RISKSA MAgazine November 2012

THE VOICE OF THE INDUSTRY

6 009900 153315

MAPPING MEDICAL SCHEMES Lights, camera, insurance

•

Call centres to stay or go?

•

Life insurance for athletes

contents NOVEMBER 2012

10 62 30 features

regulars

Medical breakthroughs 24 and SA’s medical industry

Travel insurance for sports nuts 3 0 Lights, camera, insurance

36

The struggle for spares

66

For the win: insurance for sports players and athletes Protecting what’s personal: The POPI Bill

76 88

Medical records at risk

100

Call centres to stay or go?

104

A Binder Regulations refresh

108

News

126

What to see, what to do: Year-end holidays

36

142

short terM

29

F&i

65

life

75

erm

87

better business

103

lifestyle

137

66

142 FOLLOW US ON TWITTER @RISKSA Like us on FACEBOOK / RISKSA

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

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

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Publisher & editor Andy Mark Managing editor Nicky Mark Copy editor Margy Beves-Gibson Feature writers Hanna Barry Bianca Wright Grant Cyster Nick krige Art director Herman Dorfling Design and layout Gareth Gray Dries van der Westhuizen Vicki Felix Regular contributors Jenny Handley Kirsten Halcrow Clem Chambers Editorial enquiries PO Box 60320, Table View, 7439 Tel: 0861 555 267 Fax: 086 618 3906 E-mail: nicky@comms.co.za Website: www.risksa.com

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Opinions expressed in this publication are those of the authors and do not necessarily reflect those of the Publisher, Cosa Communications (Pty) Ltd, COSA Media, and or RiskSa (Pty) Ltd. The mention of specific products in articles or advertisements does not imply that they are endorsed or recommended by this journal or its publishers in preference to others of a similar nature, which are not mentioned or advertised. While every effort is made to ensure accuracy of editorial content, the publishers do not accept responsibility for omissions, errors or any consequences that may arise therefrom. Reliance on any information contained in this publication is at your own risk. The publishers make no representations or warranties, express or implied, as to the correctness or suitability of the information contained and/or the products advertised in this publication. The publishers shall not be liable for any damages or loss, howsoever arising, incurred by readers of this publication or any other person/s. The publishers disclaim all responsibility and liability for any damages, including pure economic loss and any consequential damages, resulting from the use of any service or product advertised in this publication. Readers of this publication indemnify and hold harmless the publishers of this magazine, its officers, employees and servants for any demand, action, application or other proceedings made by any third party and arising out of or in connection with the use of any services and/or pro-ducts or the reliance of any information contained in this publication.

from the editor Dear Reader, And so The Economist thinks South Africa is sliding into the abyss. The article ‘Sad South Africa – Cry The Beloved Country’ that appeared on 20 October speaks of South Africa’s economic and political decline. What do you think? With tougher economic times now a certainty and a lack of decisive political leadership, it certainly seems that our outlook is bleak. The Economist story also outlines the crisis we have in our education system.

Rising fuel costs and an expected increase in our electricity tariffs (some say expect another 200 per cent increase within the next five years) will have a knock-on effect on business, especially insurance business, where we can expect a fall in premium income as consumers battle to hold their heads above water.

None of this is good news, of course, and it doesn’t help to point out that there are many European countries in deeper trouble than we are. Being part of the solution could be as simple as just bitching a little less. And talking. We need to engage each other more, across all groups. Start today.

In this issue we take a look at binder agreements, medical aids and what the product line-up looks like for 2013, as well as at the future of call centres in a TCF environment. All the inside skinny you need to be the smartest guy in the room.

Enjoy the read.

Andy Mark

8

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Mapping

medical schemes

It's that time of year again. Medical schemes take centre stage as they launch their offerings for 2013. RISKSA takes a look at some of the headline issues facing schemes; the highlights from a few major schemes’ benefit changes; and we ask them to recommend benefit options for our case studies.

Hanna Barry

10

he healthcare landscape in South Africa is reflective of the parallel societies that coexist in this country. On the one hand, horror stories abound from a flailing public healthcare system, where a shortage of skilled professionals, the gross mismanagement of resources and inadequate patient care are a grim reality. On the other hand, the private healthcare sector ranks as one of the best in the world. However, it appears to be facing just as many challenges as its public counterpart.

T

Runaway costs Rising costs remain perhaps the biggest challenge facing medical schemes. Medical inflation is significantly higher than CPI, due to factors such as the increasing cost of medical technology and treatment, an increasing burden of disease coupled with increased life expectancy, non-healthcare expenses and solvency requirements. This serves to make affordable medical aid an ever-more fleeting reality.

“Medical schemes are facing the perfect storm when it comes to challenges for now and 2013. A number of role players have different expectations, which have culminated on the pricing of medical aid,” says Dr Bobby Ramasia, principal executive officer of Bonitas Medical Fund. “Consumers have higher expectations of the value that they should receive from their medical aid, while a number of service providers have expectations of receiving price increases that are above inflation. Yet resources in the healthcare industry are diminishing each year. This has now become a macro problem that requires high-priority attention.”

Connected to the spiralling cost of healthcare, especially from private hospitals and specialists, is uncertainty around the pricing of tariffs.

“Until such time as the cost of services can be capped, schemes will continue to face an increasing rise in costs, particularly for the provision of prescribed minimum benefits (PMB).This will continue to be a challenge until such time as a pricing committee is created in which all parties are fairly represented,” says Barbara Duffy, principal officer of Topmed.

The Health Professions Council of South Africa (HPCSA) is in the process of developing a tariff guideline, together with the industry, after it was threatened with legal action by healthcare professionals’ organisations for disregard to the input of affected practitioners. While the need for a tariff seems painfully clear, it is equally clear that South Africa cannot afford 

11

to lose medical talent. Discovery Health Medical Scheme (DHMS) says that the current tariff and coding system urgently requires updating to take into account new procedures, new technology, the changing costs of medical practice and the changing disease burden in our society. However, it cautions against inadequate remuneration for healthcare professionals.

“Our health data confirms that there is a severe shortage of healthcare professionals in the country and we believe that should they not be adequately remunerated for their training, skills and expertise, this shortage will continue to worsen. Ensuring adequate remuneration within a system that ensures long-term sustainability for the country's healthcare system, requires active co-operation from and between all key stakeholders,” it says.

But a number of stakeholders and role players with often conflicting objectives complicates matters. Damian McHugh, marketing manager at Momentum Health, agrees that the biggest issue in the private healthcare environment is the cost of using it, whether through selffunding or medical scheme membership. “Since these costs are not driven by a single entity, the relationship between all the parties involved is a rather delicate one.

12

Medical schemes try to alleviate some of this problem by negotiating rates with providers beforehand, but every scheme has a different level of bargaining power,” he notes. A quick glance over some of the benefit enhancement highlights will reveal that many schemes have contracted with specialists in order to reduce costs for their members. This is particularly pertinent when it comes to the problematic pricing of PMBs.

The problem with PMBs Andrew Edwards, executive principal officer at Liberty Medical Scheme, says that one of the scheme’s biggest challenges is paying for PMBs. “LMS has our members' best interests at heart. We oblige and pay claims for PMBs at the full rate charged by the doctor or other healthcare providers so that members are not held liable for any part of the bill. However, in the absence of guideline tariffs, the situation is potentially open to exploitation," says Edwards.

He adds that while it's not easy to determine PMB abuse, scheme incidences of inconsistent billing patterns, higher fees charged for PMB conditions than for non-PMB conditions, a difference in hospital and specialist diagnoses and the deliberate charging of ICD-10 coding to benefit from PMB reimbursement protocols, may well point to a degree of abuse.

Alan Fritz, executive manager of branding, communications and marketing at Bestmed reckons that, “PMBs will wipe out schemes that do not have a large enough risk pool and addressing the payment thereof at full cost is not sustainable.”

However, the CMS has taken a hard line approach to this issue and in its annual report celebrates its victory against the Board of Healthcare Funders of Southern Africa (BHF), in which the High Court confirmed the need for PMBs to exist. Medical schemes in contravention of the requirements on PMB provisions face the risk of being deregistered.

But it is unlikely that the BHF will take the decision lying down and no doubt schemes will support them. So this remains an issue to watch; as does the demarcation debate.

To demarcate or not to demarcate The CMS argues that health insurance products threaten to undermine the social solidarity principles of the Medical Schemes Act and offer inadequate benefits. “Health insurance products, such as gap and top-up cover, discriminate against the most vulnerable groups in society,” it notes in its report. Edwards thinks that these products do have a role to 

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play, provided that they are sold correctly.

“Not everyone can afford the top-of-the-range options and should have the right to insure themselves in other ways.

However, the problem arises when the line is blurred between what the medical scheme offers and what these products offer. Providers selling health insurance products might give the consumer the impression that these are in actual fact a medical aid product when they are not. It is therefore important that people know and understand what they are buying,” he says.

The fact that the matter has not yet been resolved makes it virtually impossible for brokers to offer consumers proper advice and so the industry will continue to watch demarcation developments with keen interest.

Admin expenses Along with demarcation and PMBs, high administration costs have also been taken to task by the CMS. In a circular released in September, the council expressed concern that administration expenditure, with specific reference to administration fees, which constitutes the bulk of nonhealth expenditure, remains unacceptably high in individual cases. “Medical schemes are encouraged to exercise caution when employing the services of third parties.

Trustees should ensure that such services add value to the scheme and its members, and the related fees should be reasonable, fair and aligned to services provided,” says Dr Monwabisi Gantsho, registrar of medical schemes and the chief executive of the CMS. Indeed, DHMS members demanded an independent review of its administrator Discovery Health, at its AGM in July. The Business Day reported at the time that Discovery Health’s administration fees were the second highest in the country, at R102 per average beneficiary per month. However, Discovery says that its non-healthcare expenditure is below the average level charged by open medical

14

schemes and within industry benchmark levels.

“The fees paid by the scheme to Discovery Health have been the only cost component in the scheme’s total expenditures that has been falling in real terms over the past number of years. Notwithstanding the efficiencies achieved to date, the trustees of DHMS and Discovery Health have created structures which will ensure that the scheme continues to benefit from reductions in administration fees as the scheme continues to grow,” says Discovery Health.

Anton Rijnen, CEO of Medihelp Medical Scheme, notes that total non-health expenditure in the medical schemes industry has shown a rising trend for the past decade and this is set to continue. “This includes gross administration expenditure, managed care services costs, as well as broker fees and other distribution costs,” he explains. “In terms of non-healthcare

“ The fees paid by the scheme to Discovery Health have been the only cost component in the scheme’s total expenditures that has been falling in real terms over the past number of years.”

expenses as a percentage of net contributions, Medihelp achieved 11.5 per cent in 2012, which is comfortably below the industry average.”

Blum Kahn, CEO of Metropolitan Health was critical of the CMS generalising in its accusations against medical schemes. “We welcome the call for transparency by the CMS; however, we caution them not to tarnish the industry with the same brush. We should bear in mind that the complexity of managing a medical scheme is probably going to continuously drive up the costs and we must look to streamlining processes and medical benefit design to eliminate unnecessary complexity over time.” Metropolitan Health’s non-healthcare costs sit at approximately eight per cent, which is well below the industry norm.

“The regulator has set an industry standard that states that non-healthcare costs should be no more than 10 per cent of members’ monthly contributions,” notes Kahn.

It is vital that trustees of medical schemes look out for their members’ best interests in this regard. Unfortunately, this is not always the case, as is evidenced by Medshield being placed under provisional curatorship as a result of governance concerns at the scheme.

Excessive payments to trustees were among a host of issues that the CMS was concerned about. Business Day reported at the time that trustees allegedly paid themselves retainers, consultancy fees and expenses totalling more than R10.4 million from January 2008 to October 2011.

Solvency issues notwithstanding, in an environment where medical schemes are not growing at an exponential rate, they certainly do not have this kind of money to spend on their trustees.

Growing pains “One of the ongoing major challenges facing schemes is membership growth. All schemes need to grow their membership within the correct profile to ensure a constant in-flow 

It means they are well take

n care of.�

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For more information on the best suited medical cover and preventative benefits, for you and your loved ones, contact us on 086 000 2378 or service@bestmed.co.za www.bestmed.co.za Bestmed Medical Scheme is an Authorised Financial Services Provider (FSP no. 44058)

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of young, healthy members to maintain and improve the risk profile of the scheme,” says Peter Jordaan, principal officer of Fedhealth.

Since medical schemes operate on the basis of a community risk pool, it is vital that schemes have a sufficient number of younger, healthier members, who typically claim less, in order to subsidise the healthcare costs of the older members, who typically claim more.

“A scheme with a healthier membership base can offer more competitive contributions to its members, as healthier members tend to claim less,” says McHugh.

However, attracting young members is an art all its own. DHMS has been highly successful in this regard, arguably as a result of its Vitality programme, which offers various rewards such as discounts on gym membership, groceries

and flights. The scheme notes that over the past decade, the overall industry has grown from just below seven million beneficiaries, to about 8.5 million beneficiaries. But this growth has largely taken place as a result of the formation of the Government Employees Medical Scheme (GEMS) in 2005 and the consequent addition of 1.6 million beneficiaries to the closed schemes market.

The open scheme segment of the market has in fact decreased over the same period.

However, DHMS has shown substantial member growth over the past decade, with 991 766 beneficiaries in 2001, growing to over 2.4 million beneficiaries in 2012. This means it accounts for just under half of the open scheme segment; a disproportionately large market share and certainly unique to South Africa.

But vitality programmes, which have now been adopted by many schemes, are not only important for attracting younger members. They are a vital means of practising preventative, and not only curative, care. Fritz notes that lifestyle and preventative care strategies from healthcare funders are crucial, due to an upward trend of all major illness conditions.

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“The curative approach of schemes today is a death knell for medical schemes,” he says.

“Not many new members take up membership of medical schemes and risk pools are getting older, meaning claims propensity of members is getting higher, making smaller schemes less viable and even larger schemes vulnerable to sustainability issues.”

A difficult operating environment has indeed led to more large schemes. The CMS notes in its report that from 144 medical schemes registered in South Africa in 2000, the number dropped to 97 in 2011, compared to 100 schemes at the end of 2010. “As economic conditions get tougher and competition remains fierce, more amalgamations are expected in the open medical schemes market in future,” says Rijnen. “The market share of the larger open medical schemes is growing, with the top five open schemes accounting for 78 per cent of the open market share.” In spite of appearances, the CMS says that the industry is far from being an oligopoly and is in good shape, with a high average solvency level.

Along with the challenges they are facing, medical schemes told RISKSA about some of their major benefit highlights for 2013. We've listed a few, but this is by no means exhaustive and it’s important to do your own research before advising clients.

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Access to any private hospital Wider range of benefits paid from risk fund TOP Pre-Natal and Maternity Benefits Additional Wellness Benefits Healthy Lifestyle Rewards

As part of TopMed’s service offering, we also partner with a number of organisations including Momentum Medical Schemes Administrators, CareCross, ER24 and a broader network of pharmacies to ensure excellent service on all levels.

For more information about TopMed Traditional, TopMed Professional, TopMed Savings, TopMed Hospital and TopMed Network, please visit www.topmed.co.za or call 0860 00 21 58.

16

2013 benefit highlights Medihelp A network option on Medihelp’s Dimension Prime range will cost members on average 10 per cent less in subscription fees in 2013.

This means that Medihelp’s annual weighted average increase of 11.2 per cent for 2013 will amount to increases of between 0 per cent and 2.4 per cent for those members who choose one of the Dimension Prime network options next year. Services for this network will be provided primarily by private hospital groups, comprising 59 hospitals. Members will enjoy the same benefits as those on the standard options. Additional enhancements include benefits for child birth at home on all options; hip, knee and shoulder replacements for non-PMB cases are now included in the Dimension range; and maximum benefit limit amounts have increased by around six per cent on average on all options.

Bonitas The introduction of a specialist network will prevent co-payments by members when the network is used, while a childhood illness benefit provides additional GP consultations which are payable from risk.

Fedhealth Fedhealth has reduced members’ self-payment gaps on their day-to-day benefits by as much as 42 per cent. This has been done by decreasing the safety net levels and increasing the annual day-to-day benefit amounts.

Topmed A hybrid option means members pick up a portion of day-to-day claims from savings on a monthly basis and thereafter, the scheme funds benefits from a routine benefit, thus offering a safety net for members who want to limit their out-of-pocket exposure. This option provides a comprehensive major medical benefit to include a maternity programme and Topmed’s wellness benefits (see table pg 18).

Liberty Medical Scheme On LMS’s new Prestige Option, everything is paid from risk and there are no self-payment gaps. While it is expensive, due to the structure of the benefits, the service support is significant.

Each member is allocated a service consultant who is their port-of-call at any time of the day or night. A further enhancement to LMS’s offering is the efficiency discount options, called the Select range of options. This has been introduced on the scheme’s most popular options. It limits the service providers that members can access chronic medicines from, reducing the contribution cost by 10 to 15 per cent. This is particularly suitable for younger, healthier members who don’t need access to chronic medication.

Bestmed Bestmed has included in all benefit options biometric screening that will be funded out of the scheme to create awareness of screening for diabetes and cholesterol, for example.

Discovery Health The DHMS insured network benefit is being expanded to include more cover for day-today generic medicine, blood tests and GP visits. This benefit kicks in once the medical savings account has run out. From January 2013, members of DHMS and all other schemes managed by Discovery Health who are registered on the chronic illness benefit for hypertension, hyperlipidaemia, diabetes or asthma will qualify for up to 25 per cent cash back on a wide range of items purchased from Dis-Chem stores countrywide.

Momentum Those members who retain a high level of activity on the HealthReturns programme for at least three consecutive months will enjoy additional GP visits in 2013. Members can earn up to R4 500 a year in HealthReturns to supplement their day-to-day healthcare spending, plus up to four additional GP visits every three months. 

17

Comparing apples with oranges Medical aid is complex. There seems to be no way around that. Of course, this stems largely from the fact that medical care is complicated. There is nothing simple about endometrial ablation, myringotomy or a frontal lobotomy. But this does make matters incredibly difficult for Joe Soap, especially when benefit options vary so widely between medical schemes that it’s near impossible to compare apples with apples.

“One can understand the caution issued by the Council for Medical Schemes regarding schemes sugar coating the reality and misleading the public. It could be argued that terminology in the industry is designed to confuse consumers. For example, describing medicines received from a GP in so many different ways (such as prescribed medication, day-to-day medication and acute medication) when they all mean the same thing,” says Clayton Samsodien, managing director of Genesis Healthcare Consultants.

“Unfortunately, with the annual increase descriptions, it doesn’t all mean the same thing. There are significant differences between average, weighted and headline increases.

You have to wonder why these terms are being used. Perhaps council will regulate these terms as well to ensure one way of describing the annual increase is used. The industry is without guideline tariffs and now consumers have to navigate through the minefield of how increases are described. Consumers are faced with some challenging decisions this year.”

To provide you with some assistance in comparing benefit options for your clients, we’ve put together three tables. We asked schemes to recommend one of their benefit options for three case studies that we pitched to them. Unfortunately not all of the schemes were willing to take part in the comparison and while the information included in these tables is by no means exhaustive, it provides a very basic outline of some of the various offerings.

A healthy, 25-year-old female. No chronic conditions.

Plan Cost per month Day-to-day benefits

18

Bonitas

Fedhealth

Momentum

TopMed

Medihelp

Primary option

Maxima Core

Custom option

Hospital option

Dimension Prime 1

R1 274

From R1 258

GP benefit: R1 400 limit per member, per annum for GP visits in the Bonitas GP network. This is limited to R470 for a non-network GP. Basic dentistry and optometry benefits paid from risk. Other: R1 500 limit per annum, which covers acute medication, out-ofhospital radiology, pathology, paramedical services, specialist consultations and others.

PMB level of care at GP network partners and designated pharmacies only.

R1 152

Benefits are subject to HealthSaver (similar to a medical savings account), if available.

R910

R1 026 (*R930 on network option)

Hospital plan only.

No benefits for dayto-day treatment.

Overall limit of R1 120. R780 sub-limit on GPs, specialists and physiotherapy. R670 sub-limit on acute medicine and selfmedication.

In-hospital benefits

Specialist visits

Chronic benefit

Added benefits

(*these lists are not exhaustive and have been selected based on their relevance to the given case study)

Benefits payable at 100% of Bonitas rate, subject to overall annual limit of R1 million. Any hospital may be used, subject to pre-authorisation.

Unlimited hospital cover at any hospital, with co-payments for selected procedures.

In-hospital specialist treatment covered in full, provided that one of Fedhealth’s specialist partners is used. Specialised radiology, such as MRI and CT scans, is covered from the in-hospital benefit, whether the procedure is performed in hospital or not. Selected procedures performed in a doctor’s rooms are covered from this benefit.

Unlimited private hospitalisation at any hospital; discount available if network hospital used. 53 procedures covered, R1 000 authorisation cost, except in emergencies.

Additional copayment applicable for 17 procedures.

Unlimited hospitalisation, subject to preauthorisation. Paid at 100% of the agreed tariff.

Unlimited hospitalisation at 100% of the scheme tariff.

Co-payments may apply on specified procedures. Diagnosis, treatment and care of 270 disease treatment pairs (DTP) and 26 chronic conditions on the chronic diseases list (CDL). Subject to PMB protocols, pre-authorisation and DSP, where applicable.

Unlimited benefits at 100% of the scheme tariff for major trauma that necessitates hospitalisation in the case of motor vehicle accidents and burns, among others.

Admission to nonnetwork hospitals will be subject to a 30% co-payment.

In-hospital specialist benefits are subject to the overall annual limit of R1 million and paid at 100% of Bonitas rate.

Out-of-hospital specialist benefits are subject to day-to-day benefit limits, after which PMBs only are paid. If the Bonitas specialist network is used, no copayments will apply both in and out of hospital, subject to available benefits.

PMB level of care at specialist network partners only.

Associated specialists covered in full, other specialists covered in hospital at 100% of Momentum Health Rate (MHR).

In-hospital specialist fees covered at 150% of Topmed tariff.

PMBs at 100% of cost and non-PMBs subject to day-to-day benefits.

26 PMBs only; formulary restricted to avoid copayments.

PMBs only; formulary restricted to avoid copayments, use of DSPs (MEDI-Rite pharmacies), medication covered at MPL rates.

PMBs only; lower contribution if associated chronic providers used, e.g.

Atlas or Medipost pharmacies.

