking place. More consumers are buying motor insurance direct
Ossip rejected the perception that technology replaces the Enable the financial advisor as a risk coach.
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Aquarius_Adverts.indd
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2014/09/03 11:57 AM 2:04 PM
INTERNATIONAL INSURANCE CONFERENCE SOUTH AFRICA 2014
Mohale explained the four paradigms of creating synergy Use your legacy for inspiration.
within the workspace. Use guiding principles for decision criteria.
First, I see myself. Then, I see you. Thirdly, I seek you out, and Use immediate recognition to reinforce desired behaviors.
lastly, I synergise with you.
Begin with the end in mind.
He said companies need to use these paradigms to make a
shift from a leader-follower model to a leader-leader model. Encourage a questioning attitude over blind obedience.
The leader to leader model consists of three mechanisms: Mohale concluded his discussion with the statement, Dont
control, competence, and clarity. just empower, emancipate!
The South African Insurance Crime Bureau is a Third party claims versus phantom passengers
non-profit company incorporated in 2008. It False licence and roadworthy certificates
is the only entity mandated by the short-term False international drivers licence and false passports and ID
documents
insurance industry to enable collaboration and
Cross border crime: Mozambique
facilitation in addressing organised crime and
fraud prevention on behalf of the industry.
middle class Africans has tripled over the last 30 years to 313 afdb.org/en/news-and-events/article/africas-middle-class-triples-
million; more than a third of the continents population[ii] and to-more-than-310m-over-past-30-years-due-to-economic-
growth will increasingly come from domestic sources. growth-and-rising-job-culture-reports-afdb-7986/
We believe that, in this next stage of the economic cycle, Excluding Libya, where swings in oil production skew the
[iii]
the African insurance market is set to grow at a rate ahead figures over recent years. Africa Development Bank, African
of GDP. According to new figures from AXCO, African written Economic Outlook 2014 and AXCO, Africa report, 2014. Even
premiums grew by 7,3% in 2012. This compares with closer including Libya, the insurance market grew faster than the
to 4% for the economy overall[iii]. economy overall, however.
Euro DPS
Customer Orientation in the Industry. Analytics are being used in every corner of the industry, and
it is important to ask, to whom does your chief data officer
In his speech Pritula addressed three themes: respond? How does your management team address the
topic of data? Savvy management teams should spend time
You are competing against the best in the world. Do you on where the sources can be used. Companies need a data
know what they are doing, and can you compete with them? acquisition strategy to create a digital eco-system within the
The industry is becoming more scientific and data driven. Can business.
you keep up? Science and data is here, and it will determine the winners
Customers expectations and risk profiles are changing. Do and the losers in the industry, said Pritula. Managers need to
you understand your customers? understand and implement data. So what should management
do?
Global competitors
Pritula said half of the largest 40 short-term insurers are Identify source of value;
multinational. Local South African competitors need to be Specify the data;
more aware of global companies, he said. Global companies
are becoming more global, and competition with these Build the models;
institutions is on the rise. Embed the data and models in existing processes; and
Global companies are also expanding more into emerging Promote adoption.
markets. Africa is as important a short-term market in terms of
premium growth as Western Europe, said Pritula. He showed Customer centricity
how domestic revenue has declined by almost 30% between How carefully thought-through is your customer strategy? How
the 1950s and 2013, making way for international revenue. well do you know your customers? Companies need to adjust
Where will we be in 2023? their processes to deliver better service. To do so, they need to
answer the following questions:
You will compete against the rest of the world, he said.
Are you aware of all the factors that drive customer loyalty
Science in the industry and consumer retention?
Pritula defined advance analytics as:
Are you taking advantage of opportunities to bring better
The techniques used in complex analysis of large amounts of products to your customers?
data, both structured and unstructured, that lead to improved
decision-making, changes to business practices, improved In conclusion, Pritula said: We need to modernise our
value to customers, and new revenue sources and new processes. We need to do much better in customer centricity.
It will no
longer be
business as
usual.
An extract from the presentation of Corneille However, we must add that the African industry needs the
support of non-African companies (insurers and others)
Karekezi, Group Managing Director/Chief who will also enrich the insurance climate with their capital,
Executive Office, African Reinsurance know-how, experience and innovations. To attract more
foreign investors, Africa must continue to improve its business
Corporation, at the 2014 International Insurance environment and build a more inclusive insurance industry.
