IIG Insights – “When Bricks Grow Wings”
Sponsored by: Sasria SOC Limited
Compiled by Daphne Peter
On the 17th October 2019 the IIG together with Sasria hosted the final Insight session for 2019. Titled “When Bricks Grow Wings” it was an opportune topic of discussion given our recent experiences of xenophobic attacks, services delivery protests and general political unrest.
The first speaker of the day was Dr Ralph Mathekga, a political analyst, whose topic focused on the South African Socio-Political landscape. He spoke frankly on the very relevant issues we are currently facing in South Africa today; the challenges with Eskom, The power we see with our Unions , the violent protests, and the general mistrust in our government. Dr Mathekga put into context for us our changing political ecosystem, a rather complex environment. He went on to question how we evaluate our democracy and how well our democracy is tracking in our current environment. He talked about the disruptions taking place in Parliament and broadened this discussion, posing the question – are there patterns of disruption, how are these impacting our society and what is the way forward?
In the past the ANC and DA were at the centre of our political ecosystem and responsible for defining social, political and economic policy. The year 2014 introduced a disruption to the centre of our political space, with the EFF and the DA moving away from the ANC in terms of policy making. This has brought about radicalization within the political parties, and this radicalization is what is affecting disruption and changing the political environment. According to Dr Mathekga, disruption is becoming the chosen method of communication and is causing the collapse of the centre. As a result, as a society, there is an abandonment of universal politics and a move towards group politics. Dr Mathekga expressed the need to strengthen our local institutions, as the local government presents a microcosm of the political landscape. Good governance is necessary to rebuild our economy. It’s our local institutions that will give citizens confidence to engage with our democracy again.
He concluded noting that, regardless of the “mess” within our society, the youth are not moving towards radicalization; there is still a sense of hope and potential, however we need to find our way back to a consensus government at the centre. Once the youth start to believe that change is not possible, there will be a move towards radicalization and the death of our democracy.
Our second speaker was Mr. Cedric Masondo, Managing Director of Sasria, whose discussion centered around the changing face of Sasria. Sasria celebrated its 40th birthday in 2019 and Mr. Masondo took us through the history of Sasria, how well it performed in the past. Prior to 2010 the loss ratio of Sasria was 1.67%. However, with the change in our political landscape we have seen a change in the performance of Sasria results, with the loss ratio growing to double digits in excess of 50%. Cedric took us through the journey of how Sasria has had to evolve, to become more client centric, comply with new regulatory environment, SAM, cost management and still trying to achieve business growth above industry norms.
In 2019 Sasria achieved its first underwriting loss in its history given the socio-political environment we find ourselves in. He shared the financials of Sasria and reassured the audience that Sasria is still a strong and viable company that has enough capital and reserves to meet its obligations. This also clearly demonstrates why we need an insurer like Sasria in our industry. Mr. Masondo presented the strategic objectives for the next 5 years, post 2020, with the focus areas on digitilisation, customer centricity, socio-economic impact and sustainability.
Mr. Masondo noted also that the current political environment has a direct impact on Sasria, as is evident from the increasing number of claims related to service delivery, and questioned the sustainability of the organization, if we do not improve political stability. Sasria’s directive is also, not only to balance the books, but also make a positive contribution towards society. To this end, there is a need to expand on its product base, by becoming more inclusive.
Our final speaker of the morning was Mr. John Lomberg, head of stakeholder relations and CSI at Santam. His presentation spoke to mitigating losses through public business partnerships, what he referred to as multi-sectorial partnerships. South Africa as a country has had three chronic stresses that it faces, unemployment, inequality and poverty, however there is a new monster that is rearing its head, called climate change. It is more frequent and more severe. Any efforts that that we have put in place to reduce unemployment, inequality and poverty is nullified by the impact of climate change on the most vulnerable in South Africa. John used the recent storms in KwaZulu Natal and Mozambique to emphasize his point and how those affected have been mostly affected.
Insurance is the DNA of the economy, as it has played a global role in rebuilding the economy after major losses. Rapid urbanization and high exposure to natural catastrophes and low insurance penetration renders communities vulnerable to catastrophe events. Currently there are low levels of understanding about insurance in some parts of government. Mr. Lomberg stated that the insurance industry is largely under-utilised as risk advisors to Government. He suggested that as an Industry, we should assist our local governments by encouraging better risk management practices with the help of our data sources, knowledge and expertise. He highlighted the benefits to working together with government to create stability and grow infrastructure and how this will cultivate sustainability in our business as well as society.
He went on to talk about the initiative that Santam has been involved in for the past 10 years, the adoption of a local municipality. Giving them guidance and training in areas such as fire and flood management, they are better equipped to mitigate their losses. Mr. Lomberg noted the partnership with Sasria, and the successes they have achieved in some of the communities they have gotten involved in. He further stressed the need for collaboration by industry members on such projects.
Our MC of the day, Tshepiso Chocho closed the session by thanking Sasria for their support and sponsorship in making this insight event possible