Hospital plan only, no benefits provided for dayto-day treatment.

However, member can apply for cover of PMB conditions.

Diagnosis, treatment and care of 26 chronic conditions listed on the CDL. Non-CDL conditions subject to day-to-day benefits.

One gynaecologist visit per annum without referral.

Maternity care covering six antenatal consultations, 2 x 2-D scans and four post-natal consultations with midwife.

New screening benefit effective from 1 January 2013; includes cervical cancer screening and one GP consultation with a Fedhealth network GP.

Up to R1 800 per adult per year in HealthReturns awarded to members who go for an annual health assessment (free), comply with treatment protocols (where applicable) and are active. This can be increased to R3 600 for members on Multiply and to R5 400 if paid into HealthSaver account.

Wellness benefit allows for preventative screening tests, such as annual BMI, blood sugar and cholesterol tests, as well as pap smears.

12 pregnancy consultations and 2 x 2D sonars.

Mammogram, cholesterol and blood sugar testing. Annual flu, tetanus and HPV vaccination. Pap smear and HIV rapid test.



19

A 50-year-old male with a family of six, including a wife and four children, aged 17, 15, 12 and eight. The father suffers from hypertension and the 12-year-old suffers from sinusitis.

Plan Cost per month

Day-to-day benefits

Chronic benefit

Specialist visits

20

Bonitas

Fedhealth

Standard option

Maxima Standard

Momentum TopMed Extender option

Savings option

Medihelp Dimension Prime 3

(or Dimension Prime 3 Network)

R5 411 (free cover for fourth child)

R6 270

R9 403 (*can be reduced to as low as R7 769 if associated hospitals, GPs and pharmacies are used.)

R3 686 (max. of 3 children charged for)

R4 236 (max. of 2 children charged for. *Can be reduced to R3 852 on network option.)

GP benefit: R5 600 per family per annum for GP visits in Bonitas GP network. R1 870 limit for non-network GPs. Basic and advanced dentistry, and optometry benefits paid from risk. Other: R6 200 limit per family per annum, which covers acute medication, out-ofhospital radiology, pathology, paramedical services, specialist consultations and others.

Unlimited GP consultations at one of Fedhealth’s network partners.

Annual limit of R13 898.

Unlimited GP consultations at one of Momentum’s network partners.

Annual threshold of R29 300.

No benefit, but payable from savings at 100% of cost.

R9 210 per family per annum for GPs, specialists, psychologists, physiotherapy, supplementary health services and acute medicine and selfmedication.

R7 000 per beneficiary and R14 000 per family per annum for comprehensive formulary at any pharmacy or dispensing GP, covering 42 chronic conditions.

39 chronic conditions covered, including anorexia, bulimia and depression.

Overall annual limit: R8 630. Unlimited HIV/Aids treatment.

Restrictive formulary and DSPs used once out-of-benefit (chronic disease limit is exhausted).

Cover for PMBs, as well as 36 additional chronic conditions at an annual limit of R7 000.

100% cover for PMBs at TopMed DSP and subject to TopMed’s formulary.

Diagnosis, treatment and care of 26 chronic conditions listed on the CDL at 100% of PMB. Non-PMBs subject to day-to-day benefits.

In-hospital specialist benefits are unlimited and paid at 100% of Bonitas rate. Out-of-hospital specialist benefits are subject to day-to-day benefit limits, after which PMBs only are paid. If the Bonitas specialist network is used, no co-payments will apply both in and out of hospital, subject to available benefits.

Paid from day-today benefits with accumulation to Safety Net at cost.

Unlimited at cost once Safety Net is reached.

Associated specialists covered in full. Other specialists covered up to 200% of MHR. Treatment must be authorised.

In-hospital specialist fees covered at 100% of TopMed tariff.

PMBs at 100% of cost and non-PMBs subject to day-to-day benefits.

In-hospital benefits

Added benefits

Unlimited hospital cover at 100% of Bonitas rate. Any hospital may be used, subject to pre-authorisation.

Unlimited hospital cover at any hospital, with co-payments for selected procedures.

In-hospital specialist treatment covered in full, provided that one of Fedhealth’s specialist partners is used. Specialised radiology, such as MRI and CT scans, are covered from the in-hospital benefit, whether the procedure is performed in hospital or not.

Selected procedures performed in a doctor’s rooms are covered from this benefit. (*Member can pay R5 698 a month on Maxima StandardNet, but will be limited to network hospitals.)

Unlimited private hospitalisation at any hospital; lower contribution if network hospital used. 53 specialised procedures covered that do not necessarily require admission to hospital. Additional co-payment applicable for 17 referral procedures.

Treatment must be authorised.

Unlimited hospitalisation, subject to preauthorisation, paid at 100% of the agreed tariff.

Unlimited hospitalisation at 100% of the scheme tariff. Co-payments may apply on specified procedures and non-network admissions. Diagnosis, treatment and care of 270 DTPs and 26 chronic conditions on the CDL. Subject to PMB protocols, pre-authorisation and DSPs, where applicable. Unlimited benefits at 100% of the cost for major trauma that necessitates hospitalisation in the case of motor vehicle accidents and burns, among others.

Admission to nonnetwork hospitals for non-emergencies will be subject to a 30% co-payment, if on Dimension Prime 3 Network option.

Childhood illness benefit paid from risk, including two GP consultations per beneficiary per annum between the ages of two and 12 years.

New screening benefit effective from 1 January 2013; includes mammograms, cervical cancer, flu vaccination and cholesterol screening. Female contraceptives covered from risk.

Up to R1 800 per adult per year in HealthReturns awarded to members who go for an annual health assessment (free), comply with treatment protocols (where applicable) and are active. This can be increased to R3 600 for members on Multiply and to R5 400 if paid into HealthSaver account.

Wellness benefit allows for preventative screening tests.

Conservative dentistry benefit payable from risk at 75% of the TopMed tariff.

12 pregnancy consultations and 2 x 2D sonars.

Mammogram, cholesterol and blood sugar testing. Annual flu, tetanus and HPV vaccination. Pap smear, prostate test, HIV rapid test and bone mineral density tests.

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A 30-year-old male with high blood pressure and diabetes. Married, but with no children.

1.

Plan

Cost per month

Day-to-day benefits

In-hospital benefits

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Bonitas

Fedhealth

Momentum

TopMed

Standard option

Maxima Basis

Incentive option

Hospital or Savings option

Medihelp Dimension Prime 3

(or Dimension Prime 3 Network)

R3 680

R3 088

R3 328 (*can be reduced to R2 791 on Incentive Associated option, provided associated hospitals, GPs and pharmacies are used)

H: R1 595 S: R2 393

R3 216 (*R2 928 on network option)

GP benefit: R4 500 per couple per annum for GP visits in Bonitas GP network.

R1 500 limit for non-network GPs. Basic and advanced dentistry and optometry benefits paid from risk. Other: R5 000 limit per couple per annum, which covers acute medication, out-ofhospital radiology, pathology, paramedical services, specialist consultations and others.

Annual limit of R4 550. Unlimited GP consultations at one of Fedhealth’s network partners.

Any provider can be used with 10% of total contributions allocated towards a medical savings account.

Benefits are subject to savings and additional HealthSaver (similar to a medical savings account), if available.

Day-to-day benefits covered on Savings option only, through the medical savings account.

R6 850 per family per annum for GPs, specialists, psychologists, physiotherapy, supplementary health services and acute medicine and selfmedication.

Unlimited hospital cover at 100% of Bonitas rate. Any hospital may be used, subject to pre-authorisation.

Unlimited hospital cover at any hospital, with co-payments for selected procedures.

In-hospital specialist treatment covered in full, provided that one of Fedhealth’s specialist partners is used. Specialised radiology, such as MRI and CT scans, is covered from the in-hospital benefit, whether the procedure is performed in hospital or not.

Selected procedures performed in a doctor’s rooms are covered from this benefit.

Unlimited private hospitalisation at any hospital; lower contribution if associated hospital is used. 53 specialised procedures covered that do not necessarily require admission to hospital.

Additional co-payment applicable for 17 referral procedures. Treatment must be authorised.

Unlimited hospitalisation on both options, subject to pre-authorisation, paid at 100% of the agreed tariff.

Unlimited hospitalisation at 100% of the scheme tariff. Co-payments may apply on specified procedures. Diagnosis, treatment and care of 270 DTPs and 26 chronic conditions on the CDL. Subject to PMB protocols, pre-authorisation and DSP, where applicable.

Unlimited benefits at 100% of the cost for major trauma that necessitates hospitalisation in the case of motor vehicle accidents and burns, among others. Admission to non-network hospitals for non-emergencies will be subject to a 30% copayment if on Dimension Prime 3 Network option.

Specialist visits

Chronic benefit

Added benefits

In-hospital specialist benefits are unlimited and paid at 100% of Bonitas rate.

Out-of-hospital specialist benefits are subject to day-to-day benefit limits, after which PMBs only are paid. If the Bonitas specialist network is used, no copayments will apply both in and out of hospital, subject to available benefits.

Paid from day-today benefits with accumulation to Safety Net at cost.

Unlimited at cost once Safety Net is reached.

Associated specialists covered in full. Other specialists covered up to 200% of MHR.

In-hospital specialist fees covered at 150% (Hospital option) and 100% (Savings option) of TopMed tariff.

PMBs at 100% of cost and non-PMBs subject to day-to-day benefits.

R7 000 per beneficiary and 14 000 per family per annum for comprehensive formulary at any pharmacy or dispensing GP, covering 42 chronic conditions.

PMBs only, includes diabetes and highblood pressure; formulary restricted to avoid co-payments; use of DSPs (MEDIRite pharmacies); medication covered at MPL rates.

Cover for PMBs, including high blood pressure, as well as six additional chronic conditions at an annual limit of R7 000 per family.

100% cover for PMBs at TopMed’s DSP and subject to TopMed’s formulary.

Diagnosis, treatment and care of 26 chronic conditions listed on the CDL, at 100% of PMB. Non-PMBs subject to day-to-day benefits.

Access to the Centre for Diabetes and Endocrinology for the treatment of diabetes.

Maternity care, including unlimited hospitalisation, 12 ante-natal consultations, 2 x 2-D scans and four post-natal consultations with midwife. R900 for ante-natal classes.

New screening benefit effective from 1 January 2013; includes mammograms, cervical cancer, flu vaccination and cholesterol screening. Female contraceptives covered from risk.

Up to R1 800 per adult per year in HealthReturns awarded to members who go for an annual health assessment (free), comply with treatment protocols (where applicable) and are active. This can be increased to R3 600 for members on Multiply and to R5 400 if paid into HealthSaver account.

Wellness benefit on both options includes preventative screening tests. Both options provide a maternity programme, which includes 12 ante natal classes and consultations, prenatal vitamins, two scans and helpful information and guidance through pregnancy

12 pregnancy consultations and 2 x 2D sonars.

Mammogram, cholesterol and blood sugar testing. Annual flu, tetanus and HPV vaccination. Pap smear, prostate test, HIV rapid test and bone mineral density tests.

Spoilt for choice Choosing a benefit option is daunting. Clayton Samsodien, managing director of Genesis Healthcare Consultants, recommends taking into account the following considerations: 1. Review the health status and needs of your client and their family, deciding on the level of hospital and chronic cover based on these needs and hereditary diseases, such as cancer in the family.

2. Analyse the cost of chronic cover versus the cost of the plan type that provides the benefit. It may not make sense to upgrade if the medicines are cheaper than the increased cost of the upgraded option.

3. Check the chronic formulary list versus the medication prescribed. If medicines cannot be changed to that on the formulary list, calculate the total healthcare cost, including the copayment for chronic medication and the monthly medical scheme contribution.

4. Evaluate treatment protocols from schemes. For example, some schemes do not provide cover for members with borderline high cholesterol.

5. Calculate the need for day-to-day benefits and quantify the benefits the scheme will pay from risk in respect of day-to-day benefits, such as GP and specialist networks. As a guideline, it is said that a person will visit a doctor four times a year on average. It may not be in the interest of your client to upgrade for more day-to-day benefits, as the cost of the upgrade may not justify the increase in benefits.

6. The cost of screening and preventative benefits should be included in the overall calculation.

7. Shop around. “You will be amazed at the unique benefits offered by schemes. For example, some schemes have fantastic dentistry benefits, while others have impressive maternity benefits,” says Samsodien.

“Importantly, evaluate the healthcare offering from schemes,” he continues. “Loyalty, rewards and lifestyle benefits are non-healthcare. While they have a positive impact on health outcomes, they should not form the core basis of the decision-making process.”

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How medical break-throughs are impacting SA’s medical industry.

It’s a

breakthrough!

Bianca Wright

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T

hey say the only constant is change and nowhere is that perhaps more true than in the field of medicine.

As new scientific discoveries and changes in conventional thought about illness and injury take place every day, those in the industry must constantly adapt to new ways of doing and viewing the medical sphere.

In many areas of medicine what was once thought of as science fiction has become science fact. Helen Weber, senior manager for clinical policy at Metropolitan Health Risk Management, explains that technological advancements have been made in areas such as screening and diagnostics with GeneXpert, a molecular test assisting with the rapid diagnosing of tuberculosis and more specific drug resistant tuberculosis.

According to the South African National Tuberculosis Association (SANTA), someone in the world becomes infected with TB every 36 seconds and nearly one per cent of the world’s population becomes infected with TB each year.

Overall, one-third of the world’s population is currently infected with the TB germ. SANTA notes that TB is also the leading cause of death among people who are HIV-positive.

Approximately one-third of all HIV-related deaths worldwide are caused by TB. In a country where tuberculosis is still one of the biggest killers and infection rates are high, prompt and accurate screening and diagnosis is vital.

Weighty issues

The possibilities are endless

In the treatment through medication area of medicine, the introduction of incretins as a new therapy treatment for Type 2 diabetes by companies such as Novo Nordisk, a Danish pharmaceutical company with a local arm, is set to revolutionise diabetes care and put a highly effective weapon against disease progression in the hands of the practitioner.

While some medical breakthroughs are available here and now, others are on the cusp of realisation. For example, Genius Biotherapeutics CEO, Ismet Amod, explained to Engineering News in June that the company is researching the use of dendritic cell cancer vaccines which may offer a viable alternative through the use of the patient’s own immune cells, which would have been primed to target specific cancers.

Patients who use this medicine early may hope for the benefit of having an active ingredient that slows down the progress of diabetes.

The availability of this as a treatment option, which holds out the hope of a stable and healthy blood sugar level and little or no hypoglycaemia combined with the probability of weight loss, have many Type 2 diabetes patients rejoicing.

Local doctors have reported some patients shedding in excess of 30 kilograms in six months since receiving the treatment.

What is significant about this treatment is that it slows down the progression of diabetes, while encouraging weight loss, which is something that many diabetics have struggled with.

Another area of technology would be key-hole hip replacement surgery. This has reduced the pain levels and provided better stability, quicker mobilisation and better aesthetic results for patients.

The heart of the matter

Biting off opportunities

In the area of procedures, there has been the emergence of minimally invasive procedures such as drug eluting stents and drug eluting balloons for the treatment of coronary artery disease.

In South Africa, and in Africa as a whole, diseases carried by insects pose a significant threat. Diseases such as malaria, dengue fever and West Nile fever, which infect 700 million people annually and have the highest mortality rates in Africa, could well be on the brink of obsolescence, according to an article in the Mail and Guardian.

A huge advance in technology on the cardiac arena has been the implantable cardioverter-defibrillators and biventricular pacemakers. This has had a massive impact in the treatment of cardiac arrhythmias and patients with severe heart failure.

Access to Trancatheter Aortic Valve Implant (TAVI) has provided patients with previously untreatable condition access to treatment and substantial increase in quality of life. “This procedure has enabled the replacement of a heart valve, which previously was a major surgical procedure (performed as an open procedure) to be performed through a catheter with small incision in the artery in the groin,” she says.

The piece went on to say that scientists have discovered ways of modifying the genetic composition of mosquitoes to render them sterile. “As part of a comprehensive study in 2010, three million of these infertile mosquitoes were released in the Caymans to mate with wild female mosquitoes.

The results were extremely positive: a decrease of 80 per cent in the mosquito population,” it said. Pushing this concept further, scientists are now working on modifying the genes in a way that will prevent the insect from carrying the malaria pathogen, the parasite called plasmodium.

Genius Biotherapeutics is also involved in other biotechnology research including the production of Repotin ampoules which contain the active ingredient recombinant human erythropoietin (r-HuEPO), a hormone produced by the kidneys, and the development of granulocyte colony-stimulating factor used in the treatment of neutropaenia, a granulocyte disorder in cancer patients undergoing chemotherapy.

Significant breakthroughs in the area of biotechnology, specifically in terms of cancer treatment, would change the way the medical fraternity approaches cancer. The treatments are not there yet, but soon could be.

New challenges “New technologies have afforded the medical fraternity the ability to diagnose diseases earlier and offered safe and effective treatment modalities to patients who might not have previously been considered for treatment as earlier indicated. This has led to improved quality of life,” Weber says.

While these new options across a range of areas are good news for patients, they can also cause concerns among medical aids and insurers. “The medical device market is not very well regulated in South Africa,” says Weber.

“Managed care organisations are applying a scientific and evidence-based methodology to evaluate health technology. For example, by utilising figures such as numbers needed to treat (NNT), which determines the costeffectiveness of technology, quality adjusted life years (QALY) and disability adjusted life years.”

She explains that this has improved the ability to advise funders on the value of technology, which assists with controlling of the influx and acceptance of new technology. Weber adds that, to control the inappropriate use of technologies, reimbursement policies are formulated.

Insurers and medical schemes need to keep abreast of developments in medicine that could impact on their members and policyholders and thus ensure that they are positioned to provide access to the kinds of life-saving and life-changing medical innovations that are only now possible.

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Get well soon

Grant Cyster

an international healthcare focus

Down under

Uncle Sam

Queen and country

Australia provides its citizens with universal healthcare coverage via Medicare, a public insurance initiative that is funded by tax Dollars.

Medicare covers most medical care needs as well as prescription medication. Besides Medicare, there is a separate pharmaceutical benefits scheme that significantly subsidises a variety of prescription medications. The majority of health services are funded and monitored by the Australian Government, although the country's states and territories are responsible for public hospital care.

In the United States, healthcare is made available by numerous distinct organisations, and healthcare infrastructure and facilities are largely owned and run by the private sector. At present, health insurance for those working in the public sector is provided by the federal government for the most part. Just less than two-thirds of healthcare spending and provision originates from programmes such as Medicare, Medicaid and TRICARE (a healthcare programme for uniformed service members like military personnel). Most Americans under the age of 65 are insured by their own or a family member's employer. Others opt to buy health insurance themselves, while the remainder of Americans are uninsured against health risks. According to the United States Census Bureau, over 16 per cent of the United States’ population (around 50 million people) was uninsured in 2010. Based on figures released by the World Health Organisation in 2008, the USA spent more on healthcare per capita and more on healthcare expressed as a percentage of its GDP than any other country in the world.

In the land of tea and crumpets, healthcare is a devolved matter. What is meant by this is that England, Northern Ireland, Wales and Scotland each run their own private and publicly funded healthcare platforms.

In addition to Medicare, approximately 50 per cent of the population receives further coverage in the form of private insurance, subsidised by the government, which caters to things such as dental care and private hospital care. The majority of Australia's doctors work in the private sector and are remunerated on a fee-for-service basis, with GPs acting as gatekeepers to more specialised forms of medical care. In the public sector, doctors earn a salary with the potential of additional income derived from treating private patients.

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Despite differences in policies and protocols between these countries, they all provide public healthcare that is free of charge at the point of need to all permanent residents of the United Kingdom. Costs are covered by general taxation.

Beyond these respective public healthcare systems, each country also has a private healthcare sector that is significantly smaller than its public counterpart, and accessed through private healthcare insurance, as part of an employment-based medical aid scheme or paid for directly by the customer.

There are a few things in this world that we can count on with absolute certainty. Among them is the undeniable fact that at some point or another, our bodies or minds will suffer illness or injury. Given this inevitability, the need for healthcare arises in South Africa as it does in every country in the world. We take a look at how the logistics of the South African healthcare system measure up against that of Australia, the UK and the USA.

The rainbow nation Healthcare in South Africa is a varied business. It ranges from the most elementary primary healthcare provided free of charge by the government, to state-of-the-art hitech healthcare facilities and services made available in both the private and public sectors.

Although the State covers about 40 per cent of all healthcare expenses, public healthcare services face the tall order of meeting the relevant needs of approximately 80 per cent of the people in South Africa.

Alternatively, the private sector operates largely on a commercial basis and focuses on meeting the requirements of middle- and highincome earners who are primarily members of various medical aid programmes. The private sector also tends to attract the majority of the country's healthcare practitioners. Medical institutions in the public sector deal with constant challenges in the form of ineffective management, lack of resources and funding, and a deteriorating infrastructure. These challenges are exacerbated by significant public health problems like diseases such as HIV and

tuberculosis, and a lack of suitably qualified healthcare professionals.

Speaking to News24 at the beginning of September 2012, the South African Health Minister, Aaron Motsoaledi, said that South Africa spends more on healthcare than many other countries in the world, but in spite of this fact, the quality of patient care in this country is deteriorating. “In South Africa, we still think little of primary healthcare. While medical aid premiums are increasing, patient care is declining.

“Health is a public good and not just any other commodity. I don’t know any minister of health in the world who is not worried about the affordability of healthcare,” says Motsoaledi.

Addressing South Africa's healthcare challenges, the South African Government has outlined a plan to re-energise and reorganise its healthcare system. The objectives of this initiative include: • Bolstering the fight against TC and HIV

(along with other non-communicable diseases), and injury and violence as well.

• Sending out health teams to communities and schools.

• Regulating healthcare expenses to make care more affordable to everyone.

• Enhancing human-resource management at public hospitals and facilitating greater co-operation between the State and private healthcare sectors.

• Aggressively pursuing the implementation of a national health insurance scheme which is aimed at eventually providing healthcare for all South Africans.

Many countries are finding it difficult to meet the increasing demand for quality healthcare services – a demand that shows no sign of abating any time soon. While the challenges in this area often seem insurmountable, and South Africa is no exception, our hats go off to the selfless healthcare professionals around the country who work day and night to improve the quality of life of all South Africans.

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shortterm c o rp o ra t e

|

p e rs o n a l l i n e s

|

c o mm e r c ia l

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news

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Taking part in extreme sports activities while on holiday may require special travel insurance.