Conference. All presentations are available from As this distinguished audience knows, the business of
the iiSA. insurance offers many unique value propositions to discerning
investors either directly or indirectly in the quest for superior
Since the beginning of the 21st century, the African economy yields and overall accelerated economic growth. Africa as a
has been growing in leaps and bounds. Net Foreign Direct continent is currently experiencing impressive growth that
Investment in the continent in 2013 was USD 43 billion. indicates room for significant growth in its insurance sector off
Around the same time, insurance regulators began to its currently low base (other than South Africa and Mauritius).
modify the laws governing insurance to create stronger and Even the regulatory and macro-economic landscape is
better managed companies operating in a well regulated improving to facilitate trade and investment and though
environment. Thus todays insurance industry is prepared opportunities for insurance development and growth abound
to benefit from the insurances of the many massive in Africa, only the innovative, creative, forward-looking and
infrastructural projects and oil and gas discoveries dotting customer-centric organisations would survive the impending
Africa. competition. It will no longer be business as usual.
The development of the insurance business in Africa In the past, African players seem to have taken a back seat in
requires both individual and collective actions from all the many new investment initiatives. To date, cross-border
stakeholders irrespective of the sector of the industry they investment in insurance is on the rise and should take the
belong. Opening Africa for the business of insurance is one front seat. I can only use this forum to call for a rethink and,
key action point. indeed, positive steps to sustain and deepen this trend. I count
African Reinsurance Corporation, by virtue of its establishment on you all to rise up to the challenge and tap into the many
agreement, is charged with the responsibilities of fostering opportunities opening up to discerning investors across the
the development of the insurance and reinsurance industry in continent.
Africa, promoting the growth of the national, regional and sub- This call for action, in a challenging and exciting Africa,
regional underwriting and retention capacities and supporting should not be driven only by financial returns but more
African economic development. I am pleased to say that Africa importantly by the call of duty to lift millions of people out of
Re, through its diverse foot-print across the continent, has poverty. This is what Africa Re has been established for and
been able to and will continue to fulfil these responsibilities. shall continue to pursue.
2014/09/03 12:03 PM
Cover 297x210mm.indd 1 2014/05/06 11:43 AM
INTERNATIONAL INSURANCE CONFERENCE SOUTH AFRICA 2014
The FIA is guided by the following principles as set out by the The challenges will be to design a model to cater for diverse
World Federation of Insurance Intermediaries: activities, because as we have seen, one size does not fit
all. RDR holds a potential threat to consumer where service
Intermediaries have the right to be remunerated fairly. delivery is compromised by prescribed remuneration.
Market agreements and limiting or imposing means of The biggest challenge would be to prevent a mass exodus of
remuneration are an infringement of basic free market knowledge and experience, as weve seen happening in the
principles. UK:
Intermediaries should be allowed to charge fees in addition 25% of firms exiting the market, with a 50% decline in the
to commission with agreement of both parties. number of advisors;
Van Pletzen said it is important that the definition of role
50% took tick box approach to compliance;
players can be clearly defined. What is advice and what makes
it different from intermediation? What is an independent 25% capitalised on RDR as an opportunity; and
service compared to a tied service?
There was a 30% increase in direct to consumer platforms.
Continued engagement and debate with regulators is
essential, he said. Communication is important to ensure RDR will affect everyone in the value chain
regulators and insurers do not tar all intermediaries with the Peter Dempsey, Deputy CEO of ASISA, asked, Why dont
same brush, and vice versa. people save?
Karekezitold the tale of how Africa Re was created in 1976 by Maidou concluded that it is important to partner with people
36 state governments signing an agreement to support each who understand local business. Its important to build
other. The African Development Bank envisioned a reinsurer relationships in Africa, she said. You cant run Africa from
that would cover the entire continent and retain maximum South Africa you have to go there.
for you.
Haunted mansion
rocks the conference
You get parties, and then you get Tracker parties.
The Monday evening saw all kinds of creatures of
the night come together for a fabulous time!
