04 Jan 2019
The past year was characterised by difficult economic conditions for companies and individuals alike. The VAT hike has had an especially tough impact on consumers, with price rises across the value chain putting pressure on the disposable income of our clients. This makes it more important than ever for a company like ours to continue innovating and to offer effective, efficient products and services that provide true value for money to our clients.
Among our 2018 product innovations were the Ultimate Retirement Income 4Life which provides a guaranteed monthly income during retirement. The Assupol Preservation Funds allow clients to preserve retirement savings from another retirement fund when they change jobs; while the Rewired for Retirement™ offering helps clients adjust to life after retirement.
On the regulatory front, a significant development was the introduction of legislation governing micro-insurance as well as the establishment of the two new regulatory institutions that will govern insurance companies under the Twin Peaks regulatory framework. We are confident this will accelerate transformation in the industry, broaden access to the formal insurance market and improve consumer protection by formalising market conduct and supervision.
For Assupol, a major event was the loss of our brand ambassador and South African cultural icon Bra Hugh Masekela. After six years of partnership, he become a close friend of Assupol. As South Africans, we owe it to him to continue spreading his message about the beauty, strength and resilience of Africa and its people.
It was a great achievement that, despite a challenging economic environment, we were able to increase our embedded value by more than 25%. For the first time, our in-force policy base rose beyond 1 million individual polices – a growth of 18% year on year
We increased annual gross premium income by 9%, we had net profits after tax of R847 million and the value of new business rose 11% to R388 million.
Our commitment to customer service and the principles of treating customers fairly (TCF), is paramount for our company. For this reason, the establishment of new, dedicated Quality Assurance teams is a significant achievement, one that will enhance our ability to offer affordable, appropriate products and advice to our clients.
The speedy payment of claims is another metric we place great pride in. We are here to help our clients through difficult times, so quick, hassle-free payment of claims is non-negotiable. During the past financial year, 74% of valid funeral claims were paid within four hours and overall, valid claims were paid within 24 hours
We are intensely proud of our staff. The way we look after our staff was positively acknowledged when Assupol was awarded the Platinum Achievement award in the 2018 Deloitte Best Company Survey. We were also awarded the Best Life Assurer Southern Africa by Capital Finance International (cfi.co) for the fourth consecutive year.
We gain great satisfaction from making a material difference in the communities we serve, so it was a privilege to be able to invest R11 million into 94 early-childhood development (ECD) centres in KwaZulu-Natal and Gauteng. We also partnered with the Department of Basic Education in a campaign to eradicate poor sanitation facilities at 100 schools in KwaZulu-Natal, Eastern Cape and Limpopo over the next five years.
In terms of future challenges, the economic headwinds faced by our client base are likely to continue over the short term. Despite this, we are confident that Assupol will be able to continue delivering good growth for our stakeholders though a number of exciting new initiatives.
Next year, we look forward to the growth of our new sales division, the Women Distribution Channel. A partnership with Omama Besizwe Investments, this initiative employs female graduates and provides them with insurance and advice-specific training as they study to become qualified financial advisors. Thus far, 60 graduates have entered the programme, but we look forward to significant expansion in the new year.
From a business perspective, we plan to continue focusing on what has made Assupol strong – cost-effectively and efficiently delivering needs-based insurance products and client services to our consumers. We will diversify our product and advice offering, and expand our markets through selective partnerships and better client interactions and engagements.
Our strategic focus for 2019 will emphasise diversifying our products, establishing new distribution channels, improving the quality of our business, and training and development of our staff.
Among these new channels is a strategic initiative with Ackermans, being rolled out as a pilot project, which sees Assupol establish an in-store sales and consulting presence in selected Ackermans branches nationwide.
In terms of what our industry can prioritise in the future, there is great potential for economic transformation through sector-led interventions to help extricate women and the youth especially, from poverty and inequality. Public-private and cross-sector partnerships offer great potential to effect changes beyond the individual capacity of companies and government departments.
South Africa has pressing societal needs, beyond the ability of any one organisation to resolve on its own. The solution is for companies to select areas of engagement where they can effect the most meaningful change and focus their attention there – as we have done in the areas of ECD, sanitation and skills transfer. We firmly believe that the biggest benefits are to be gained from stimulating sustainable development that can gain its own momentum and generate exponential benefits in future, as beneficiaries pass on the advantages they gain.