Brokers need to ensure that clients are not left up the creek without a paddle.

Film sets present a myriad unusual and unforeseen risks. We take a look at examples of what can go wrong on set and what types of insurance cover can mitigate financial losses.

Travel insurance for sports nuts

Lights, camera, insurance

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Travel insurance for sports nuts Nick Krige

Participating in sports activities often requires very expensive equipment and increases the risk of an injury. Brokers should advise their clients to keep that in mind when they are outlining what should be covered on their travel and household insurance policies.

Sports travel insurance “Specified travel insurance policies are frequently requested and allow individuals who want to partake in activities while on holiday to do so and remain covered,� says Ross Waterford, consumer lines manager at ACE Insurance Limited. This could range from extreme sports, such as bungee jumping or snowboarding, to more standard activities, such as golf or windsurfing.

One of the biggest mistakes clients make is assuming that they are automatically covered

30

for any activity they wish to partake in while on their travels through their general health insurance. Unfortunately this is not the case, and specific travel insurance policies are needed to make sure the client is covered against an accident. There is nothing worse for a client on holiday than waking up in a hospital bed only to discover that they are expected to pay for the treatment themselves.

Brokers should go through any general insurance policies with their clients before they book a holiday to find out exactly how much cover they have, and what extra insurance they need to consider. Even if a general insurance policy claims to cover activities, it is important to go through the fine print with your client.

For instance, if the policy covers skiing, will the client still be covered for skiing off piste (not on a marked path); or if it covers scuba diving, is there a stipulation on how deep the client can dive?

Certain clients may make the mistake of assuming that their particular activity is not considered dangerous, especially if they have been doing it for a long time. Unfortunately, it is likely that an insurance provider will see any activity as an increased risk, which could lead to issues if the client needs to make a claim and has not taken additional sports travel insurance.

The advantages The most important aspect of any travel insurance policy is the medical cover. This becomes even more essential when the client is taking part in an activity. “Policyholders will be covered for emergency medical procedures and repatriation costs incurred as a result of injury suffered while on an insured trip,” says Waterford. Brokers should highlight to their clients that partaking in any activity, even one that is not particularly dangerous, will increase the risk of an accident occurring.

The cost of a travel insurance policy will reflect the risk factor of the holiday.

“Travel insurance policies are taken out on a trip-by-trip basis. For a beach holiday in Mauritius, no additional cover will be needed, but if the client is going snowboarding in Austria they will need to inform their broker, so the policy can be loaded to include cover for that activity,” explains Waterford.

travel insurance policies, but if a client is going to be involved in a high-risk activity they need to specify this intention upfront so it can be loaded onto the policy. Otherwise they will not be covered,” explains Waterford.

Always check every activity that the client will be partaking in, as some unexpected activities may be considered high-risk by the insurance company, like ballet, gymnastics or skateboarding.

One last detail to keep an eye out for when going over a policy with a client is that, even if cover is provided for a particular activity, the excess charged for claims related to that activity could be huge, especially if the activity is considered particularly dangerous. 

A good broker will have a clear understanding of exactly what a client needs for a specific holiday and make sure that they are covered for any activities they will be involved in. Because travel insurance is taken on a trip-by-trip basis, it is vital that the information in the policy is as accurate as possible, as a claim will be turned down if the rules have been breached. Any activities that the client will be taking part in while on their trip must be included in the policy documents and, if the activity is broken up into different risk levels, the broker must make sure that the client is covered for the correct amount of risk.

Most sports and activities, such as golf, body boarding, water-skiing and jet skiing, are covered by travel insurance policies; but high-risk activities, such as snowboarding and skiing off piste, need to be specified to make sure that the client is covered. “There are certain sports that are included on our

31

How to insure sports equipment It is important to note that sporting equipment can often be specified on the client’s household insurance policy, in the same way as expensive luxury items like cameras and jewellery can be covered. Any claim would subsequently affect the household insurance policy, but it may be the best way for the client to avoid expensive losses and brokers should explore that avenue.

According to Allianz Insurance, smaller sport equipment items, such as tennis rackets, can be covered under the personal possessions insurance option. More static items such as rowing machines, table tennis tables and exercise bikes, will form part of the client’s contents cover, as they are more like pieces of furniture in the home.

Insuring sports equipment What can go wrong Two experienced divers travelled to Mauritius for a special diving holiday and, when they landed at Sir Seewoosagur Ramgoolam International Airport, the bags containing most of their equipment were nowhere to be found. They had no travel insurance and the airline was not very helpful about their lost luggage. This effectively ended their trip, as they were unable to afford the high cost of renting the equipment to continue their holiday. “It was dreadful, the airline refused to admit that the luggage was lost and told us that it would be returned in due course,” one of the divers, explains. In the end the luggage did make its way back to the couple, the day before they were due to return to South Africa. their holiday was ruined.

However, there are pieces of sports equipment that can be extremely valuable – a set of golf clubs can easily cost R10 000 – and clients need to specify these more valuable items individually on their insurance policies, as well as how often they are used or taken out of the home, so the insurance company can be aware of the items and work them into the cost of the premium.

While your clients’ sports equipment may be covered by normal household insurance, it may not be insured while they are using it or while the equipment is not on the property. So if their golf clubs are stolen from the house, they will be paid out, but if they are stolen or broken while the client is playing a round of golf, there will be no cover unless it has been individually specified on their insurance policy.

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Travelling with sport equipment Clients might be inclined to take their sports equipment with them when they go on holiday, or take a trip specifically for the purpose of engaging in a sporting activity. Travel insurance can provide cover for the equipment while it is in transit, but it may be insufficient to cover more expensive items like a racing bicycle or scuba gear. Sports equipment individually declared on insurance policies has greater cover. “Typically, our travel insurance policy is limited to 25 per cent of the total cover per item for articles that are lost, stolen or damaged,” says Waterford.

Clients should be advised of the following dangers of travelling with sports equipment: • Sports equipment is often an irregular shape, especially when packed in a specialised bag.

This increases the risk of accidental damage while it is being moved or stowed, especially on aeroplanes.

• While on holiday, clients tend to be less vigilant and pay less attention to how secure items are. Local thieves will look to take advantage of unsuspecting visitors.

• Strapping equipment to cars and roof racks can cause damage to items if not done with care. The items are also likely to protrude from the car, so be aware of other vehicles on the road and obstructions when parking.

It is important for brokers to go through any and all insurance policies with their clients that may cover sports equipment to make sure that they are not over-insured and to avoid overlaps in cover.

When travelling by aeroplane, sports equipment nearly always needs to be checked-in to oversized baggage because of the weird and wonderful shapes and sizes of the equipment. Brokers should make their clients aware that airlines often provide limited coverage for lost, damaged or delayed baggage, but they also have very defined limits on their liability for separately checked bags. Clients should be encouraged to research exactly what is covered by the airline they are travelling with so they can be fully aware of any extra cover they may need.

When a claim is covered by the airline, it will take its time paying out for various reasons. If a bag is deemed lost, it will determine whether this is in fact the case, or whether the bag has just been misplaced. If there is damage to luggage, the airline will investigate whether it was its fault or not.

Then it will define the value of the items that have been lost or damaged, and unless the client has purchase receipts for everything in

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the baggage, they are likely to spend some time negotiating with the airline as to the true value of the items. “Airline coverage for lost equipment is extremely limited and varies from carrier to carrier. It can also take days or weeks before an airline will admit a bag is irretrievably lost,” says Damian Tysdale from Travel Insurance Review.

As evidenced by the earlier diving story, even if the equipment is just delayed it can seriously affect the client’s plans as the cost of renting equipment can be discouragingly expensive. clients must make sure exactly what is covered in their travel or household insurance policy as often as they go on holiday. They must review the value of their sports equipment regularly, as their cover needs are likely to change over time. For example, a client may have stopped scuba diving and sold all their equipment. If the equipment was specified on an insurance policy, they would want it removed as they would be paying for cover of equipment they no longer have. In another case, a client may have replaced their old golf clubs with a set of top-of-the-range equipment and will want cover to reflect that investment.

"Clients must review the value of their sports equipment regularly, as their cover needs are likely to change over time."

The bonus of a specialised travel cover is that the client can customise it in the same way as a normal policy, meaning they can get all of the benefits of the normal policy with additional cover for the activities included.

Many providers offer different premiums for different activities, so that additional premiums for cycling will not be as high as for abseiling.

For clients who find the cover a bit expensive, consider removing baggage or cancellation, or even advise medical expenses only, especially if they have some form of travel cover through their general insurance policy.

Imagine insuring this guy Austrian daredevil Felix Baumgartner became the first man to break the sound barrier when he jumped out of a capsule more than 39 kilometres above the Earth’s surface last month. The record-breaking free-fall jump saw the Austrian lifted to the edge of space by a specially designed balloon. The 43-year-old reached speeds of more than 1 300 km/h before deploying his parachute and floating down to the ground.

“I think 20 tons have fallen from my shoulders. I prepared for this for seven years,” Baumgartner told German-language ServusTV in Austria, in his first interview after the leap.

Lights, camera,

insurance Nick Krige

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F

We look at examples of what could go wrong on a film set and what insurance cover directors and film producers should have in place.

Insurance is there to cover your clients against unexpected costs which may be incurred in the process of making a film.

Costs can range from simple things such as accidental damage to equipment, through to claims resulting from members of the public who are injured on set, or even provision of the necessary funds to complete the film if it goes significantly over budget.

From big budget films to student shoots, insurance is needed to ensure production can be completed.

A client of Film and Entertainment Underwriters South Africa, who was responsible for an underwater shoot, commissioned a technician to build special underwater camera housings to accommodate cameras that were being used in a unique sequence. Unfortunately, the camera housing leaked during the shoot and shooting had to be halted for repairs to the housing and camera. This resulted in lost shooting time and the need to organise all the equipment, staff, locations and funds for a reshoot.

In another case during a film shoot in Cape Town, the cameraman had to move a camera from one camera mount to another.

In the process, the lens was inadvertently loosened; this resulted in the subsequent footage coming out blurry and unusable.

Again, this meant an expensive reshoot.

The types and degrees of insurance that are available for a film production is largely dependent on the budget, but the following types of insurance are the most common found in the film industry.

General public liability Cover is important if the production is being filmed in a highly populated area, as it protects against claims made by a member of the public who is injured on your client’s set or filming location. It also provides cover for damage to property suffered as a result of filming. This insurance is typically taken out regardless of the production’s budget.

“In most major centres around South Africa, a production will not be allowed to begin shooting without proof of some form of general liability cover,” explains Clive Shelver, managing director of Film and Entertainment Underwriters South Africa. 

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“If, for example, a manhole cover is removed so the cameraman can get a special shot from below the street, and a member of the public falls down that hole after filming has ended, there needs to be cover in place.”

and fell out of the sky, bringing the camera down in pieces. Unfortunately, there are many scenarios where camera trucks are stolen or hijacked as well.”

Equipment

In countries outside of South Africa, employer’s liability insurance is a legal requirement regardless of the industry, especially when more than a certain number of people are on the pay role. Therefore, when overseas production companies come to South Africa to shoot, they insist that this cover is in place. “It provides cover for damages and claims made by an employee who is injured or killed during the course of filming, but in South Africa this is covered already by the Compensation for Occupational Injuries and Diseases Act,” says Shelver.

This type of cover is especially important if the client is using rented equipment. Many rental shops will not allow the equipment out of their sight unless proof can be shown of cover against loss or damage to the equipment. If the client is using their own equipment it is not imperative to have this cover in place, but it is still highly advisable.

“All equipment used on set should be insured for the replacement value of such items.

A further extension to this will be loss of income suffered by the rental house while its equipment is being replaced,” explains Denise Hattingh, owner and key individual of KEU Underwriting Managers. “On a recent production, an Octocopter (small remote control camera) caught some wind

Employer’s liability

Props and sets As with equipment, it is incredibly unlikely that prop houses will supply the client with props unless adequate cover is in place against loss and damage. Often locations 

11

This is KEU’s 11th year of stellar performance in delivering tailor-made insurance solutions to the film, television, events and entertainment industries. Since the opening act, KEU has struck the right balance between good partners, a solid track record and the flexibility needed in the entertainment industry. We’d like to thank our entire team – the star performers at the frontline, the technical team behind the scenes and of course, our partners – for helping us to tell a new story in insurance solutions for the entertainment industry.

Here’s to the next exciting episode in KEU’s story!

Film Producers’ Indemnity

Event Liability

Event Cancellation Contact Denise Hattingh 0861 00 0090 email: denise@keu.co.za www.keu.co.za

Prize Indemnity

Equipment All Risk

KEU Underwriting Managers CC underwritten by Centriq Insurance Company (RF) Ltd, will partner only with registered short-term brokers to ensure your risk is covered.

KEU is a member of SAUMA.

Authorised FSP: KEU 5076 Authorised FSP: CENTRIQ 3417

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1449-05

47190/MortimerHarvey/E/R

Most people would rather daydream than think about insurance. The good thing is, they can rely on you, their broker, to make insurance feel more like common sense and less like rocket science. www.hollard.co.za – for clued-up insurance solutions through over 100 partnerships.

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insurance for the animal should include cover for the handler as well,” explains Hattingh.

Errors and omissions If your client intends for the production to be picked up by a commercial distributor, they will need this cover. It protects the completed production against litigation relating to infringement of intellectual property rights, defamation and privacy laws.

It is important to note that this type of cover can take some time to acquire, as the insurance company will probably require an investigation to ensure that all necessary steps have been taken to avoid errors and omissions.

Completion bond will require the client to take out building and contents insurance as well, to protect them against damage to their property caused by the production. “One of the more interesting claims we had was a scene that was shot with a number of ladies dancing in high heels, not realising that the floor they were dancing on was made of soft stainless steel and every time you put your heel down a nice indentation was made. Needless to say, the floor had to be replaced,” laments Hattingh.

Film negatives Once a production has finished shooting, the most valuable resource becomes the film negatives or digital device that holds the footage. If the original material is lost or damaged, the cost of reshooting can be incredibly high. This cover protects film producers against this eventuality. “It does not matter in what format you are filming; it is critical to make sure it is covered until all prints and editing are finalised,” says Hattingh.

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Insurers have modernised their policies to align with the fact that most film is kept on digital devices these days. “There are rules and regulations that require the film producers to back up all of the captured film regularly to decrease the chances of film being lost.

If, for some reason, the production is unable to follow the back-up guidelines (if they are filming in the bush, for example), that will be written into the policy to allow for the increased risk of captured footage being lost,” explains Shelver.

Nominated key cast and crew This covers the most important people (including animals) on set. If the person or animal is critical to filming and their non-attendance will cause additional expenses, this provides cover for financial losses due to their absence. “Animals are often used in productions and many will not perform without their handler. Therefore

Big budget productions will have stakeholders who have invested large amounts of money.

The only way for them to make their money back is for the production to be completed and distributed. A completion bond provides a guarantee that the film will be completed.

If a film starts running over budget, the company that supplied the bond will provide capital to ensure the production is completed.

This cover is very expensive (typically one per cent of the entire budget), so is only a viable option on bigger budget productions.

“Completion bonds are a very specialist type of insurance, which is not written on a regular basis locally. When it is required, it will usually be written by a larger financial institution and not a specialist film and production insurance company,” explains Shelver.

The complexity involved in securing adequate insurance for film productions highlights the need for a knowledgeable broker. And with a dynamic and evolving local film sector, this industry presents brokers with potential opportunities for new business.

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We currently offer tailor-made short-term insurance packages for the following industries: medical, hospitality, food and catering, body corporate, retail, optometry and pharmaceutical.

With tailor-made solutions from Momentum Short-term Insurance, it’s easy to make the perfect choice for your business.

To get a quote and find out more, contact your Financial Advisor or call our Call Centre on 08 6000 6784.

Momentum Short-term Insurance is an authorised financial services provider.

Momentum Group Limited is a wholly-owned subsidiary of MMI Holdings Limited.

short-term insurance

A film

shoot

bombed

by NATO

A location for a film shoot in Spain turned out to be a bomb target site and contributed to an insurance claim for $15 million.

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hile life-threatening drama and bombing action is usually intended to take place on the film screen, there was once a never-completed movie, where the set was bombed by actual NATO jets because nobody bothered with rudimentary checking.

Paul Raleigh, head of Etana Film Guarantees and former South African Oscar-winning film producer, tells this memorable story both to amuse and indelibly remind brokers about how important thorough pre-checks are in all situations and what can go wrong on a film set that needs to be insured. “One of the most bizarre accounts of what can go wrong happened during the production of The Man who Killed Don Quixote, an adaptation of the famous Don Quixote. Terry Gilliam was excited to direct the film which was to be shot in Spain.

Johnny Depp was to play Toby and Vanessa Paradis his love interest. The French actor Jean Rocheport was chosen to play Don Quixote and spent seven months learning to speak English for the role.”

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• On the first day of shooting, in a Spanish desert, NATO bombers ‘attacked’ the film set from above. It turned out that the area chosen for filming was a target practice area for NATO. • On the second day, a flash flood and hail appeared from nowhere – unanticipated in a desert – damaging equipment and demanding a total location change.

• Days later it turned out that Rocheport (Don Quixote) couldn’t ride the required donkey due to a herniated disc and had to return to Paris for an operation.

Production ended completely: insurance claim $15 million.

The backstage irony Although not insurance related, it is ironic that while the film was never completed, a documentary called Lost in La Mancha went on to become a best-selling DVD. Originally intended to capture behind the scenes footage for promotional purposes, the documentary

took on an intriguing life of its own by documenting this weird story.

The insurance perspective Raleigh says there are two critical factors when considering the insurance side of this disastrous Don Quixote film shoot in Spain: • How is it possible that a location was chosen that was a NATO bombing site? This was negligence on the part of the production company which should have been monitored by the bond company, which Etana does in SA in these circumstances.

• Why was a proper medical not conducted on the lead actor? After all, he was not a young man and the bond company should not have provided a completion guarantee if he was excluded from cover for medical reasons, such as his herniated disc.

Raleigh adds, “Of course, I’m not familiar with the intricacies of the claims, but I suspect in this case it would have been a bit of a bun fight

Scenes from Lost In La Mancha with director Terry Gilliam's on the set of The Man Who Killed Don Quixote.

between the bond company and the insurance company as to who would pick up the claims tab. But it dramatically highlights the cost of oversights when insuring film productions.”

Insuring filming in sa Location selections often provide challenges.

Raleigh explains, “At the moment one of the productions insured by Etana Film Guarantees is shooting in the Cape Flats. All the proper risk prevention boxes have been ticked but the area is dangerous at night due to gang activity.

This means unusual and relevant strategies need to be in place to manage the specific risks associated with this location. For instance security, community involvement and police presence are involved for night shoots. The daytime filming ends at 18h00. That’s when the gang members begin to fire live ammunition at each other!

“There’s a strict rule that the daytime crews make sure they’re long gone and out of there.”

Oscar winner, Paul Raleigh (right) produced Tsotsi, recipient of Hollywood Oscar for Best Foreign Film in 1996. He's seen here with Madiba and Tsotsi actor Zenzo Ngobo. As a film maker, Raleigh spotted insurance needs and partnered with Etana to create a specialist Centre of Excellence, Etana Film Guarantees.

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An

outdoor lifestyle Andre Krause, national manager: distribution, Glacier by Sanlam

M

any policyholders believe that their basic comprehensive insurance policy will provide them with cover for off-road driving. However, this is not the case. Many policies exclude cover for off-road driving, whereas specialised 4x4 insurance will automatically cover your clients.

In early 2010, a client riding off-road was involved in an accident. The driver went across a stream, losing the 4x4 trail and the car broke down. It took roughly half an hour for three cars to get the 4x4 out of the water. Extensive and costly damage was caused.

The client had previously been advised by his short-term broker to take out specialised 4x4 insurance, which he did. In this particular case, the funds (100 per cent of the amount claimed) were paid into his account within five working days.

As a general rule of thumb, when advising clients: if the car has a 4x4 mechanism, it needs 4x4 insurance. The reason is that offroad trips are not always planned. For example, a driver may have to take an unplanned detour, causing him to drive off-road or over a sand dune, in which case he may not be covered with ordinary insurance.

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needs specialist insurance

When advising clients on their insurance needs, it’s advisable to consider their overall lifestyle.

If the client uses the 4x4 for camping trips, check whether the camping equipment and accessories (e.g. fishing rods) are insured under their all risks policy. Clients with a more active lifestyle should also ensure they have adequate cover for death and disability as well as income protection.

"if the car has a 4x4 mechanism, it needs 4x4 insurance. The reason is that off-road trips are not always planned."

Income protection products provide cover in the event of both temporary and permanent loss of income, resulting from either illness or injury. Research shows that most disabilities are of a temporary nature, in which case an income protection product would provide the best cover. Lump sum disability benefits cover only permanent disability.

The following are some of the benefits of income replacement products: • Temporary disability is automatically covered. If your client has only lump sum disability benefits, a lengthy – but still temporary – disability could result in him having to dip into his savings to cover his expenses during this period.

• Your client can be specific about his income needs and can select the income amount to be replaced. He is able to increase this as his income increases. He can also ensure that the payment benefit keeps pace with inflation.

• Your client may enjoy tax advantages.

The premiums paid for an income replacement product are tax deductible, whereas this is not the case for lump sum disability cover. Your client will, however, pay tax on the income when the benefit pays out. This does not apply to a lump sum disability payout.

Decisions about life cover and short-term insurance could have a significant impact on your clients’ financial wellbeing and should be looked at in the context of their overall financial planning.

The perfect balance of protection for high net worth clients.

Introducing UsNIQUE Elite Our flagship product was born from the recognition that independent brokers seldom have a VIP channel for their high net worth clients and cannot guarantee special service from conventional insurers. Our policy therefore caters for the high net worth individual with a unique portfolio that includes luxury homes and exotic cars.

The distinguishing feature of this product is the assets out option, which replaces the traditional, unspecified all risks and allows the client open cover up to R250 000 for jewellery, photographic equipment and personal effects.

Values can also be increased at the client’s discretion. An automatic survey of the contents ensures that your client is not underinsured and helps eliminate complications during the claims process.

We pride ourselves on being client-centric, offering the attention to detail and true peace of mind that comes with ourofbrand value-added short-termtelematics insurance solutions. and the benefits of a commercial A broker who believes his primary role is to work hours and the poor conditions the of customisable, programme for carriers are being realised at procure the cheapest quotes for his clients, trucks they drive. Certain incidents have different Fleet Elite owners and underwriters is only available to select brokers. nature,levels.