On the final evening during the stunning Mitch Marescia 2014 Award for recent excellence in service
to Underwriting Management
Allianz Gala and COVER Awards dinner, COVER
Willem Theron 2014 Lifetime Award for excellence in
announced the truly worthy recipients of our service to the Intermediary Environment
annual COVER EXCELLENCE Awards. Gavin Came 2014 Award for recent excellence in service to
the Intermediary Environment
The COVER EXCELLENCE Awards recognise individuals for their
extra-ordinary effort and dedication to an industry aimed at Junior Ngulube 2014 Lifetime award for excellence in
improving the financial security of the person at the heart of service to the Reinsurance Industry
our operations: the client.
Congratulations to all the winners and thank you for your
These awards acknowledge individuals who have made a important contribution to our industry. Find out more about
significant contribution to the effectiveness and reputation of the recipients and their dedication in the August issue of
our industry. COVER.
The winners of the 2014 COVER EXCELLENCE Awards Thank you to the Insurance Institute of South Africa for
Rene Otto 2014 Lifetime Award for excellence in service to hosting yet another magnificent International Insurance
Short-term Insurance Conference.
Suzette Olivier 2014 Award for recent excellence in service As Delphine Maidou (Allianz), Corneille Karekezi (Africa Re)
to Short-term Insurance and Simon Chikumbu (Aon Benfield Africa) emphasised
during the much anticipated Allianz Round Table yesterday,
Adrian Gore 2014 Lifetime Award for excellence in service to to be a sustainable industry we need to share knowledge and
Life Risk pool expertise, and we did just that once again this year. Read
Peter Atkinson 2014 Award for recent excellence in service more about this fascinating discussion on Africas sustained
to Life Risk growth in the COVER Conference Magazine.
Louis Fivaz 2014 Lifetime Award for excellence in service to Finally, thank you to every single person who makes our
Underwriting Management industry great. We hope to see you again next year.
The business of
insurance is insurance,
but we also made time
for fun.
aonbenfield.com/empower
Aon Benfield South Africa is a licensed Financial Services Provider. FSP No. 20658
Author and speaker Malcolm Gladwell said Abraham said there is no one size fits all for training in the
insurance market, as partners and brokers are a diverse group
it takes 10 000 hours of practice to become with differing skills levels and different requirements. Training
proficient at any given task. Training is an is tailored to the needs of individual business partners and
supported by summaries reinforcing the learning points and
essential component of success and thats a providing future reference material, he said.
maxim AIG takes to heart and puts into practice The content of the curricula provides specific insurance
with the AIG Academy. product training, as well as general skills like sales
and entrepreneurship, negotiation skills, constructive
AIGs Academy is designed to share AIG knowledge, skills communication and presentation skills. Modules deal with the
and insights with brokers and business partners, said Wayne legal and regulatory frameworks applicable to the insurance
Abraham, managing director of AIG Africa. industry.
We are acutely aware of the skills shortage in South Africa All training is validated by course certificates, and in South
and more particularly in Africa as a whole and offer an Africa attendees are awarded CPD points by the IISA (Insurance
annual curriculum which provides technical skills training, Institute of South Africa) for each of these courses. The AIG
Academy is a proven international concept, with established
covering topics from key products, legal, regulatory issues
best practices resulting from our experience in delivering
and administration issues, and on to advanced skills, such as
quality training throughout Europe and Africa, said Abraham.
management and entrepreneurship, Abraham explained.
By providing training for individuals, the broker and partner
Pointing out that insurance value is more than the products
network has access to quality learning which helps create
which offer risk mitigation across a wide range of assets and
the much needed skills which are essential to working
situations, he said the ability for brokers and partners to
constructively with customers to gauge the risks they face, and
work with their customers to deliver appropriate solutions is
deliver the appropriate insurance solutions to mitigate those
essential.
risks. The idea behind the AIG Academies is to support our
Thats where training to impart the necessary skills is partners in going beyond insurance to delivering insights and
indispensable. When products are combined with the skill of knowledge. When insurance brokers can engage with clients
individuals, customers benefit from insurance which protects on this basis, it provides the ability to strengthen competitive
them from the changes of the modern world. positioning to win and retain more business, he concluded.