UsNIQUE sets the benchmark of his own assessment. highlighted that the drivers’ lives – Due and to its specialist can use driving information never available The loyalty of the association is thus largely naturally the lives of other road users – are before, including distance travelled; average dependent on the price of the premiums. often compromised. Many of these vehicles For further information you can contact us: trip speed and where speed limits are exceeded; However, a key criterion to develop and should simply not be on the road. The drivers Tel 086 72 77 854 FAX 0866 888 361 Email drews@aum.co.za estimated percentage of time travelled; and sustain a successful business is determined by are aware of the dangers but are often silent dangerous braking. However, these are merely the manner in which you align your objectives merely to sustain their livelihood. This situation tools. If the data collected is effectively used to the interests of your clients. Firstly you is indeed concerning.

POWERED BY: to control deviant driver behaviour, then the should seek to understand the business drivers application is of tremendous value. It is when of your clients. Once these have been clarified, High-tech innovations, especially vehicle the fleet owner follows the protocol without the broker will be best positioned to optimally telematics, are providing insurance solutions such commitment that we are sceptical. Attitude protect the clients’ livelihoods. Earn the respect unheard of even a few years ago. What is HCV’s manages risk. as a trusted adviser and demonstrate value take on telematics? through your considered and competent input.

Do you have a message for our RISKSA The success of your delivery will positively Telematic devices are tools that provide broker readers? impact on the success of your client’s business. tremendous risk management opportunities

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Authorised Financial Services Provider FSP Number: 35916

Underwritten by Zurich Insurance Company South Africa Ltd

31

Avoiding the financial dangers of

HOME

REPAIRS Christelle Fourie Managing director of MUA Insurance Acceptances

Home renovations need not turn dreams into a nightmare

I

t is an exciting time for any homeowner when they make the decision to build or renovate their home. However, it also presents a number of unforeseen insurance risks not only due to the hazards such as fire or water damage that construction work can present, but through the use of disreputable contractors.

When it comes time for home renovations, the homeowner is more exposed to damage which could possibly result in an increased chance of insurance claims compared to any other time.

Coupled with the fact that most insurance policies restrict cover while buildings are renovated, homeowners need to be aware of the pitfalls of invalidating insurance cover during this time.

Homeowners can become so easily distracted with selecting paint colours, floor coverings or cabinet types that they forget about the most important task of all: choosing a reputable contractor to handle the project. The last thing

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any person needs is the dream of their new or renovated home to turn into a financial nightmare. Warn your client that by not using a reliable contractor, they place themselves at risk of insurance claim repudiations if the structure collapses or starts to deteriorate.

Advise your clients that it is not a good idea to pick the first contractor they find. Selecting a contractor should be a well-researched process that involves a thorough evaluation.

Your client should start off by sourcing several suitable contractors and ask their insurance companies’ claims departments for recommendations to ensure they have a good selection to choose from.

Before any renovation project commences, it is imperative that your client checks whether the contractor they are going to hire belongs to a licensed firm that is properly bonded and insured. They have the right to request to see the contractor’s confirmation of insurance.

The limit must be enough to replace the house should damage occur during the project.

A good contractor should have technical, business and interpersonal skills and the experience to perform a satisfactory job. Therefore, it is best for your client to hire a contractor that has experience with similar projects.

When selecting a contractor the client should be wary of contractors who do not have a physical address, do not want a written contract or those who offer discount for cash payments. These may present many risks to the homeowner and probably means that the contractor is unlicensed or uninsured. Without a written contract, they are unprotected if an insurance claim arises due to damages. The chances are that the claim will be rejected as there is no written paperwork or the contractor is unlicensed. The services of a disreputable contractor may also result in health and safety problems. The chances of

fires and water damage occurring in the home during renovations increases significantly.

During any renovation project it is important that the the workers follow some basic rules to avoid fire damage. Firstly, after the completion of any paint job, all rags, towels or drop clothes with paint, stain or oil-based solvents on them must be properly disposed of, as they increase the risk of fires. Your client should insist that there is no smoking during construction and that a fire extinguisher is always present.

Should the project require the use of a blowtorch, contractors should install a heat shield near any combustible materials and remove any flammable materials or liquids from the work area and they should scan the property for smouldering materials or hidden hot spots before leaving each day.

Water damage can occur during a construction project due to the vibrations of building equipment or poor workmanship. If any walls or roofs are left open during the project, wind-driven rain can seep through plastic protective tarps or temporary plywood. It is best to check for any water damage on a daily basis to ensure it can be quickly identified and damage can be kept to a minimum.

It is vital to remember that most insurance policies require the homeowner to inform the risk carrier of any home renovations and that the standard building and contents policy will not respond to claims as a result.

In addition, the insurance company may see the alterations as a material change in risk, i.e. a thatched lapa built onto a standard construction home could result in the policy being invalidated. If anything happens to the home following the renovations and the value has not been updated with the insurance provider, the insurance provider is unlikely to pay out the full amount needed to replace or repair the damage.

By informing your client of these important insurance considerations ahead of any home construction or renovation project, you can save them the hassle of any financial repercussions while also ensuring you remain a key adviser in your client’s short-term insurance affairs.

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Shatterprufe® windscreens installed

BY PG GLASS CAN SAVE LIVES

Shatterprufe windscreens installed by PG Glass service centres countrywide are proudly developed and manufactured in South Africa.

T

he importance of windscreens in saving lives in vehicle collisions on South African roads is often underestimated.

There are a number of features inherent to Shatterprufe® windscreens that contribute to this aspect of road safety.

SAFER WITH SHATTERPRUFE® • Shatterprufe® enables the airbag system to function effectively by providing a solid area for the airbag to deploy effectively, thus protecting the occupants of the vehicle from serious injury. Inferior or ill-fitting windscreens pop out on impact, resulting in the airbag flying out of the window. CONSUMER ACTION: Trust PG Glass to expertly fit Shatterprufe® windscreens.

• Shatterprufe® prevents projectile objects from penetrating the windscreen. The strength

in the windscreen is determined by the vinyl that is used. Shatterprufe® is manufactured according to OE (original equipment) specifications and is made with premium virgin vinyl. The vinyl used in our windscreens does not contain multiple plasticisers (inferior quality or non-automotive grade). Note: Windscreens manufactured using vinyl with multiple plasticisers result in the glass delaminating from the vinyl which could result in severe lacerations (in an accident). CONSUMER ACTION: Trust PG Glass to expertly supply and fit Shatterprufe® windscreens.

TRUST PG GLASS • Our awesome service o We are committed to ensure that your customers received excellent service at all times. o We will authorise your customer’s claim – no holding for a call centre operator for your customers.

o Our customer services clerks are always smiling and ready to wow your customers.

• Saving you money o We will always repair a chip on a windscreen before we replace, saving the cost of a replacement. A chip repair done the PG way will restore your windscreens back to 100 per cent strength and integrity.

• Home glass disaster o We have a team of competent glaziers that is waiting for your call. All our glazing is done in accordance with National Building Regulations. We have emergency teams available in the metro areas to assist your customers.

• Other products o PG Glass professionally installs LLumar Smash and Grab safety film.

Call Centre: 0860 03 03 03 | Browse our website: pgglass.co.za | Follow us on Facebook

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CAR WASH DAMAGE could impact premiums W

hile damage incurred at a car wash is usually covered by most insurance policies, it is important for your clients to know that a claim will have an impact on their claims history and potentially on premiums going forward; making prevention the best solution, according to Leslie Mitchell, managing director of GarageSure Consultants and Acceptances.

Scratches and damage to the mirrors can easily occur to the exterior of a car during an automated car wash where a large automatic drive-through machine is used. “Damage can also occur during a hand-operated car wash where petrol attendants use cleaning equipment such as high pressure water hoses. Older vehicles with already worn exterior paint work may be further damaged under a high pressure water hose cleaner.”

The best way to avoid the risk of the vehicle being damaged, according to Mitchell, is to remain at the site throughout the duration of the car wash and ensure that the car wash selected is reputable and well-run. “The owner of the vehicle should also be advised that having the engine washed is done so at their own risk. This is not an everyday task and it is crucial that the person tasked to do the engine wash has a thorough understanding of the job at hand.”

He notes that while much of the risk lies with the consumer, there are certain responsibilities on the part of the car wash owner. “The owner must ensure that the machine is checked regularly for foreign objects that could cause damage and most importantly that the machine is serviced regularly. The owner also needs to ensure that the cleaning materials being used are car-friendly and that the mats are not soaked during the cleaning process,” Mitchell explains.

Most owners of petrol stations with car washes believe that public liability cover is sufficient; however, mechanically propelled vehicles are specifically excluded under standard policy wordings. “In addition, property in the custody, care or control of the car wash owner is also excluded from cover under the public liability section. In fact, the correct policy section to

50

have in place is the motor traders’ internal section,” adds Mitchell.

It is important for your clients to know that while disclaimers provide a defence for the car wash owner in the event of litigation, ultimately, the law is clear that the owner cannot contract out of negligence and if found to be so, they will in all likelihood be held liable. “If the customer believes the car wash has acted negligently, they can advise the responsible party, who will in turn

advise the insurance company. The insurer will then assess the merits of the matter to reach a settlement,” he continues.

“In order to prove negligence, it is essential the client states their case clearly and retains all correspondence, from the payment slip to the names of the people who were spoken to. It is also important to put all information in writing as soon as possible so that no details are forgotten.”

to contract farmers and outgrowers goes hand in hand with technical assistance that empowers emerging farmers with know-how on good agronomic and business practices,” says Marais.

Food and agribusiness

critical to Africa’s economic development he potential and effective harnessing of food and agribusiness in Africa will be key drivers for the continent’s economic development and global competitiveness in the foreseeable future. This is according to Ernest Tettey, chief portfolio officer at the African Development Bank (AFD).

T

Tettey says that within the sub-Saharan Africa (SSA) economy, agribusiness forms a significant and growing sector. “For several SSA countries, the share of agribusiness services and manufacturing is expected to account for at least a third of GDP growth rate.” The AFD has a mandate to contribute to the sustainable economic development and social progress of its regional members by mobilising and allocating resources for investment in its regional member countries.

According to the University of Pretoria’s agricultural economics and rural development department head, Johann Kristen, between 2000 and 2010, South Africa spent R140 billion on agriculture and ground development.

Kirsten also highlights that during this period there were inconsistencies in the principles and policies for agricultural and rural development in South Africa, as the money often did not meet its intended objectives.

Herman Marais, managing partner at Agri-Vie, the sub-Saharan private equity fund investing in food and agribusiness, agrees, stating that investing in emerging farmers without them having ready access to know-how and markets can be counter-productive. “Africa has more than 60 per cent of unutilised arable land globally. In Agri-Vie’s investment model, investing in vertically integrated food and agribusinesses that offers off-take opportunities

Tettey explains that the AFD is a key investor in Agri-Vie, which provides an appropriate vehicle to channel funds for meeting Africa’s growing investment needs in agriculture. “The AFD holds a seat in the private equity fund’s advisory board, which ensures that other important cross-cutting objectives are mainstreamed into investee companies,” he says.

He says that several countries in the SSA region have comparative advantages in agriculture in terms of land availability, soil fertility, good climatic conditions and water availability.

“However, with the current challenges in the global food environment, the need to invest in the region’s agriculture sector has become more imperative than ever. These investments will contribute to job creation, enhancement of food security, income generation, poverty reduction and skills transfer,” says Tettey.

Marais says that Agri-Vie’s fund is on track to deliver its targeted, risk-adjusted returns.

“Our multi-disciplinary investment team has established strategic relationships in its target sectors and countries, giving the fund access to an ongoing flow of often exclusive investment opportunities.

“With sustainability as a key investment criterion and its cross continent investing, investors benefit from specialist sector knowledge and a risk-diversified portfolio of direct investments.

Agri-Vie 1 has completed more than half of its capital deployment and envisages completing its current investment programme over the next two years,” says Marais.

“We are partnering exciting food and agribusiness companies in South Africa, Ethiopia, Uganda, Rwanda, Tanzania, Kenya and Mozambique. Several of these growth companies are set to become household names in future years.”

“Private equity investments of this nature also aim to support crucial infrastructure development. Under its mid-term strategy, the bank seeks to increase selectivity and develop a more robust private sector,” concludes Tettey.

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Insurers call for changes to driver’slicence law

In a bid to reduce accidents involving younger drivers, certain UK vehicle insurers are suggesting allowing learner drivers onto the road at 16, but requiring them to spend at least a year in a car before being allowed to take the driver’s licence test.

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A

ccording to a report in the Daily Mail, the Association of British Insurers (ABI) wants the age at which young people are eligible for a learner’s licence to be lowered to at least 16 and a half. Additionally they would be required to complete a minimum one year of driving before being allowed to take their driving test. The belief is that this will reduce the number of accidents involving young people.

South African vehicle insurers are sure to be following this with a close eye, as currently the age at which a British youngster is eligible for a learner’s licence is 17, the same as in South Africa, where the road accident statistics are appalling.

The restrictions would not stop there if the ABI gets its way. It is calling for young novice motorists not to be allowed to drink any alcohol if they plan on driving, as well as restricting the hours they are allowed to drive. The ABI also wants newly qualified drivers, under the age of 25, to be granted only a graduated licence, which would last for two years when a second test would be taken for a full driver’s licence. The graduated licence would restrict how many passengers could be carried and prohibit driving between 23h00 and 04h00, unless it was required for work purposes.

The harsh proposed measures are as a result of statistics that show drivers under the age of 25 are twice as likely to fail a breathalyser test and are more at risk of an accident when driving at night. “Our proposals are not designed to drive young drivers off the road, but to ensure that they become safer drivers. We must act to reduce the tragic loss of young lives on our roads. Whether it is inexperience, youthful bravado or sheer recklessness, we need tough action to better equip young drivers to handle the dangers of driving,” says Nick Starling, ABI’s director of general insurance and health.

The British Government is not completely convinced of the proposed changes as it does not want to unfairly penalise responsible young people who have to drive to work. But the ABI countered by saying, “Allowing young people to obtain a provisional licence at 16-and-a-half mitigates the impact on their mobility that would result from having a 12-month mandatory minimum learning period starting at 17.”

“A car is potentially a lethal weapon, and we must do more to help young drivers deal with the dangers of driving,” concludes Otto Thoresen, ABI director general.

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Pilots must

be put through their paces H

uman error remains the biggest problem in aviation safety, according to Chamsou D Andjorin of Boeing. He was speaking at the South African Civil Aviation Authority’s sixth annual Safety Seminar in October in Midrand. In contrast to previous seminars, which focused on the need to work together as a collective, this year the theme was ‘Safety begins with me’.

In his welcome address, the director of civil aviation, Zakhele Thwala, encouraged the aviation industry to interact with the SACAA and to get involved with matters relating to safety. He believes that the South African aviation industry should be involved in strengthening the position of aviation in Africa under the guidance and leadership of the Department of Transport. Regional cooperation is essential to achieve this goal. In 2012, Africa was reported as having made some progress in certain countries, such as Ethiopia, South Africa and Kenya, which have airlines with high safety standards. “South Africa can be the catalyst of aviation safety in SA Ad 3 REPRO Rev 1.pdf 1 Africa,” saysRISK Thwala.

Andjorin says that a key factor to addressing issues around human error is to determine the required skills and to develop a global strategy. Young talent should be attracted, while existing resources should be utilised through co-operation.

Barker from the Council for Scientific and Industrial Research (CSIR). At the seminar, he addressed aviation safety during air shows and reviewed recent international air show accidents. He concludes that training and skills remain the biggest challenges in this sector.

The impact of technology on aviation safety was discussed at the seminar by Harry Nelson from Airbus. He says that although it reduces workload, some tasks are less suited for automation and that the dangers are overreliance, complacency and the lack of the ability to take over manually in emergencies.

Since loss of control is the biggest killer, it’s important to train pilots to the point of competency. Pilots must be recruited, properly trained and motivated, according to Nelson.

Internationally, 2011 was the second worst air show year ever, according to General Des

As technology continues to evolve, aviation safety will require special efforts from all sectors of the aviation industry, especially from a training perspective. “Since the Safety Seminar was initiated six years ago, we have moved forward in terms of our ability to work together with one single goal, to reduce the number of accidents and incidents,” concludes Thwala.

2012/01/31

10:43 AM

CAR HIRE INSURANCE TO KEEP YOU MOBILE

GOODS IN TRANSIT WITH A DIFFERENCE

StayMobile is an add-on or standalone product that gives the client the assurance of being mobile in the event his vehicle is stolen, has an accident, third party insurer cover has been utilised or in the case where their car has to be serviced. The producted can be added on to a domestic lines policy or commercial. Specifically packaged products or options can also be arranged.

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LCVSure accommodates the small to medium sized business whose primary requirement is to insure bakkies.

The product includes free GIT and tools cover for each bakkie covered on the policy.

We specialise in courier companies, small delivery contractors, tow trucks, building contractors and general purpose commercial bakkies up to 5 tons. The policy can include office contents, business allrisks, electronic equipment, additional GIT and tools. Bakkie hire is also available on the policy, as is excess buybacks. Roadside assistance is included.

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BAKKIE INSURANCE FOR THE SME

MY

CY

CMY

K

Policy Provider underwrites and administers StayMobile, LCVSure, TransitSure and RetrenchSure. Policy Provider is an authorised financial service provider: Reg. No. 2004/020247/07. FSP No 43569. Policies underwritten by Saxum Insurance Limited.

Saxum Insurance Limited is an authorised financial services provider FSP No 32460.

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TransitSure is a conventional Goods In Transit policy. Cover includes overloading exceeded, over height exceeded, salvage and recovery, debris removal, loading and off loading cover and roadside assistance; including mechanical breakdown on the vehicle, security in the event of an accident, overturning or collision. Roadside will co-ordinate and manage scene of incident with all authorities and suppliers. We also offer contingent goods in transit cover.

RetrenchSure offers three products. 1. A standalone policy FOR THE ESSENTIALS where a client can insure a monetary value that will be paid out in the event that the insured is retrenched.

2. An add-on product that can be added to a domestic line policy or similar, that will insure a premium or payment in the event that the insured is retrenched.

3. A customised product that can be tailored for instalment sale agreements, premium payments or monthly credit agreements.

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Microdots won’t reduce need for car insurance As of September 2012, it became compulsory for all new vehicles requiring South African Police Services (SAPS) clearance to be fitted with microdots. While it may take some time before microdotting reduces premiums, as the bulk of premium costs are driven by vehicle accidents and not crime or theft, it is expected to reduce theft of new vehicles on our roads.

icrodotting involves printing miniature silicone chips with unique identification numbers, legible only when magnified.

These chips are sprayed onto the underside of a vehicle and into the engine compartment.

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Since it is impossible to find and remove all the dots, police will use them to identify vehicle owners by cross-checking numbers on the National Information System (NATIS) data base. This process is expected to deter thieves and illegal auto part receivers as vehicles, or even their parts, can at any stage be traced back to the correct owner.

“The advantage of this system is that since the tiny microdots are practically undetectable and sprayed so broadly within the vehicle, they will allow police to trace a vehicle even if the engine number is defaced or destroyed,” says Gari Dombo, managing director at Alexander Forbes Insurance.

While microdotting is expected to reduce vehicle theft among new vehicles, theft of older, non-dotted vehicles may increase. Old vehicles will not be microdotted until they are sold and reregistered. As such, it is expected that theft of older vehicles may rise.

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“There is nothing stopping owners of older vehicles from installing microdots and, if the vehicle is stolen, informing the police of unregistered microdots on the vehicle,” notes Dombo.

“From now on it will be much more difficult to clone vehicles. Chop shops will also find it trickier to distribute parts, since each part can now be easily linked to its eNATIS-registered vehicle of origin.” Under these circumstances, simply placing a sticker on a vehicle indicating that it has been microdotted may act as a powerful deterrent to criminals.

However, since the bulk of premium costs are driven by vehicle accidents microdotting is not expected to reduce insurers’ premiums. In fact, vehicle theft currently contributes less than 10 per cent of overall premium costs. “One only has to compare the number of accidents, fender benders and scratches that your vehicle has sustained over the last few years, compared with the number of times it has been stolen,” explains Dombo.

However, he says that microdotting could contribute in reducing the rate of future premium increases. But while microdots are a good security measure adopted in many countries, consumers should not expect rapid

premium changes, because vehicle theft costs will only reduce gradually as newer vehicles replace old ones.

And even if vehicle theft and auto-parts crime reduces significantly, “any inflation increases may wipe out any positive effect that a reduction in vehicle crime might have on premiums”, adds Dombo.

“This is not to say that some insurers will not use microdotting in advertising to attract new vehicles to their books, just as much as they offer to beat any quote, or pay you R300.

That is the nature of competition and advertising,” he continues. At any rate, since it is currently understood that manufacturers will be responsible for installing the microdots, Dombo thinks it unlikely that the insurance industry will take a hard-line approach to insurance clients who may be unaware of noncompliance or have older vehicles.

In time, however, he predicts that microdots will become the norm. As all new vehicles are registered or older vehicles reregistered at sale, requiring that they go through roadworthy processes, it is likely that microdotting will be included in compliance requirements.

Ensure cars are covered while at motor dealers

efore your client leaves their car at a motor dealer in order to sell it, they should ensure that this is in fact covered by their insurance policy. This is according to Attie Blaauw, head of personal lines underwriting at Santam.

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Blaauw warns that most insurance policies exclude cover while a vehicle is being used in connection with motor trade. “When a vehicle owner leaves the vehicle at a dealership, the insurer has no way of telling who will be driving the car and where it will be stored.

Therefore, the known risk factors that are considered when constructing an insurance policy can no longer be applied. Most policies exclude cover while the vehicle is used for any purpose in connection with the motor

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trade, except for maintenance or repairs.

This can leave vehicle owners without cover if their car is damaged or stolen while left at a dealership,” he says.

Vehicle owners who wish to sell their cars should do the following to ensure that their vehicles are covered while being sold through a motor dealer:

There are reports of syndicates targeting motor dealers including Lexus, Mercedes-Benz, Volvo and Range Rover and a number of cars were stolen from these dealerships’. The syndicates posed as sub-contractors dressed in work overalls and carried clipboards. They would then simply get into the vehicles and drive them away.

• Make use of a trusted motor dealer who has the appropriate insurance cover in place. The motor dealer should have comprehensive cover in place for these vehicles.

• Read the fine print of indemnity forms they may be requested to sign by the motor dealer before handing over the vehicle.

"The syndicates posed as sub-contractors dressed in work overalls and carried clipboards."

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Liability following the CPA The Consumer Protection Act (CPA) came into effect on 1 April 2011 and, judging by media reports, has clearly benefited consumers. However, most of the reported cases relate to goods supplied rather than to services as provided by the short-term insurance industry.

Richard Stevens Deputy regional manager, Cape Town, at Renasa Insurance Company Limited

I

t is still early days to gauge how the act will impact, if at all, on our industry as far as liability covers are concerned. Insurers have done the necessary by amending liability wordings to cater for the provisions of the act.

But to really understand the current situation, it is appropriate to revisit traditional liability covers as well as review the new covers that followed the introduction of the act.

Cover provided in terms of the old public liability policy was against “damages for which the insured becomes legally liable following accidental death of or bodily injury to or illness of any person or accidental loss of or physical damage to tangible property.

The damages had to be as a result of the business or in connection with the business of the insured occurring within the territorial limits and during the period of insurance”.

Subject to the terms, exceptions and conditions, cover would exist as long as the following were met: 1. The insured was legally liable.

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2. The damage had to be accidental.

3. Damage was in connection with the business.

4. Within the territorial limits.

5. During the period of insurance.

Historically, in the event of a potential claim, whoever (third parties) alleged negligence had to prove the same. And the client (insured/product supplier) had to be legally liable. In other words, the negligence had to be established by the courts. This, in a sense, favoured the insurer and insured because third parties under various circumstances would find it extremely difficult to prove negligence. If they were indeed able to do so, the legal costs to pursue a case would be prohibitive. In most instances, aggrieved parties would give up rather than pursue claims against defaulters.

Our own industry experts suggest that the term is used to describe the broadest possible cover when compared with the traditional cover.

Despite this, it is still limited in scope as, apart from products and defective liabilities, there are other specialised liabilities which are dealt with separately. And our limits are nowhere close to what is available overseas.

Following the introduction of the CPA, the industry responded by introducing what is now commonly referred to as the broadform liability cover to replace the old public liability cover.

Without going into too much detail, the broadform liability cover is far wider than the traditional liability cover and, importantly, it excludes the word ‘accident’. As stated earlier, previously any third party loss had to occur as a result of an accident. Excluding the word accident does not introduce losses deliberately caused, but it does shift the onus of proof to the insurer. And if the insurer rejects a claim based on the fact that an intentional or deliberate act caused the loss, the insurer will be required to prove the allegation. Injury, property and territorial limits have also been redefined and the covers are now much wider to cater for the requirements of the CPA. It must be noted that liability must still be established by the courts.

The term ’broadform’ was first coined years ago in the overseas insurance market where it was more about the monetary limits. It was recognised that traditional limits were far too low and that there was a need for some top-up cover to increase the limits. Included were other liability covers which did not always form part of the standard liability cover, effectively creating a type of comprehensive liability policy.

Effective from 1 April 2011, the Consumer Protection Act has sought to protect consumers of the products and services offered by the range of financial institutions in SA. The act differentiates between ‘goods’ and ‘services’ supplied, the latter pertaining to and having a direct bearing on the shortterm insurance industry. The fundamental rights of consumers are well documented.

Gone are the days when consumers were treated without regard of their rights of recourse against defaulting suppliers of goods or services. In terms of the new act, complaints are directed to the Consumer Commission which will investigate and adjudicate where the act has been violated or breached.

The act imposes strict liability on the suppliers of goods and services which means that the onus is no longer on the one who alleges negligence to prove it but rather it is up to the party against whom it is leveled to disprove negligence.

The new broadform liability wording effectively widens the cover and, consequently, the exposure of insurers. This must result in an increase in the premium consideration (which, historically, was very moderate). There are those who mistakenly believe that there is no longer a need to charge for defective workmanship and products as these are now included in the broadform wording.

In view of the wider cover, a correct rating is imperative to ensure the premium pool is sufficient to cater for potential losses. A proper rating requires a clear understanding of what the client’s business entail; for example, do they manufacture/supply or doctor supplies in any way? There are many other considerations and the onus will be on intermediaries to ensure they have this clear understanding of the client’s business, and then to arrange covers accordingly. In the case of complex businesses, it may be necessary to engage the services of a liability surveyor. If the client is adequately covered (every intermediary’s primary objective) and pays a premium commensurate with his business activities and risks, there is a positive spin-off for all involved in the process.

So, when it comes to liability covers, it is no longer a case of business as usual because the end supplier of a product is held liable to the user in the event of it failing. Prior to the act, this liability could be passed on (possibly to the manufacturer), making it necessary for the former to ensure that adequate liability cover is in place.

Local liability assessors confirm that the short-term insurance industry has not been negatively affected by the provisions of the act. This is a credit to the industry. It conclusively demonstrates that, at least for now, the short-term house is in order. In any case, the CPA is here to stay. As service providers, we must continue to execute our service with due care and in harmony with the requirements of the act as the consumer is king.

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finance& insurance S A LE S | T R EN D S | NEW S | i n f o

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The struggle for spares

Extended delays in sourcing original spare parts in South Africa can result in irate policyholders, who often blame insurers for the impact this has on the repair process. Who are the worst offenders and what is the solution?

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New vehicle sales slowdown

September’s new vehicle sales numbers represent a severe break in the momentum the new car industry has experienced this year. But the market continues to grow, albeit by a relatively small margin.

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The

struggle

spares

for

The availability of original spare parts in South Africa and the implication it has on the repair process, has left several policyholders fuming. Often, it is the insurers who are caught in the crossfire.

RISKSA finds out who the industry’s worst culprits are.

Anton Pretorius

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Breaking the shackles of warranty The interminable vehicle repair processes of panel beaters, which have to wait ages on spare parts from certain motor manufacturers, are making many policyholders hot under the collar. Burnt by exorbitant costs and the lack of accessibility of spare parts in South Africa, policyholders are irate and brokers and insurers are getting it in the neck. Under present market conditions, insurers are obliged to repair using only OEM parts and a certified network of car maintenance facilities (the manufacturer themselves) for vehicles that are under motor plan or warranty. Because of this control, manufacturers have carte blanche on repair processes and will often add on steep price tags.

The South African Insurance Association’s (SAIA) general manager of projects, Viviene Pearson, says that because manufacturers are without any market competition, they are in a position to make their parts expensive. Lengthy delays in receiving spare parts are just as much of an issue.

The effect of OEM parts on the repair process While some high-end motor insurance policies allow the use of a rental or loan vehicle for a two-week period, while your client’s car is in the shop, many panel beaters can wait up to three or four months for a part to arrive in South Africa. According to Pearson, motor warranty is not the only reason for steep prices and lengthy repair services. Since motor manufacturers insist on using OEM parts, most of the parts must be imported and this is often an expensive and time-consuming process.

Richard Green, general manager of Automagic’s coastal region, a company specialising in non-structural automotive paint and body repair, points out that panel beaters cannot afford to keep pricey stock on hand, which doesn’t move, or sits on the shelf for too long. “Ultimately, this means that they have to import parts,” explains Green. 

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Excessive prices lead manufacturers to wait for vehicle accidents to accumulate before ordering a shipment or container of parts, which works out cheaper in bulk. This means policyholders can wait several months for their parts to arrive.

“For the relatively small size of our country’s car park, we have over 200 variations of some vehicle models in South Africa, making it impossible to keep up,” says Green.

John Smith*, owner of a body repair shop in Gauteng’s East Rand agrees that shipping delays are a problem. “Shipping parts individually is expensive, so manufacturers wait for part orders to mount up before sending a shipment. However, because we are the furthest destination point, we suffer the brunt of it when a ship is delayed,” he says.

"The complexity of certain imported upper market vehicle parts has an impact on the exorbitant repair costs and waiting periods."

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“The complexity of certain imported upper market vehicle parts has an impact on the exorbitant repair costs and waiting periods,” adds Green. For instance, because of the intricate nature of Land Rover parts, one headlight (with all its complex wiring and electronic systems), can cost up to R80 000 a pop to repair and take months to arrive.

Pearson believes the answer lies in the certification of cheaper generic parts. “This will eliminate the manufacturer’s anti-

competitiveness and certainly speed up the process of repair,” she observes. The quality of generic or aftermarket parts has vastly improved and they are considerably cheaper than OEM parts. “Already, several certified and quality generic parts exist on the market. Not only are they built to the equivalent specification as the OEM parts, but they are more affordable and readily available,” she adds.

“The only difference between a generic part and a branded OEM part is often just the logo and the price.” Despite huge push backs and protests from OEMs, Pearson says that generic parts are expected to become mainstream in the near future. And because of their accessibility, they’ll assist panel beaters in the repair process.

"manufacturers have the power to void your client’s warranty or motor plan should they opt for more cost-effective, generic parts."

Safety or saving?

Of course, manufacturers will argue that there is currently no standard for generic parts in South Africa. They also reason that ensuring the consumer’s safety and the quality of their car is required to uphold their brand and reputation.

But some argue that these are merely scapegoat arguments for charging exorbitant prices and strong-arming the industry. Indeed, manufacturers have the power to void your client’s warranty or motor plan should they opt for more cost-effective, generic parts.

Pearson feels that the change in mindset is in the hands of the insurer. “Things are heating up, consumers are fed up and brokers are the ones who have to deal with the problems,” she remarks. A four- to six-month waiting period is a big setback for clients, especially those who depend on their vehicles for transport.

While the client’s safety should be the insurer’s main priority, Pearson believes that it is the responsibility of insurers to push government and regulators for certified, affordable and safer motor parts to be made more available, and be incorporated into claims and motor plans. “South Africa is the last outpost. We’re one of the only countries in the world where OEM has this kind of control over consumers, parts and panel beaters through warranty conditions,” says Pearson.

In fact, we reported in our September issue that the SAIA is in the final stages of a project to certify alternative parts and create a minimum set of standards to ensure their quality, which they believe will have a far-reaching positive impact on the motor insurance industry. Pearson believes that the industry and consumers will benefit from such a project.

Inadequate workmanship The availability of spare parts is not the only cause for concern among consumers.

Inadequate workmanship from certain manufacturers has caused just as many headaches, and has contributed significantly to the delay in the vehicle repair process. “The attention to customer and aftersales servicing from certain major motor manufacturers is often neglected,” says Green.

Muhammad Hassan from Automagic’s Durban North branch agrees. “I have worked as a parts salesman and I do not think that it is the parts that are the delay in most cases, but the salesmen themselves. They forget, do not follow up or just don’t bother to go to the trouble of ordering a R50 part,” says Hassan.

Smith feels that the problem lies with stock managers who purchase the parts. “At certain manufacturers, stock managers are appointed without any experience or knowledge. As a stock manager, you need to know how many vehicles and models are on the road, and you need to make provision for accidents.”

He says that as a result of poor management, major manufacturers are carrying a lot of dead stock. “The manufacturers’ stock inventory is brimful of unusual parts like sunroofs that are never used. However, the necessary parts, like bumpers or radiators are never available and need to be ordered,” adds Smith.

The guilty parties An auto body repair specialist, CMC Auto Panel, says that currently, the three biggest culprits of stock availability are Renault, Tata and Citroën. “And since Jeep and Mitsubishi moved away from Mercedes, we’ve been having endless problems with them too,” they say. Smith says that the culprits on his list include Mitsubishi and Citroën, with the South Korean brand SsangYong his biggest headache.

“Small parts like trimmings are a nightmare to replace. SsangYong says it takes 21 working days for the parts to arrive, but we wait two to three months. I have had several customers in here screaming, shouting and threatening us with the Consumer Protection Act, but SsangYong washes its hands of it,” says Smith.

Mike Brophy, claims manager at Tuff Stuff, 4x4 and lifestyle insurance product specialists, says that after speaking to some of their approved repairers, he came to the conclusion that 

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there are very few manufacturers who are not suffering from a severe shortage of parts.

He says that at the top of the offending manufacturers' list is Mitsubishi.

With over 40 registered complaints on the hellopeter.com website from the past year, many consumers are livid with Mitsubishi’s lack of service delivery and stocking of parts. One consumer wrote, “Mitsubishi provided excellent service upon purchase.

However, after an accident that required minor repairs, Mitsubishi simply said that there were no spare parts available. The salesman then told me that certain clients have been waiting more than three months for a bumper.”

problem with one of the fuel-injectors. I phoned them for a price on replacement, and to my disgust they expected me to pay R5 200 for the part. You also have to pay up front for your parts, and then wait four weeks for it to arrive.”

Jeep is also a hot topic of discussion on hellopeter.com. “The window of our Jeep Wrangler 2011 was broken and needed to be replaced. We had to wait from April for the window as they did not carry stock. It was eventually fitted in August. This is ridiculous service and one can only wait so long for a window to be supplied. Jeep SA needs to support the vehicles they sell by carrying sufficient spare parts,” wrote an irate customer.

Another comment read, “I bought a Mitsubishi ASX, and was rear-ended earlier this year. It then took four months to get my car back, primarily because of Mitsubishi’s shocking stock of parts and completely unorganised ordering.

They ordered the wrong parts, twice!”

Mitsubishi, Daihatsu and Jeep all made the list of Automagic’s top five worst offenders regarding poor repair servicing. Hassan says that Mitsubishi is the worst at the moment.

“The parts are either not available or take ages to arrive. I do understand that it is due to the change in ownership, however, it does not make our jobs any easier,” he notes.

Daihatsu is another regular offender. One consumer said the following: “I own a 2001 Daihatsu Terios 1.3L. The car developed a

*Name has been changed.

The 10 worst offenders in terms of spares availability, as judged by brokers and insurers within the industry 1. Mitsubishi 2. Jeep 3. Tata 4. Proton 5. Daihatsu 6. Peugeot 7. Renault 8. Kia 9. Hyundai 10. Citroën

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Car parts manufacturers

unsure of APDP

According to a report on iol.co.za, Pitot told a conference at the SA Automotive Week in Port Elizabeth that the APDP needed to be adjusted to better reward higher localisation and retain some protection for the local industry.

Pitot believes the APDP, in its current form, is a threat to local part production, because the only way to make use of the benefits offered by the APDP was to import more. “If an original equipment manufacturer (OEM) is importing a component and decides to localise that component, they earn additional

production incentives; they then have to import something else to offset that production. There is something wrong with the logic of the programme,” Pitot says.

He says that local content in domestically produced vehicles was about 35 per cent on average, which he believes is too low. He maintains the reason for this that original equipment manufacturers (OEM) do not pay import on components and are able to offset other duties through exports, so there is virtually no incentive for OEMs to buy locally produced parts and no protection for South African component manufacturers.

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he National Association of Automotive Component and Allied Manufacturers executive director Roger Pitot believes that certain parts of the Automotive Production and Development Programme (APDP) do not make sense.

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New vehicle sales

A

SLOWDOWN

fter months of double-digit year-onyear growth, the National Association of Automobile Manufacturers of South Africa (NAAMSA) reports that new vehicle sales for September reflect a significant deceleration in the growth momentum of the industry.

The slowdown, reported by NAAMSA’s independent statistical service provider, Messrs RGT SMART, could be attributed, at least in part, to September of 2011 being a particularly strong month for new vehicle sales. However, business confidence in general in the country has taken a knock because of the tragic events at Marikana and the current high level of industrial action in an increasing number of sectors in the economy. Consumers would have been equally affected and concerns about the economic environment of the country could have resulted in purchasing decisions being put off until the situation stabilises.

Even though September’s year-on-year numbers represent a severe break in the momentum the new car industry has experienced this year, the market has still grown, albeit by a relatively small margin. In September 2012, the aggregate industry domestic sales improved by 1.4 per cent (740 units) to 55 097 from 54 357 units in September last year. Total domestic sales for the nine months of calendar 2012 remained 10 per cent ahead of the corresponding nine months in 2011. Export sales also registered marginal improvement of 2.7 per cent (703 units).

Overall, out of the total detailed (disaggregated) reported industry sales of 52 368 vehicles (excluding Mercedes-Benz SA), 78.4 per cent (41 040 units) represented dealer sales, 13.9 per cent represented sales to the vehicle rental Industry, 3.4 per cent represented the industry corporate fleet sales and 4.3 per cent to government.

The daily selling rate during September continued close to six-year high levels. The September 2012 new car market, for the third month in succession, had been supported by strong

72

demand on the part of car rental companies with the car rental industry accounting for 18.6 per cent of total sales. Including estimates for MBSA commercial vehicle sales by segment – sales of industry new light commercial vehicles, bakkies and minibuses had reflected a decline of 5.2 per cent (725 units) at 13 279 units. Sales of vehicles in the medium and heavy truck segments also recorded declines of 8.6 per cent (73 units) and 7.7 per cent (129 units) respectively. The weak sales performance in this sector is likely a reflection of lower business confidence.

Exports of South African-produced motor vehicles, including MBSA export sales data, registered a marginal improvement of 2.7 per cent (703 units) up to 26 638 vehicles exported. The vehicle export industry could receive a boost over the medium term as various export programmes are ramped up. Exports of light commercial vehicles in particular are expected to increase substantially in 2013.

Continuing low interest rates will support sales of new motor vehicles and the highly competitive trading environment, attractive incentives and new model introductions will help the industry remained on track during 2012 for growth of around 10 per cent year on year.

"Even though September’s year-onyear numbers represent a severe break in the momentum the new car industry has experienced this year, the market has still grown, albeit by a relatively small margin."

Optional vehicle extras could impact premiums P

eople often see their cars as extensions of themselves and spend thousands enhancing them with accessories and gadgets that affect everything, from how the car looks to how fast it goes. However, car owners should be aware of the insurance implications of enhancing their car, according to Helen Szemerei, CEO of IntegriSure.

Some items that are expensive to replace – such as adaptive headlights, parking sensors and run-flat tyres – could lead to an increased insurance premium. Conversely extras that increase the car’s security – such as tracking systems and anti-hijacking devices – can reduce the monthly car insurance premium.

Furthermore, because many added extras on a

vehicle have a long life span, and because the motor insurance policy is generally based on the current value of the car, it is advisable to cover valuable extras separately. “If the money invested in the cost of the vehicle is going to be lost as a result of its depreciation, it becomes even more important to insure extras like rims, tinted windows and sound systems under a separate contents insurance policy. In the event of a claim, these values will not depreciate and will be covered in full,” Szemerei explains.

While the extras on a vehicle can affect the insurance costs, so too can the make and model of the vehicle. For example, the number of accidents related to a specific model can play a part in driving up premiums for consumers. “We find that some models of cars tend to be driven by younger people, who as

a group tend to have a higher accident rate, so cars in this bracket will often come with an increased premium, regardless of how much the car costs.”

Another consideration is the origin of the car.

Szemerei warns that imported vehicles can be very expensive to repair, with many requiring parts to be imported from overseas. “This is another factor likely to affect the average cost of repair and therefore the insurance premiums for the car.

Brokers should be able to indicate to their clients what impact different makes and models will have on the premiums before they start shopping for their dream vehicle or decide to enhance it. Choosing wisely could save clients significantly in the future.

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For the win: insurance for sports players and athletes

Top athletes could qualify for discounts on their insurance because of their impressive fitness and health levels. However, their propensity for sudden cardiac problems means they may not always be the good risk that they seem.

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Preparing for the worst

The complexities in critical illness and disability insurance policies may leave clients with less cover than they thought they had. We find out how brokers can ensure their clients have the correct amount of cover and what policy conditions must be complied with.

75

win For the

insurance for sports players and athletes

When you’re top of your game in your sport of choice, it may seem like you’re in peak condition, yet even fit athletes can suffer cardiac arrest. So are athletes a healthy risk for insurers?

Bianca Wright

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M

arsh Africa offers insurance products that cover the specific risks associated with sports. The participant liability insurance product protects against responsibility for injury or property damage sustained by players, coaches, officials or other participants. “The exposure to a sponsor, promoter or team can be significant, considering the number of people who are in the middle of the action or close to it, to sustain injury or damage to their property. This coverage, with limitations, can be endorsed onto the general liability policy. In most team sports, player versus player [cover] is excluded,” according to Marsh Africa.

The professional liability product, on the other hand, covers exposures arising from the performance of duties by athletic trainers, physicians and other professionals that might be imputed to promoters, sponsors, events or teams. To protect themselves, sponsors or teams should ensure these professionals have certificates of insurance and that they obtain their own professional liability coverage. As added protection, promoters, sponsors or teams should have this cover added to their general liability coverage on an incident basis, in case they should be named in litigation or otherwise have a claim made against them.

Take the risk Petrie Marx, product actuary at Sanlam Personal Finance, says that top athletes, who are generally fit and healthy, are indeed of a good risk profile as far as life insurance is concerned, but says that there are important distinctions between different types of benefit and different sports. “As far as life cover is concerned, athletes or professional sportsmen should be of a good risk profile. They may even qualify for discounts, compared to the general population, because of their good fitness and health levels,” Marx says. However, the sudden cardiac problems suffered by sportsmen are a reminder that not even they are immune to life’s risks and that they should specifically consider life and dread disease/critical illness cover.

In addition, there are some very suitable cover products available for serious injuries and professional sportsmen may need this protection even more than others. For example, a cyclist may be seriously injured in a fall or lose a limb and this may end their career.

In the US, companies such as Allen Financial offers specialised products for professional athletes that cover loss of future earnings,

contract completion, loss of endorsements and other related risks, as well as key player coverage, high limit permanent disability and individual and catastrophic AD&D. While South African products differ in terms of coverage, there are options available.

A range of options Sanlam’s unique accidental injury benefit provides cover in the event of an accident; for example, the loss of limbs, or loss of use of limbs, vision loss or coma. “What makes the protection even better is that it covers a variety of other injuries, common to motor vehicle accidents, but also serious falls, e.g. multiple rib fractures that puncture the lungs, liver or spleen ruptures, or fracture dislocation of the spine,” Marx says. “This is really cost-effective protection that every athlete who trains on our roads should consider, even amateurs who venture out over weekends.” In addition, he advises that professional sportsmen should consider functional or physical impairment cover, where the payment is made on certain defined and permanent functional losses, including loss of the use of limbs, vision or hearing loss, and heart and lung functions that can be measured specifically.

Berkshire Solutions, which provides cover for Athletics South Africa, offers an insurance cover product for permanently licensed athletes. It pays out R25 000 in death cover; R25 000 for temporary disability; and temporary total disability that pays R200 a week with a waiting period of one week and a maximum cover of 104 weeks (two years). Medical expenses are covered to a limit of R15 000. Cover is restricted to sanctioned athletic events only, organised by Athletics South Africa or its affiliates, and cover is valid two hours before and two hours after a sanctioned event and includes training activities.

Another local sports specialist insurer is Vimba Sports Consultants, the branded sports division of Archersfield Broking Solutions. It offers events liability insurance, sports travel insurance, risk cover for sporting venues and facilities such as sports clubs, as well as tailor-made products for participants’ liability, accident cover for adult and youth sporting events and professional indemnity cover for trainers and coaches.

Not just the pros Amateur sports players can benefit from cover such as that offered by Assupol and In4Sports. In 2009, Kestrel Insurance Brokers and a number of organisations identified the need for a sport product that would ensure immediate emergency evacuation in the event of any serious injury, according to a report by In4Sport. In4Sport’s range of products provide access to emergency medical evacuation and services (SOS+), limited dental and bone fracture cover (Protect+), and accidental death and disability cover (Care+) at affordable premiums, regardless of whether someone is a member of a medical aid or not.

Marx explains that professional sportsmen’s situations become unique when it comes to disability insurance. “In the case of disability insurance for sportsmen, a very small injury may mean the end of your career, whereas the same injury may not even hamper the ability of someone doing a different job,” says Marx. “That is why, generally, the typical occupational disability products offered to the general population excludes payment for the occupation of professional sportsman.”

In the line of duty Specific occupational disability cover can be designed and priced for specific sports, but group risk products are usually better suited than individual products because each product needs to be tailored. “You may find specific unions, clubs or associations offering this form of cover to their players. You also need a big enough group to pool the specific risk sensibly,” he says. Sanlam has designed individual disability solutions for professional rugby or soccer players. These products are priced specifically for the intensity of these sports, and adjusted to take into account the typical career span of these sportsmen before they move into other occupations.

Marx sums up, “Top athletes need adequate risk cover just as much as any other person. In fact, it may be wise to affect this cover while you are still young and healthy, and before certain injuries set in that may affect the terms at which you will be able to take out cover some time in future. Life cover, dread disease and injury cover is of particular importance and generally available. In addition, professional sportsmen should also consider their protection in case something causes them to no longer be able to follow their very exciting occupation.”

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Higher, faster, further Dr Karsten Filzmaier, Munich Re

2012 is the year of great sporting events in Europe: the European football, athletics championships and the Olympic Games in London. More than 10 000 athletes from some 200 countries will compete in 302 events.

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ach and every one of these athletes will be viewed as a symbol of physical strength and health. But what are the hidden risks of a life continuously pushing at the limits of physical performance? Are the sudden deaths among top athletes merely the tragic fate of individuals or the result of physical strain?

Top athletes are supposed to be an attractive target group with business potential. For example, many top footballers are top earners.

Clubs, which actively invest considerable sums in buying new players, need to insure against the risk of them being unable to play for long periods due to health reasons. These athletes also need their own insurance policies to adequately cover their families. In summary, top athletes are a lucrative target group for life insurance: young, physically fit, healthy and economically attractive because of their frequently high-value policies.

Unfortunately, there is a tragic flip side. Between 1980 and 2006, 1 866 top athletes died suddenly in the US alone. The vast majority of these deaths were not due to accidents but to sudden cardiac arrest.

This was further evident in 2012 with the following cases of cardiac arrest among professional athletes: • 17 March: Fabrice Muamba (24) had a cardiac arrest during a championship football match in England; fortunately he was successfully resuscitated.

• 14 April: Piermario Morosini (26) died during an Italian football league match.

• 20 April: Alexander Dale Oen (26), the Norwegian world champion swimmer, died

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of a sudden cardiac death during trials for the Olympic Games.

• 13 May: Timo Jacobs (29), the German yachtsman, died of cardiac failure after a regatta.

This raises some concerns about whether top athletes really are the favourable risk they seem and whether particular top athletes may be at a greater risk of sudden cardiac death.

Underwriters need to reassess their approach of the risk assessment of individual top athletes.

What lies beneath In itself, sport is healthy and prolongs life.

This principle was recently confirmed for high performance sports by a study from Taiwan. It showed that sporting activity of only 15 minutes per day increases life expectancy by almost four years. Long-term studies have also shown that athletes have a normal, perhaps even prolonged, life expectancy.

Cases of sudden cardiac death among top athletes, however, contradict this generally positive assessment. Sudden cardiac death in top athletes is rare but does occur more often than is generally believed.

Distinctive features include: Most of those affected are younger than 26 at the time of death.

• Most cases of sudden cardiac death occur when playing football or basketball.

• Nine out of 10 cases are male athletes.

• Death occurs during or shortly after the sporting activity in 80 per cent of cases.

Establishing the cause of death is essential in

developing a risk assessment strategy for top athletes. Interestingly, nearly all those affected had an underlying heart disease which would not usually be detected. Three-quarters of these conditions were either congenital or of genetic origin.

A healthy heart develops from sustained physical exertion during high-level sporting activities. If the heart is diseased, however, after a certain point it can no longer compensate for the increased physical strain and (in the worst case) suddenly stop beating. We have to wonder why these heart conditions are not picked up earlier, given that many athletes are under medical supervision.

Competitive sports may lead to physiological changes in the heart (like several heart diseases). The heart responds to the constant stress: the cardiac chambers may enlarge and the heart muscle may become thicker than normal; this is sometimes referred to as athlete’s heart. These physiological changes in the heart actually lead to changes in the ECG of many top athletes. Several heart diseases can also cause dilated chambers or thickened heart muscle, but these are pathological conditions. And that’s the problem.

Changes in the heart, which would be taken as signs of existing cardiac disease in an average person, may be assumed to indicate a particularly welltrained heart in a top athlete.

Not all top athletes, however, develop an athlete’s heart. More than 90 per cent of professional racing cyclists have a heart diameter and thickness above the normal limits.

In contrast, the same pronounced changes are present in only 20 per cent of volleyball players and are almost never found in equestrians. The athlete’s sex also plays a part. Female athletes tend to have a larger cardiac diameter and greater cardiac mass than non-athletic women, but these measurements are seldom outside the normal limits. This information is important in interpreting the findings correctly for risk assessment and in making correct decisions.

Underwriting an athlete No more than 0.5 per cent of top athletes have heart disease; but the risk of sudden cardiac death is up to 100 times greater in this group. No insurer wants to incur this risk indiscriminately, especially as the sums involved can be very large. The underwriter’s task is to find that needle in a haystack.

Is there a way to identify the high-risk top athletes at an economically viable cost and with relatively little effort?

The Munich Re algorithm for the risk assessment of top athletes contains the latest medical knowledge, taking scientific aspects into account. Using the medical data available (medical history, physical examination and resting ECG) more than 90 per cent of top athletes can be accepted as a normal risk for life insurance, without any additional investigations. Abnormal findings that require further investigation (usually cardiac ultrasound examination) are expected in less than 10 per cent of cases. More sophisticated diagnostic techniques, which are not suitable for general risk screening because of their cost-benefit ratios, offer a high degree of certainty in the individual case.

MIRA, Munich Re’s underwriting manual, contains guidelines for the optimal risk assessment of top athletes. It allows rapid and reliable risk assessment on the basis of only a few prognostic criteria. Using MIRA, most top athletes can be assessed without any difficulty. If there are any abnormal findings, it is important that expert medical advice is subsequently obtained.

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Preparing for the worst Nick Krige

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Critical illness and disability insurance are increasingly complex and policyholders are sometimes left with less money than they thought after a debilitating event. We ask how brokers should be advising their clients to make sure they get the most out of their cover.

“P

eople are living longer, partly because of the medical improvements in the treatment of heart attacks and cancers.

This means that severe illness and disability cover have never been more important,” says Ferdi Booysen, Greenlight product marketing manager at Old Mutual. Critical illness and disability insurance benefits provide clients with the peace of mind that, if disaster strikes, their family’s financial future is secure.

In times of trauma or grief, the last thing your clients or their families need is to have to deal with the added stress of having a disability or critical illness claim contested or denied.

To ensure a smooth claims process and for the cover to remain valid, the policyholders must be fully aware of, and comply with, all requirements in the policy. In general this is not difficult to achieve, but there are a few pitfalls.

That being said, there are cases where policyholders are making legitimate claims, but are not receiving the amount of cover they are expecting. “This is where a financial adviser plays a vital role. The adviser will assist the client in determining the amount of cover the client requires. In so doing, the adviser paints a realistic expectation for the client as to the pay out levels at claim stage. Consideration should be given to benefit escalations to increase the sum insured over time as well,” says Andre Froneman, product specialist at Altrisk.

It is general knowledge that disclosing certain information on an insurance application could lead to increased premiums or exclusions on the policy. This creates a dangerous temptation to withhold or give misleading information to the insurer to secure the best deal. Clients should be warned against falling into this trap; it is a direct violation of the policy agreement and will result in claims being rejected. Clients should understand that any short-term gains from reduced premiums will be nothing compared to the cost of a rejected claim. 

Do not withhold information

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Policyholders must disclose any previous medical conditions when applying for disability and critical illness cover. If they have had cancer before and it returns, the insurer will be well within their rights to refuse a claim if the client did not inform them of the previous case.

Not having enough cover There are many reasons clients may not have sufficient cover in case of a critical illness, some are self-inflicted by balancing the cost of insurance against something that provides instant gratification. “Adequate cover can be expensive and the perceived value is low.

Buying personal cover is usually weighed up against an immediate gratification product, like purchasing an iPad or a new car. Young people often believe that they are invincible, until they experience a change in their own health, when it may be too late or too expensive to buy cover,” says Booysen. In this instance it is imperative for brokers to impress on their clients just how devastating disability and critical illness can be without insurance cover.

Existing poor health is another reason some policyholders may not be able to obtain enough cover. “Some customers could already be in poor health when they apply for insurance. While life cover may be granted either at a standard or a higher premium, it is possible that the severe illness or disability cover will be declined. This is because some impairments or conditions carry a higher risk of causing a disability or a severe illness, without necessarily affecting life expectancy,” explains Booysen. For example, clients with high blood pressure and cholesterol have an increased risk of having a stroke, which could severely disable them without causing death.

It is important to consider what critical illnesses and potential disability the client is most at risk for, and factor in the real cost of those events when considering the level of cover. “It is important that clients understand what they’re buying so they can anticipate areas of shortfall in their cover and look at ways to make up these shortfalls, or plan for them to ensure their needs are adequately addressed,” explains Sean Hanlon, executive director of BrightRock, which was launched in 2011 and operates under mandate from Lombard Life.

The point of disability and critical illness cover is to provide financial security for the policyholder’s family when they are suddenly unable to. This includes providing the financial means to help the policyholder adjust to life with a disability or after a serious illness, such as adapting their home for wheelchairs.

Therefore, when deciding on an amount of cover, brokers should encourage their clients to draw up a budget to more accurately understand how much the family needs on a daily basis.

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"It is important that clients understand what they’re buying so they can anticipate areas of shortfall in their cover."

Many disability and life insurance policies require that the client inform the insurer of an incident within a specified time. Therefore, if the policyholder is incapacitated and their family is unaware that the cover exists or don’t know where the documents are kept, the timeline could expire and the claim denied.

Beneficiary changes It is not just the policyholder’s details that need to be correct and up to date; the insurer must be made aware of any changes to information regarding any nominated beneficiaries as well. The insurer can only be responsible for what it knows about.

Therefore if one of your clients has a child and wants cover set aside for them, they will need to adjust their beneficiary documents.

Claim information When one of your clients makes a claim, they must make sure that they provide as much accurate information and documentation as they are able. Not only will incomplete or incorrect information put the claim at risk, it will also delay a legitimate claim being paid, which may put their family at financial risk.

Taking on additional risk This goes hand in hand with withholding information on an application. Policyholders must resist the urge to not inform their insurer that they have taken on additional risk. If one of your clients takes up smoking, their insurance premiums will be higher because they are at a higher risk of getting sick or dying. If they fail to inform their insurance company of such a change and illness occurs because of that change, their family will be left with nothing but big bills.

Misunderstanding policy Brokers should make their clients aware that there will be circumstances under which a policy will not pay out, even if full disclosure has been made with the insurer. If there are any exclusions on the policy, it is imperative that the intermediary goes over these with their client and makes sure they fully understand what they are and are not covered for. Typical exclusions relate to alcohol consumption, smoking, drug usage, suicide and violation of the laws of the land.

“Although flexibility and comprehensiveness of benefits is crucial for customers, the reality is

“Often, a lack of understanding of the purpose of the cover is to blame. Current product structures do make it very clear for which events the cover is intended, but clients may not understand the underlying financial needs involved. For example, clients may imagine that a lump-sum capital disability pay out of R5 million is more than enough if they’ve not understood that they’ll not only need that lump-sum to pay off their bond, but also to provide them with an income for the rest of their life to take care of all their expenses from big ticket items like their medical aid contributions and their children’s education to everyday concerns like groceries, transport costs, utility bills and the like,” adds Hanlon.

Cindy digs life She’s our type NO.1 ’RE

SURERT ERM IN T DUC O G R N P FIA LOAR – RISK 2 1 0 2 E YE OF TH

WE

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Policy documents are important and warrant being kept in a safe place, but if the policyholder’s family is not aware of the cover or where the documents are being kept, there is a chance they will not be able to make a claim, especially if the policyholder is incapacitated.

that both of these come at the cost of benefits being more difficult to understand fully. Simply put, products have become more complex over the last few years. Without the help of a qualified financial adviser, customers may very well end up with benefits that do not behave the way they expected them to. Not only can a financial adviser explain the benefits, terms and conditions in simple terms to customers, but they can also ensure that the benefits purchased are relevant to the customer’s specific risk needs,” says Ryan Switala, head of risk product development at Liberty Life.

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Timing out

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Fight the good fight Brokers should make absolutely sure that if a claim is declined that it is for valid and legal reasons, and that everything has been done correctly from the client’s side. If it does happen that the broker or the client believes that they have a strong claim and the insurer continually refuses to pay out, it might be worth taking the claim to the ombudsman.

Insurance brokers exist to help clients with the intricacies of insurance. Critical illness and disability insurance are particularly complex and sensitive policies, as they exist to protect the client’s way of life. It is imperative, therefore, that brokers go through all critical illness and disability policies with their clients to be certain that everything the client wants and expects from the cover is part of the policy.

It is equally important for brokers to impress on their clients exactly how important these types of insurance are. “We believe the most important discussion is around the purpose of the cover and the underlying financial needs the clients are insuring. If clients grasp what their cover is for, how it will grow and how it will behave over time, they’re bound to be more receptive to the financial adviser’s advice.

This will shift the discussion from one that typically tends to centre, from the client’s side at least, purely on the price of cover to one that focuses on the value of cover,” concludes Hanlon.

We don’t judge Cindy on the fact that she’s a Cotton Grader, that she is HIV positive, has asthma or even on her dress sense. Fact is Cindy is what one may call high-risk. Our unique approach to underwriting favours those who cannot be lumped in with the rest of the crowd.

If you know someone like Cindy, tell her about Altrisk.

We’re her kind of risk insurer.

Dare to be different For more information refer to your Altrisk broker consultant or go to: www.altrisk.co.za

Altrisk is an authorised financial services provider (FSP 9869) and a Hollard associate company.

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PERMANENT INCOME PROTECTION

IS THE WAY TO GO FOR DISABILITY COVER F

inancial advisers who prioritise a lump sum pay out in the event of permanent disability can leave their clients with a potentially crippling financial shortfall.

Some advisers default towards lump sum disability cover because their clients are more easily reassured by the thought of a substantial lump sum to tide them over the initial cash flow demands which would arise from permanent disability. However, analysis by income protection specialists FMI shows this to be dangerously short-sighted. “The short-term gain translates into long-term pain,” says FMI CEO Brad Toerien, who counsels that the best approach is usually to invest in a permanent income protection policy which pays out in monthly instalments for the rest of the individual’s working life.

He says that lump sum disability has a role to play in permanent disability cover but the lump sum pay out should be utilised for the correct reasons, settling outstanding debts, business assurance, partial contributions towards an investment and preparing for major lifestyle changes as a result of disability. It should not be used to replace future income.

In the case of Matt, a self-employed graphic designer, who earns R25 000 a month, FMI calculated how much it would cost him to buy permanent income protection to provide a monthly income of R25 000, linked to inflation until retirement age of 65, and compared it with how much lump sum disability cover he could purchase for the same premium.

Assuming investment returns (net of fees and tax) at nine per cent, in every case there was a significant shortfall between the end of the lump sum investment and retirement age.

Aside from the obvious unknown about the timing of any permanent disability, there are other significant variables in planning future income cover solely through a lump sum disability option.

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Changes in either future inflation rates or investment returns can enormously impact the amount of cover required, and there is no way to accurately predict future inflation or investment returns.

permanent and longer temporary disabilities and it is specifically designed to match the client’s income over time, with the option of increasing premiums in line with inflation.

A typical case would be 35-year-old Ben, a selfemployed plumber with 30 years until retirement and a gross income of R25 000 a month. How does he calculate the lump sum he needs to generate sufficient cover?

Temporary income protection is also vital because far more clients are likely to experience temporary disability of a kind which could seriously impact on a self-employed person’s income (as many as 30 per cent according to one recent study) than are likely ever to experience permanent disability.

A lump sum pay out also brings enormous pressures to bear on the client to make the right investment decisions at the moment of disability to deliver an ongoing monthly income until retirement age.

Toerien believes that, given all these uncertainties, most clients are better off with a combination of temporary income protection for temporary disability and a mix of permanent income protection and lump sum disability cover for permanent disability.

Not only is permanent income protection less expensive than lump sum disability in the long run, but premiums are tax-deductible. Permanent income protection pays out monthly income replacement benefits and can be used to cover both

Temporary income protection also provides crucial bridging income through the period during which a disability is being diagnosed and verified as permanent.

Toerien concludes, “It is important to understand that lump sum disability, permanent income protection and temporary income protection are different products with different functions and that they should be used in conjunction rather than as replacements for each other. FMI advocates that clients draw on the strengths of each product to ensure comprehensive cover for permanent disability which provides genuine long-term security.”

GOOD

LEADERSHIP Rob Rusconi is general manager of Lombard Life, a licensed long-term insurer that seeks to meet customer needs through partnerships like BrightRock and FMI. Lombard Life is a member of the Lombard Insurance Group. peaking in his capacity as president of the South African Institute of Race Relations Prof Jansen was referring to education, but his point surely applies well to other parts of South Africa’s policy development. With this in mind, the papers emerging from the National Treasury on the subject of pension reform are a refreshing and carefully considered set of thoughts with an excellent awareness of practical realities.

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PENSION REFORM Designing a national system for provision in old age is exceedingly complex. How much more difficult is it to assess an existing system and determine the changes that need to be made to it to achieve, over years or decades, a range of conflicting objectives that are difficult to define?

The reform has been on the cards for many years and good work has been undertaken in pursuit of this goal. The National Treasury, the Department of Social Development, the Financial Services Board and a number of other State entities like the Department of Labour have all been contributing to the development of thought that underpins any changes. Agreeing on all of the attributes of a system, however, is understandably difficult.

Consider a few of the following challenges around prioritisation: • D o we allocate resources to saving or to providing for the dependants of those who die or become disabled during their working lives?

• Similarly, do we require any saving to be set aside exclusively for use in retirement or do we give to workers access to a part or all of this saving in the event of their losing their jobs?

“There is an abiding illusion in public discourse, that we have good policies and just need to implement them,” says Jonathan Jansen, education thought leader. “The problem with this formulation is the separation between policy ideals and practical realities. A policy is, in fact, only as good as its realisation in practice.”

• D o we utilise State resources to provide in retirement for those who are working or do we require them to allocate a part of their limited income to providing for their retirement?

• Do we put time and effort into improving the effectiveness of existing retirement arrangements or do we focus on establishing centrally managed arrangements, or do we do both?

• For those participants of any central arrangement, is it more important to provide some guarantee of their pension or to link explicitly the amount that they are able to put in with the corresponding pension that they are able to take out?

• Do we limit the form in which benefits may be taken, either at retirement or beforehand, in the interests of those who participate in the system?

• Is it appropriate for the government to reallocate resources from wealthy participants to poorer and, if so, what are the most appropriate ways in which to do so?

• How much should policymakers be involved in ensuring that service providers do not charge inappropriately high fees, taking profit at the expense of participants?

This really just scratches the surface. When you add to this the challenges of sequencing policy developments in health financing, banks and insurance, it really is little wonder that it has been difficult to agree on the überplan, let alone implement it.

BITE SIZE With this in mind, it is pleasing to see the National Treasury initiate a move forward

in smaller steps. The team is now more than halfway through releasing a set of five discussion documents, each covering an important part of the retirement reform process.

Why is this a good thing? Because it identifies parts of the process on which we can make progress rather than waiting for the universal solution that is proving so hard to get to.

The five areas covered by these papers are the following: • T he costs of retirement funds and measures that might be used to reduce them.

• Concerns with the market for products – we call them annuities mostly – that convert the accumulation of retirement saving into an income.

• Preservation and portability of retirement savings, together with the issue of uniform access by all stakeholders.

• Alternative models and metrics to incentivise savings in long-term vehicles.

• The options for designing a uniform retirement contribution model, which is mostly about the tax system.

These are not simple issues but they can be tackled one by one, which is what National Treasury is doing. Papers are readily accessible and not unduly long but they cover the subjects thoroughly, providing a proper review of the situation as it is at present and a range of options, some of them notable for their insightfulness and originality.

All of this points to good leadership in the policy space. Now we need to respond to the proposals: we all form part of determining the framework that works best for the people.

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enterprise

risk

management s t ra t e gi c p l a n n i n g | g l o ba l t r e n ds | i n f o

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Protecting what’s personal

We explore how the POPI Bill will affect insurance companies. Plus, if you’re not yet up to speed, we’ve put together a POPI Bill for dummies.

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Medical records at risk

Medical record mismanagement is a serious problem facing local hospitals and the patients under their care. Electronic records management may be the solution.

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P r o t e ctin g what’s personal The Protection of Personal Information Bill was passed by the National Assembly in September and promises to radically alter the landscape of the right to information privacy in South Africa.

Hanna Barry

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ifty pages and 12 chapters unpack the POPI Bill, including eight information protection principles that cover everything from limitations on processing, issues of consent and collection of information to purpose specification, the need to retain records and the importance of security safeguards to protect the integrity of data. The question on our mind is: how will it impact the insurance industry?

Christine Rodrigues, an associate at Norton Rose South Africa, explains that one of the most important requirements of the POPI Bill is the need to obtain consent. Individuals need to provide express consent to their personal information being shared. “When a person enters into an insurance contract, they consent to the use of their personal information for the purposes of the insurer using the information for underwriting and claims.

However, the methods of obtaining personal information may require modification where the insurer intends to use the information for other means,” explains Rodrigues. “Under POPI, the processing may be done if the use of the personal information is to carry out the performance of a contract with the affected individual. The information processed by the insurers must therefore be relevant to performing underwriting and claims.”

“Where an insurer uses a binder holder, for example, agreement has been obtained by virtue of the insurance contract between the individual and insurer to the transfer of the information to the binder holder required in performance of the insurance contract.

However, the personal information cannot be used for any other purpose unless the individual consents to their information being used for such a reason,” Rodrigues continues.

“It is important to ensure that each party in the value chain has consent to use the personal information for any function other than for which it is required. If consent is not obtained, each party in the chain could be found in contravention of POPI. The insurer must ensure it is not placed in the position that it is liable to an affected person.”

Updating data management Daniella Kafouris, manager at Deloitte Legal, says that where an insurance company outsources any part of the life cycle of data, the third party (such as broker or UMA) must ensure that it has put measures in place that are the same or similar to the privacy compliance principles adopted by the insurance company.

“This is usually enforced through an agreement, and assessment for compliance is carried via

privacy impact assessments,” she explains.

“Any aspect of the insurer/broker or insurer/ UMA relationship that involves the processing or collection of personal information will require attention.”

Insurers may have to upgrade their systems in relation to the protection of data. “Insurers need to have security processes in place to ensure that no unauthorised person can access client information,” notes Rodrigues.

Kafouris adds that insurance companies cannot assume that they comply with the bill by virtue of the way in which they currently process personal information. “Each insurer’s data management practices must be reviewed in isolation in order to ascertain their level of compliance with each of the identified principles,” she explains. “Perhaps, due to the nature of the industry that the insurance company operates in, there may be areas within the organisation that contain pockets of excellence; however, POPI brings in some very new requirements with which all organisations need to align.

For example, the outsourcing requirement, in terms of the relationship that brokers have with insurers and the manner in which they process personal information for the insurer, will need to be adhered to.”

Mind your marketing The POPI Bill could have unpleasant implications for direct insurers. Insurance companies cannot sell client information to a marketing database that will contact its clients to sell other services or products, unless the individual has given consent. The insurer would need to get the consent of the individual that it may contact them at a future date to market and sell other unrelated insurance products. If consent has been given for the purposes of underwriting and administrating an insurance policy only, then the information cannot be used.

This works both ways. “Wherever leads are obtained, these must have been consented to. For example, if an insurance company buys leads, it needs to make sure that the entity which sells the information has obtained the consent of all the people to utilise their information for insurance marketing purposes.

The insurance company must be mindful that it may be held to be in contravention of POPI if a complaint is lodged against it and it is unable to prove that the complainant gave consent for their information to be sold or used for marketing purposes,” says Rodrigues.

Ensuring compliance Kafouris says that the first step any organisation should take in ensuring compliance is to undergo an analysis to identify any gaps in their processing of information and ascertain any requirements to bridge that gap. This will also help to identify the pockets of excellence within an organisation. “Processes will need to change from an internal as well as external perspective. Most legal documentation, policies, processes and technical structures would need to be reviewed and amended in order to be in line with POPI. How the insurance company will interact with its clients may change as a result,” she says.

Rodrigues notes that much of what exists under the POPI Bill exists in the common law, but that POPI codifies and extends the common law. “The bill centres on protecting peoples’ rights, especially in instances where personal information is abused in terms of receiving unsolicited communication,” she says.

The heavily regulated nature of the insurance industry will certainly count in its favour, as there is some overlap between the current legislation and the POPI Bill. At any rate, many of the processes that are codified in the bill should already be in place in insurance companies, as part of good risk management.

The bill provides for a one-year compliance period, but Kafouris does not think that this is sufficient for organisations such as insurance companies, due to the nature and volume of personal information processed by them.

In fact, Deloitte said in a report that the full compliance procedure could typically take up to three years.

Glass half full in the same report, Deloitte explains that organisations can gain significant business performance improvements by approaching the bill as a strategic opportunity rather than a compliance cost. For example, companies can select technology that supports more than just data integration, while data security upgrades are likely to add value when linked with the overall business strategy. Digging deeper into existing customer data can enhance a company’s customer focus.

By conducting data analyses of personal information for PPI compliance, valuable information can be obtained regarding customers and markets. “Organisations that lead the market in becoming PPI compliant will earn customer respect and loyalty,” notes the report. 

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The POPI Bill for dummies

We know that you don’t have time to read 12 chapters and 50 pages, so here is a brief summary.

What’s the point of the bill?

The aim of the bill is to promote the protection of personal information processed by public and private bodies, giving legal grounds to our constitutional right to privacy. This will bring South Africa in line with similar measures adopted by the European Union.

Why should we care?

If you’re an insurance company, broker, UMA or administrator, you handle what is classed as personal information. Since the bill has been enacted into law, non-compliance will be dealt with harshly and an information protection Regulator will be established with significant powers to ensure compliance.

Are there any exclusions? as ? untsormation o c t Wha onal inf etails, ID ct d ace, pers conta , to r

pe om od ty ing fr thnic Anyth rs and blo tus and e a r e t s b inal o num arital l er, m ation, crim persona d n e g Educ istory, the erson . in th orig ap ymen ws of f emplo s and vie pinions o erson n o ep io r h o t in op ws out he vie onal al ab and t r individu term pers ht e e eig anoth luded. Th lt with in clude c a are in tion is de d some in a n a inform te points ra . s t sepa s li sive exten

There are a few exclusions. Some of these include personal information that is processed in the course of a purely personal or household activity; personal information that involves national security or is related to the judicial functions of a court; and personal information for exclusively journalistic purposes.

What is a record?

A record refers to any recorded information, regardless of form or medium. This includes books, maps, graphs, drawings, labels, taperecorders, photographs and films. Information that is derived from other information stored on computer hardware or software is also included. Any recorded information that is in the possession or under the control of a responsible party, whether or not it was created by a responsible party and regardless of when it came into existence counts as a record.

What is a responsible party?

A responsible party means a public or private body or any other person who, alone or in conjunction with others, determines the purpose of and means for processing personal information. 

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And processing?

Processing includes anything from collection, collation and storage, to retrieval, updating, distribution and destruction. In other words, any operation or activity that handles personal information. Personal information may be processed only by a responsible party that has notified the Information Protection Regulator.

Sounds scary. What’s that?

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f an ed o nvict e act is t o c n n th nme s of perso Any e in term r impriso c o n offe to a fine ting the ce c n e liabl h. Obstru erforma p a t o e or b tor in th d lead to ile l h la u u w o g c , t e r uties isonmen nd s t i r no of les mp se of ear i incip 10-y other ca POPI pr d e y e th in an iance wi nnot exc fines a e pl com onment c inistrativ illion. m m is r d 0 p A 1 . m i as R nths o h g m i h 12 as d be coul

The Information Protection Regulator is an independent body, subject only to the Constitution, consisting of a full-time chairperson and four part-time members.

These individuals are to be properly qualified and experienced and will likely be practicing advocates, attorneys or law professors.

The regulator has significant regulatory powers and may authorise the breach of an information protection principle. It also has the power to conduct audits of public or private bodies that possess personal information and investigate complaints about the alleged violation of the protection of personal information.

According to the bill, the regulator “is not civilly or criminally liable for anything done in good faith in the exercise or performance or purported exercise or performance of any power, duty or function of the regulator in terms of this act or the Promotion of Access to Information Act�.

The regulator may issue industry-specific codes of conduct that prescribe how the information protection principles are to be applied or complied with, given the particular features of that sector. Failure to comply with a code that is in force is deemed to be a breach of an information protection principle.

Approximately R17 million will be required to establish the office of the Information Protection Regulator.

Information protection officers Information protection officers must be appointed in organisations and are responsible for encouraging compliance with the act and working with the regulator in relation to investigations it may need to conduct. Officers must be registered with the regulator and responsible parties must notify the regulator before commencing the processing of personal information.

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Profile

Gillian le Cordeur CEO at IRMSA

A little more than a year ago, Gillian le Cordeur took over as CEO of the Institute of Risk Management in South Africa (IRMSA) and things have been developing at a rapid rate since then. By implementing new and revised processes, becoming a SAQA approved professional body, and growing their membership base, le Cordeur’s unwavering ambition and drive as an individual has taken the institute to new heights.

We talk to her about her achievements and challenges over the past 14 months.

Tell us a bit about what IRMSA is and what it does.

The Institute of Risk Management South Africa is the leading source of information and networking opportunities in the risk management industry. With members from corporations, both in the private and public sector, IRMSA is non-profit organisation that aims to be the institute of choice for risk professionals and practitioners in South Africa. IRMSA and its affiliates are dedicated to the advancement of the profession and

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“By bringing in new processes and implementing new software, our members can now see the difference.”

accreditation, through research, promotion, education, upliftment, training, guidance and strong relationships with other institutes and associations.

You have been the chief executive officer at IRMSA for the past 14 months. What are some of the challenges you’ve experienced?

It has been a challenging journey, but I am really enjoying it. Starting at IRMSA, there were a few things that required implementation in order to ensure that the institute could start growing and operate more efficiently. By bringing in new processes and implementing new software, our members can now see the difference. The IRMSA team has taken all these new processes and systems in its stride and I am proud of the way that the staff has accompanied me on this journey.

the continued professional development policy and code of ethics for our members. Then the SAQA director rang me up in June and said we have been registered as the professional body for risk management in South Africa.

This was a proud day for us as we had worked hard to make sure we had met all the criteria from SAQA. Our members now have their professional designations registered with SAQA, meaning risk managers will be able to follow a professional framework and achieve professional status.

sector, who shared the need for public sectorspecific topics and speakers, which led us to form a public sector conference committee which put together a fantastic programme for day two of the conference. This is going to be the risk management conference of the year.

A lot has happened at IRMSA since you took over. What are some of the highlights?

Top of the list for 2013 is the development and completion of two risk management qualifications. University degrees are no longer seen as the only access point to a career in risk management. In addition to the professionalisation process, IRMSA is currently involved in the development of the occupational qualifications through the Qualifications Council of Trade and Occupations (QCTO). These qualifications do not replace a university degree but provide risk professionals with an alternative to a traditional university qualification in risk management, which opens up a new career pathway.

With the development of these occupational qualifications, IRMSA has applied to become the assessment quality partner through the QCTO. This means we will be able to maintain a register of assessors and moderators, develop assessment instruments, manage external summative assessments and certify examinations.

We experienced some fantastic victories and highlights over the last year. There has been a significant shift in the way the industry perceives IRMSA and people started knocking on our door and seeing a need for the institute.

Another highlight was the implementation of a new IT system, including the launch of our new website, which was hard work, but very rewarding. We found a great software product where the membership database and the website could relate to each other, meaning members can update their details, interact with other members, update and keep tabs on their CPD points. Training was also new on the IRMSA programme this year. This has really taken off and we are pleased with the response.

The need was definitely there as we had to repeat each session a number of times due to demand.

What can members expect at IRMSA’s upcoming annual awards gala dinner?

We have a record number of nominations this year and it is going to be very interesting to see who is awarded with the prestigious title of 2012 Risk Manager of the Year. This title has been awarded to top risk professionals in the industry like Gert Cruywagen, Errol Kruger and Philip Wessels. At this event we also acknowledge the Rookie Risk Manager of the Year and a number of industry awards to companies who are doing excellent work within their specific industries. This event is not to be missed.

Of which achievements are you most proud?

What have the preparations been like for the upcoming IRMSA conference?

After being shortlisted for the South African Qualification Authority (SAQA) pilot phase in October last year, we worked tirelessly, revised all our policies and processes and implemented

For the first time, we will be hosting a public sector stream during the IRMSA conference in November. Earlier this year, we were approached by members from the public

What goals have you set for yourself and for IRMSA for the year ahead?

Whom would you encourage to join IRMSA and why?

We encourage anyone working with all aspects of risk management in Southern Africa to join as a member of the institute. Our members come from a wide variety of industries and disciplines. By being accepted as the professional body for risk managers in South Africa and by developing curriculum for risk management, IRMSA has raised the standard levels of excellence and professionalism within the industry.

IRMSA was involved in the first-ever World Risk Day held earlier in the year. Were there any notable lessons that emerged?

We were proud to be part of this initiative.

It was interesting to see our global partners sharing similar challenges and experiences from which we can all benefit. It was fantastic having technology unite us and show the world that we as South Africans are at the top of our game.

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Brokers have a game-changing role to play in reducing high fire loss figures oo many of South Africa’s businesses are failing to conduct fire drills, heighten employee preparedness and maintain firefighting equipment and it’s their brokers who can make a difference by creating a process of continuous reminders.

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This would make a huge difference to the unacceptably high fire losses experienced in all businesses including factories and warehouses.

The fact that almost 80 per cent of all shortterm business is placed through intermediaries is proof of the influence brokers can have in guiding and influencing their clients and thereby reducing our unacceptably high losses connected to risk management linked to fire.

By having the client’s back all year, not only at quoting and renewal time, brokers can build loyalty and a lasting relationship that survives the tests of time – making them an indispensable team member of any business.

Essential fire knowledge for brokers Here are the basics of what you need to pass on to your business clients: The three main causes of fire in the workplace: • They are sometimes started through wanton carelessness.

• General lack of awareness of, and alertness to, fire hazards on a daily basis.

• Lack of understanding and formal training of exactly what qualifies as a fire hazard.

The essential foundation is experienced risk assessment which includes vulnerability to fire. It is vital to remember that after the policy is in place, the fire risk does not disappear.

Continuous drills, monitoring, maintenance and awareness is vital and this is where brokers could be strengthening their relationship with their clients through timely reminders.

Etana’s Marcel Wood is head of Etana Risk Management and this year became chairman of the SAIA Fire Services Investigation Committee. In 2010, Wood initiated this committee to knowledgeably lobby government on emergency fire service delivery throughout South Africa in order to reduce the annual loss of life and assets of approximately R3 billion.

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Vital monthly checklist This is a monthly checklist of often forgotten, simple, yet vital fire-prevention risk management elements that need monitoring.

Brokers must remind their clients to check the following: • Equipment: All fire protection equipment needs to be serviced and maintained in fully operational condition. This requires regular tests and includes portable fire extinguishers, fire hose reels, fire hydrants, sprinklers, batteries linked to alarms and any related equipment or wiring.

• Rubbish: Waste and rubbish is a breeding ground for fire. More big fires start in storage areas than in production areas.

• Storage: Badly stored goods can help to spread the fire, impede firefighters from gaining access to the source of a fire, or render the operation of sprinkler heads useless. Neatly stacked goods with wide gangways must be part of a fire management and protection routine.

• Machinery: Inadequately maintained machines can cause fire. The overheating of bearings due to insufficient lubrication or to the presence of dust, as well as heat caused by friction, are common causes of fire.

• Flammable liquids: Negligence in handling small quantities of flammable liquids is a frequent cause of fires and injuries.

• Anti-intrusion: The maintenance of buildings is an essential part of fire protection. Much of the arson is associated with vandalism and burglaries. Walls and fences needing repair – as well as gates and windows that will not fasten properly – provide easy access for intruders.

• Hot work: Building owners should be reminded to execute a hot work permit system for operations such as welding, grinding or any hot work performed on the premises. This ensures that the correct fire protection backup is at hand during these types of fire risk activities. For example, many fires have started due to hot work being performed without a portable fire extinguisher within easy reach.

• Emergency procedure: However good a fire prevention strategy is, some fires are bound to break out. It is critical to make sure they are effectively controlled and, very importantly, that employees know the right action they should personally take during any fire emergency.

Emergency fire procedure If a fire breaks out at the workplace, here are essential steps that everyone needs to know: • Activate the nearest fire alarm.

• Ensure the fire brigade is called.

• Attack the fire with suitable fire extinguishers and/or fire hose reels if safe to do so.

• Evacuate the building.

• Report to the designated assembly point.

• Do not re-enter the building until informed it is safe to do so.

Maintenance staff: Clear instructions must be given to the maintenance team, setting out all actions they should take in a fire emergency.

This includes bringing all lifts to ground level and stopping them as well as shutting down all services not essential to the evacuation of occupants. At the same time they must be aware of the services likely to be required by the fire brigade. Lighting should be left on.

Vital employee know-how All employees need to know how to leave the premises in the event of fire and repeated practice sessions are needed. Fire drills should be held regularly, preferably twice a year, with someone delegated to educate new employees.

Here’s what employees need to know: • Recognise the sound of the fire alarm.

• Always act in accordance with the evacuation plan when the alarm sounds.

• Leave the premises quickly by the nearest possible route.

• Go to the designated assembly point.

• Assemble for roll call to ensure all are safe.

By becoming committed to this specific support role, South African brokers have the power to make a phenomenal difference and make themselves indispensable to their clients.

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The

strategic importance of effective risk management

Events from the past decade have changed the way organisations think about risk. As a result, companies around the globe have made substantial investments in personnel, processes and technology to help mitigate and control business risk. But questions remain as to whether these investments will prevent the next catastrophic event; whether companies are getting a return on their investment; and whether they are focusing on the risks that matter, says Ernst & Young.

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usuf Dukander, project director of financial services at the South African Institute of Chartered Accountants (SAICA), believes that the risk management and governance landscape will see an evolution towards better quality oversight by management and

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supervisory practices, embedded in many organisations across diverse industries. He says that there has been a worldwide calling for businesses to have more supervisory authority.

Ernst & Young’s assurance leader for Africa, Lance Tomlinson, says effectively managing risk can enhance a company’s performance,

stating that companies with more mature risk management practices outperform their peers financially. “We found that companies with the most mature or sophisticated risk management practices generated the highest growth in a number of financial ratios. This includes revenue, earnings before interest,

taxes, depreciation and amortisation (EBITDA), EBITDA to economic value and return on invested capital. The study reveals that sophisticated risk management creates value, mitigates risk and optimises cost.

Effective risk management (ERM) might be viewed by many business owners as a standalone governance compliance. However, it should rather be seen as an integral part of an organisation’s strategy. Companies that effectively embed risk management practices into planning and performance management are more likely to achieve strategic and operational objectives, enhance business performance and drive financial results.

Tomlinson advises that organisations need to effectively assess risks across the business and drive accountability and ownership. “It is critical for management to demonstrate the organisation’s strength of risk management to investors, business analysts and regulators.”

Dukander adds that the concept of risk governance can be viewed as balancing the needs of all stakeholders with the associated risks inherent in the business.

It also prompts management to adopt a culture of more risk reporting in an effort to drive profitability and the sustainability of an organisation well into the future. The Ernst & Young survey, which assessed 137

global institutional investors, reveals that 82 per cent of respondents were willing to pay a premium for companies that demonstrate successful risk management. Meanwhile, 61 per cent will not invest where there is evidence of poor risk management and 41 per cent would withdraw investment where there is a perceived lack of appropriate risk management.

Tomlinson says that for companies to derive financial value from ERM, they need to identify and understand the risks that matter.

It is equally important for organisations to differentially invest in risks that are mission critical to the company.

“It is critical for management to demonstrate the organisation’s strength of risk management to investors, business analysts and regulators.”

Dukander proclaims that fear is possibly one of the major driving forces behind the accelerated investment in governance, risk management and compliance (GRC).

“Today, companies operate in a more volatile risk environment than ever before.

They face increased demands for more timely and insightful information from stakeholders who will not tolerate risk management failure.”

In a survey among companies across Europe, the Middle East, India and Africa, Ernst & Young found that nearly 70 per cent of organisations are highly reliant on their GRC activities as a safeguard against failure.

Interestingly, this spending and dependency is not matched by the value that business leaders think they currently get from GRC. Over two-thirds of all respondents indicated that more work was needed to enhance their GRC functions.

External stakeholders are more dissatisfied with the quality of GRC than companies’ own operational management and business leaders, with 79 per cent of respondents stating that they believe companies’ GRC functions need to be enhanced. “The practice of ERM is developing locally with the Financial Services Board and the Reserve Bank moving in this direction. The financial services sector has seen ERM form part of regulations, such as Basel III and Solvency Assessment and Management,” says Dukander. He adds that the principles of GRC and ERM are critical to any business whether it operates locally or internationally.

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Medical

records AT RISK Allem Kerr, a 25-year-old British woman born in South Africa, has no identity, no job, can’t marry, travel or even drive a car due to the negligence of a local hospital that lost her birth certificate.

With no official record of her existence, Kerr’s life is severely impacted. Her case serves as a bitter reminder of the importance of effective record management for our local healthcare sector.

Anton Pretorius

The curious case of the Kerr identity Suffering from a severe case of identity crisis, Allem Kerr from Balloch, Dunbartonshire in Scotland is enraged after a hospital in South Africa lost her birth certificate 13 years ago.

Kerr has lived in Scotland since her British family emigrated from South Africa when she was four years old.

Several attempts from Kerr to register her existence have been in vain, as home officials and the consulate of South Africa have told her that there is no official record of her birth. After trying to contact the hospital where she was born, Kerr found that it had been shut down, and the records moved or lost, the Mail Online, a division of the UK’s Daily Mail reported in September this year.

This agonising ordeal means that Kerr, who wants to study nursing, is unable to attend university, go on holiday abroad, apply for a driver’s licence or even marry her long-term boyfriend Joel Healy (26). An attempt to apply for neutralisation was refused because Kerr is not considered an immigrant. “I have basically

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been told I do not exist. I have cried so many times over this. I just want to live a normal life. I have been in talks with the passport office from the word go and they have told me there is no point applying because legally, I do not exist,” Kerr told the Mail Online.

Record-bungling repercussions Kerr’s case is a prime example of medical record mismanagement, causing a multitude of risk for both the institution and its patients.

Metrofile Records Management is a group company of JSE-listed Metrofile Holdings Limited managing over 21 billion records on behalf of its customers. Metrofile’s managing director, Guy Kimble, says that medical record mismanagement ultimately shows poor practice, instigating reputational, financial and legal consequences for the medical institution.

Even though Kerr’s situation is dire, some cases of medical record mismanagement can be the difference between life and death. When a patient is in a critical condition and requires immediate medical treatment, instantaneous retrieval of medical records is vital. “Medical

record mismanagement can result in delays in delivering the necessary medical treatment, as well as the incorrect diagnosis,” says Kimble.

features that at the time of implementation can cause great confusion and lead to a disappointing or failed roll-out of the solution.”

There are legal requirements pertaining to the safekeeping of patient records, typically based on age and the procedure that was undertaken. The importance of safeguarding all information about a patient may seem obvious. However, as in many areas of life, it is only when called upon to produce the relevant information regarding a legal issue that we find ourselves wanting.

Kimble adds that if a detailed needs analysis is conducted, with an aim to mitigate the risk associated with records management, “it will more often than not reveal that most risks arise from the manner in which patient files are opened, controlled and archived.” As with all things electronic, ERM systems present their own risks, like hackers gaining access to confidential patient records. However, Kimble believes that South African hospitals are more than capable of managing the threats of breaches into their computer systems, and many have the necessary firewalls and other means of protecting their computer environments.

Kimble says that untraceable patient information due to medical records mismanagement makes it difficult to defend clinical negligence, disciplinary inquiries, malpractice cases and debtor obligations.

“Other than the legal consequences there are real compromises in terms of responsible service delivery, which by law, doctors and medical institutions are mandated to provide,” he says.

Last year, SAPA reported that medical malpractice and hospital negligence cost the city of Johannesburg R573 million. “Although the costs associated with medical malpractice are well known, the damage to the hospital’s name is far more significant in the long term. A sound record management programme will go a long way to mitigating the risk,” says Kimble.

To maintain ERM systems effectively requires adequate staff training. While this could prove costly, outsourcing such a function might be even more expensive. Kimble says operating and successfully administering the system will not be onerous. “In our experience, training staff in effectively using our system takes no longer than a few hours as the solution follows the process typically used in hospitals,” he explains. “The system administration is typically undertaken by an organisation like ourselves at the initiation of the project and then handed over to the persons responsible for the IT infrastructure at the hospital.”

ERM is viable in the long run

Keeping it simple

The majority of local healthcare providers in South Africa utilise paper-based records, which pose a host of challenges that not only affect the primary function of patient care, but also the providers’ ability to manage their businesses efficiently.

The question remains whether government is seriously considering implementing ERM systems in government hospitals. “Yes I think they are, but they get caught up in thinking that their needs are for the very expensive total ERM solution that eliminates all physical records, instead of looking at the environment and keeping it simple while still effectively managing the various aspects of their records management needs,” says Kimble.

Medical institutions currently have a choice between electronic records management (ERM), traditional paper-based records management and a system that is a hybrid of both. “International trends reveal a move towards ERM, which is arguably more secure, reliable and readily available, but does require an initial financial outlay and a sophisticated systems infrastructure,” Kimble says.

In our current healthcare environment, some feel that more fundamental problems, such as a lack of beds and basic medication should have financial priority over an ERM system.

But Kimble disagrees. “More often than not, the costs of a single malpractice claim lodged against the hospital, where the hospital is unable to present evidence of the case at hand, ends up costing more than the ERM solution itself.” He believes that ERM solutions are a viable option in our healthcare system.

“It comes down to what is ‘fit for purpose’.

Many ERM solutions are overblown with

“The private sector often falls into the same trap, thinking that any move into an ERM solution must be an all-or-nothing approach.

This is often where it all comes apart and users of the system become disengaged and the implementation of the ERM solution is seen as a failure,” he adds. If the requirement of effective records management is looked into in detail, it is often found that the needs are fairly simple and therefore the costs are considerably lower than expected.

At any rate, in order to avoid cases such as Allem Kerr’s ordeal, it is vital for our local healthcare industry to understand the risks relating to the mismanagement of records. Knowing your risks allows you to plan for their mitigation. A strong records management regime should be one of any hospital’s primary risk-mitigation

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safe

better business t r e n ds | t o o l s | t e c h n o l o g y

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Call centres to stay or go?

TCF has significant implications for insurers that use call centres to market and sell their products.

We find out what some of these are and whether TCF is a realistic framework in the South African context.

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A Binder Regulations refresh

With the cut-off deadline for the implementation of the Binder Regulations looming, we’ve put together a quick overview of exactly what this regulation entails.

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Call centres

to stay or go?

Hanna Barry

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Call centres and the agents who fill them are a fundamental element of many sectors of the South African economy, insurance not least among them. But will these modern-day icons survive under the Treating Customers Fairly regime?

ou know the drill. The phone rings and is answered on the other end by an automated response that prompts your next move. After one or two (sometimes several) prompts requesting an action on your part (such as, ‘dial 3 for claims handling’) you may eventually reach a living, breathing human being – if that was your initial intention and you dialled the right number, of course.

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Dan Berglund, certified financial planner and TCF workgroup chairperson at the Financial Planning Institute (FPI), thinks that call centres undoubtedly transgress TCF outcomes. “Call centres are not distinctive on the fair treatment of customers the way they currently operate.

However, the more relevant question is whether they are providing sufficient advice,” he notes.

“When direct insurers call customers attempting to sell them a product, they don’t consider whether the customer actually needs the product and seldom enquire about what cover they already have.” Even though exemptions do exist for direct sales under FAIS legislation, in a direct model it is far more likely that consumers will buy products that are not commensurate with their needs. “The call-centre model will have to change substantially as a result of this legislation and I hope that there won’t be many exemptions granted,” he adds.

Rethinking product design and distribution One of the most significant changes that insurers using call centres may have to make, certainly direct insurers, will be in product design. Head of TCF at the Financial Services Board, Leanne Jackson, says that direct insurers arguably have a far greater responsibility to ensure that the product is appropriately designed for the target market and product features are clear.

“Insurers that market their products through telesales call centres should be particularly

careful to ensure that customers do indeed understand the information provided to them and the financial, disclosure and other obligations imposed on them, before concluding a telesale,” she says. “It is not good enough to simply end the call by asking the customer whether they understood the conversation; few people are likely to admit to a stranger that they feel confused and unsure.

If a customer has difficulty understanding a telephonic explanation, simply sending them the same information again in writing after the call will probably not help.”

TCF asks whether the product is appropriately targeted and delivers on the reasonable customer expectations that the firm created when the product was marketed to them.

Insurers need to consider the suitability of the distribution model they use, taking into account their identified target market when they design their products, including whether the product is an appropriate one to market on a no-advice basis. “Companies need to understand the markets they are selling into and whether the products are appropriate to these markets.

In some cases, certain features of a product will need to be reconsidered, but in other cases it might just be a case of communicating more clearly and appropriately on what the product does and doesn’t do,” explains Jackson.

This depends on a combination between the product features and the market to which it is targeted. “Financial services providers need to communicate with customers and manage their expectations. One of the big risks is that all the disclosure happens up front and then none takes place further down the line,” she adds.

The importance of clear communication raises the question of whether call centre agents will need to be able to converse in all 11 of South Africa’s official languages in order to ensure that any and every customer has understood the product. Although the FSB does not at this stage have any plans to prescribe the use or availability of specific languages in

which insurers must communicate with their customers, firms must nonetheless ensure that customers are provided with clear information and kept appropriately informed before, during and after the point of sale. “The insurer would need to satisfy itself that customers are able to understand the communications provided to them.

This in turn would mean that they would need to take into account their target market’s level of understanding of the language used by the insurer,” notes Jackson. “For example, it would be difficult for an insurer to justify limiting its communications to, say, English only, if it were operating in a target market that it knows has low levels of English language capability.”

By implication then, multi-lingual call centres across South Africa will need to be a reality.

But regardless of whether a product has been sufficiently explained and understood, outcome two of TCF stipulates that it must be designed to meet the needs of the customer group to which it is targeted. It’s unclear whether this will extend as far as a case-by-case basis, but if it does, call-centre agents will need to go some way to assessing the financial needs of the person on the receiving end of their sales pitch.

Beyond products Max Ebrahim, partner at Webber Wentzel, says that the crucial difference between the TCF policy and current legislation is precisely this. Most current legislation, such as the Policyholder Protection Rules and Consumer Protection Act, address the fair treatment of customers extensively. But under the basic rules for direct marketers in the PPR there are no clear requirements for a thorough needs analysis of a person. However, under TCF it can no longer be assumed that a generic product, such as a funeral policy, will be suitable for any person on the other end of the line.

“This requires a massive pre-sale shift as, in order to ensure the suitability of a product for 

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TCF has been adopted from the UK; a First World country. Our reality is different to theirs and it could be argued that we have more pressing challenges to focus on. The fact that the First World has been grappling with this principle only recently is telling. “The irony is that as sophisticated as the UK market is and has been for many years, it only started implementing TCF seven years ago,” remarks Ebrahim. “Despite having a sophisticated financial services industry, we are an 18-yearold country and have far bigger battles to fight.” You only need to watch the news to know that this is true.

the person on the other end of the phone, the agent needs to find out about the life of the individual that they are dealing with.

This requires full and frank discussion and the direct marketer would need to explain what all the relevant terms mean, too. They will then need to assess whether the product is suitable for the person before issuing the relevant documentation. Essentially, this is converting the broker’s role to that of the direct marketer,” says Ebrahim.

This would mean that call centre agents would need to be FAIS-compliant under TCF, which will be a massive cost burden for direct insurers where this is not already the case. And the net could be wider than they think. “Even where a call centre does not provide advice to customers (e.g. so-called execution-only models), if their activities can result in the sale of a financial product, they will in most cases still be rendering intermediary services for FAIS purposes, and thus still need to comply with all aspects of the FAIS Act other than those that relate specifically to giving advice,” explains Jackson.

In this sense, TCF speaks to product suppliers, as well as advisers. “Most regulation has targeted advisers, but now product suppliers will have to re-examine the information they distribute and ensure that it is completely understandable,” says Berglund. “This will undoubtedly lead to some standardisation of products and companies will be deterred from creating overly complex products to outwit their competitors.”

TCF will ensure that customers understand what they are buying and that as far as possible it is commensurate with their needs.

This is certainly in line with National Treasury’s policy document, ‘A safer financial services sector to serve South Africa better’, and is no doubt a principle that most insurers would agree to. Yet there have been grumblings from the industry.

In addition to countrywide challenges, insurers have a host of regulation to comply with, such as Solvency Assessment and Management (SAM) and binder regulations, not to mention employment equity targets and an unforgiving BEE Scorecard. In this light, it’s perhaps understandable why they are shrugging their shoulders and concerned only with compliance.

However, the flipside of this is that TCF can help create a sustainable financial services industry, in line with Treasury’s aims, thereby tackling some of the so-called bigger problems.

Reality check?

As an outcomes-based policy, TCF is aimed at encouraging corporate citizens to embed client-centricity in their culture, methodology and processes. In other words, it’s a question of culture rather than compliance.

In her presentation at this year’s Insurance Conference, Jackson was critical of insurers that think adopting the six outcomes is a compliance function only, as it does not illustrate that they are embedding it into every area of their business.

This speaks to the heart of TCF and that it should be self-driven, rather than driven by a regulator with a big stick. But is this realistic?

The TCF roadmap explains that delivery of the six TCF outcomes will in turn ensure the supply of appropriate financial products and services to customers and enhanced transparency and discipline in financial institutions, resulting in improved customer confidence. “The final desired outcome is that customers’ financial services needs are appropriately met through a sustainable industry,” says Jackson.

The FSB is clear that TCF will be explicitly included in the legislative and regulatory framework. This framework will further provide the FSB as market conduct regulator with the power to take enforcement action against firms that fail to deliver the TCF outcomes for their customers. Whatever your view, TCF is here to stay.

Better business for brokers If TCF sees the demise of call centres, will brokers be better off? John Bezuidenhout, public officer at brokerage JB Business, certainly thinks so. He says that call centres negatively impact on brokers and their ability to retain clients.

improve in the near future, as a flailing education system means that call centres are often staffed by unqualified personnel. “Call centre service is rotting and resulting in our clients not buying the products that they need.

Forcing customers to wait for extended periods, transferring their calls, misunderstanding their requests and failing to follow simple instructions without being hounded to do so, are only some of the ills that plague call centres. “Clients rely on brokers to perform and we cannot allow them to be exposed to such behaviour, as they will simply cancel their product. This leads to a decline in income for brokers, which is falling into a downward spiral as service levels continue to deteriorate and more onerous legislation means we have to spend time and money on compliance rather than servicing our clients,” he says. Bezuidenhout is not confident that the situation will

This means that insurers lose out, passing costs onto brokers, who then have to pass these costs onto their clients, making them even less likely to make the purchase,” he continues. As a result, businesses have to fork out money on systems that prevent their reliance on service models in order to curb a loss of clients and thus income.

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Since brokers are reliant on commission for income, Bezuidenhout says that they are hard-hit by these adjustments. He argues that call centres cost brokers time and money. Perhaps this will be alleviated under TCF, but only time will tell.

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A Binder Regulations refresh Hanna Barry

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he Financial Services Board (FSB) held a Binder Regulations Implementation Road Show in August and September in order to create awareness, understanding and consistent application of the Binder Regulations.

The regulations seek to ensure that insurers, intermediaries and UMAs conduct business in a fair and transparent way. Rules around remuneration safeguard against policyholders being charged twice for the same service, while responsible outsourcing is promoted and insurers are held accountable at all times.

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But before we get carried away with the spirit of the regulations, let’s begin with the basics.

The deadline for compliance with the Binder Regulations is fast approaching.

If you need to refresh your know-how, we’ve put together a cheat sheet to get you up to speed.

What is a binder function?

A binder holder performs functions as an agent of the insurer, as if the binder holder were the insurer when interacting with policyholders. This includes entering into, varying or renewing of a policy where the insurer becomes aware of the policy only after the fact. A binder holder can determine premiums, policy wordings and the value of policy benefits (such as a no claims bonus), as well as settle claims.

Who may be a binder holder?

Only underwriting management agencies (UMA), non-mandated intermediaries (NMI) and administrative financial services providers (FSP) are allowed to be binder holders. UMAs can perform binder functions on behalf of an insurer only, while administrative FSPs, in their binder holder capacity, may render intermediary services on instructions of a policyholder or another FSP, other than an administrative FSP. An NMI is defined as a representative or an independent intermediary, other than a mandated intermediary or an underwriting manager. NMIs can hold a binder with an insurer and be the agent of a policyholder for the provision of intermediary services. However, the potential conflict of interest that could exist here needs to be carefully managed by NMIs. Mandated intermediaries cannot be binder holders, as they represent policyholders only and are mandated by them to perform any act in relation to a policy, including termination, which legally binds the policyholder in writing.

A UMA that is a binder holder of one insurer cannot be a binder holder of another insurer in respect of the same class of policies, unless all insurers have agreed in writing. There is a further conflict of interest where a firm acts

as a UMA on behalf of insurance company A and an NMI on behalf of insurance company B. However, intermediaries can act in both a non-mandated and mandated capacity. For example, an NMI on commercial lines business may act as a mandated intermediary on personal lines business and vice versa, for the same insurer.

The associate problem In the event that an insurer is the holding company of an NMI and a UMA, the respective NMI and UMA cannot do business with each other. However, the insurer can apply for a special dispensation from the registrar and receive an exemption if the registrar is satisfied that no conflict of interest exists. But speaking at the Cape Town leg of the road show, the FSB said that it had not yet received a request for a special dispensation.

The limitation on associates extends to nonmandated intermediaries and mandated intermediaries. They may not conduct any business with each other as there is no insurer in that relationship, which means that an exemption is not possible. Under the Binder Regulations, UMAs remain prohibited from interacting directly with policyholders by, for example, selling a product or providing advice.

Binder agreements A binder agreement must be a separate written agreement that regulates binder arrangements only. Binder agreements may not prohibit an insurer from communicating directly with its policyholders or independent intermediaries, nor may it authorise another person to add any amount to the gross premium or deduct an amount from a claim, unless the regulations allow for it. Since a binder agreement is essentially an outsourcing arrangement, binder functions may not be further delegated, as this delegation has already taken place in the binder arrangement.

However, functions that do not fall under the definition of binder functions may be further outsourced. Directive 159, which deals with outsourcing, became effective on 12 April this year and insurers that outsource binder functions must comply with both the directive and the Binder Regulations.

There were some questions at the road show about whether the definition for intermediary services would be revisited, especially in light of the fact that there may be some overlap between this definition and the definition of a binder function. This becomes problematic ďƒ

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when trying to avoid charging policyholders twice for provision of the same service. The FSB expects to release a discussion paper on this before the end of the year, but intermediary services must be regulated in a separate agreement.

Remuneration Binder fees will not be capped or proscribed, but they must be activity based. In other words, reasonably commensurate with the actual costs to the binder holder associated with rendering the services under the binder agreement. The binder holder is to demonstrate consistency in its fee for providing the same activity and policies cannot be placed purely for the financial enrichment of the binder holder. The FSB noted at the road show that it will be conducting on-site visits with more rigour and monitoring the reporting on binder fees carefully.

A UMA can earn a profit share (share in the underwriting profits), a binder holder fee and an outsourcing fee. An NMI can earn a binder holder fee, a policy fee, commission and an outsourcing fee, but not a share of the profits.

It is vital that in all instances, policyholders are not charged twice for the provision of the same or similar service. This must be carefully checked in the case of an NMI performing binder functions on behalf of the insurer and intermediary services on behalf of the policyholder of that insurer.

Moving policies A policy can be moved only when it is in the best interest of a policyholder to move it and moving it complies with the Short-term and Long-term Insurance Acts, the Policyholder Protection Rules (PPR) and the Financial Advisory and Intermediary Services (FAIS) Act. In order to move a policy or a book, the policyholder must receive a written notification and be fully informed of the change of insurer, product and any cost changes. The intention to move a book must be disclosed to the regulator and cover must not be broken.

There are some concerns that policies or books may be moved in the interests of binder holders and to the prejudice of policyholders.

Inconsistent practices Speaking at the Cape Town road show, Lesedi Letwaba, head of the compliance department in the FSB’s insurance department, outlined some inconsistent practices that the regulator has noted with regard to the implementation of binder holder agreements. It has received reports from insurers that, due to fees not being capped, some binder holders view the

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"Binder agreements may not prohibit an insurer from communicating directly with its policyholders or independent intermediaries." regulations as an opportunity to renegotiate higher fees and play insurers off against each other.

This has led to insurers paying excessive fees in order to retain business. “The regulator does not want to have to cap binder fees, but these need to be commensurate with the activity being performed and this will be monitored,” says Letwaba. “The FSB implores insurers to ensure that the fees they are agreeing to are commensurate with the activities they have outsourced.”

While it is not always easy to determine whether or not a fee is commensurate with the service provided, it seems that some binder holders are seeking and receiving fees that are clearly not in line with the services they are rendering.

Unfortunately, policyholders may be prejudiced in such situations as policies are moved in pursuit of higher fees even when this is not in their best interests.

Implementation dates The Binder Regulations commenced on 1 January 2012. Any new agreements entered into after 1 January 2012 must comply immediately, while existing agreements have until 31 December 2012 to comply. The FSB has been clear that the transitional timeline will not be extended and that current practices should not simply continue until the cut-off for final compliance.

Further clarity needed?

During the question and answer session at the Cape Town workshop, a variety of concerns and some interesting questions were raised. In this light, we will be putting together a Binder Regulations guide early next year. If you have any questions that you would like answered regarding how the Binder Regulations might affect your business, please e-mail them to hanna@comms.co.za and we will put them to our panel of experts.

A case for the uma –

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t is estimated, firstly, that there are currently around 300 UMAs operating in the South African insurance industry, and secondly that about 20 per cent of the short-term market’s gross written premium (GWP), about R14.4 billion, is administered through these underwriting agencies.

Isaac Chindotana, portfolio manager at Lireas, the strategic investment company of Hannover Re Group Africa, says that while UMAs have been praised for many of the benefits they have brought to the insurance industry such as innovation and specialisation, they have received very little credit for another significant benefit that transcends the insurance industry, that of employment creation.

South Africa’s official unemployment rate was recorded as 24.9 per cent, according to official statistics released at the end of the second quarter of 2012. Chindotana says that to fully appreciate the part that UMAs play in creating employment, we should look at the number of people employed directly within the UMAs, as well as those employed

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Underwriting management agencies (UMA) were introduced into the South African insurance market in the late 1980s. Since then, hundreds of UMAs have been started while others have failed or been consolidated into larger businesses or into insurance companies as ‘product houses’.

in institutions and service providers who have symbiotic and downstream relationships with UMAs across the value chain. This would include brokers, risk carriers, reinsurers, external claims administration function providers and other suppliers of administrative facilities and functions such as accounting, compliance and IT. Chindotana says Lireas is considered a pioneer of the UMA concept in South Africa, having been involved in starting 41 UMAs. “The company is currently invested in 15 UMAs, at different stages of maturity and size, and employs more than 420 people in its group of UMAs as at the end of June 2012.”

He says that of the approximately 26 UMAs that Lireas played an instrumental part in starting but in whom it is no longer a

shareholder, some of these have grown to be among the biggest UMAs in the market, in some cases employing over 100 people.

“We estimate that in total Lireas has been a party to the creation of approximately 1 000 direct jobs over the 24 years that we have supported the UMA business. This impact on employment creation in the economy is much bigger if the downstream industry and value chain service providers were to be included in this analysis.”

“We believe that it’s imperative that UMAs, with their entrepreneurial flair and capacity to innovate, should continue to make a concerted and collective effort to play their part in creating employment in the insurance industry and continue to impart their expertise and skills to the young graduates coming through the pipeline,” he concludes.

New National Assurance Company (Pty) Ltd is an authorised financial services provider | FSP 2603 New National Assurance Company (Pty) Ltd is an authorised financial services provider | FSP 2603

Emerging brokers

are at a disadvantage

Traditionally positioned brokers tend to be more successful within the established and emerging markets than those who found their beginnings in developing communities. This is according to Khanda Mkhize, executive head of the broker channel for Liberty Emerging Consumer Markets.

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he effects of the lack of meaningful development in South Africa’s business environment are still acutely felt within the financial services industry, particularly with regard to the development of financial services providers for the domestic insurance market.

Although this trend can be attributed to a number of factors, the biggest challenge for emerging FSB-certified insurance brokers is access to resources. “Traditional insurance brokers are still more successful in the emerging and established markets than those who have come from more humble beginnings,” says Mkhize. “This is because the traditional broker typically has access to established sources of capital.

As an emerging broker, it is a challenge to secure the funding required to establish compliance-related assets, such as a functional office, a complement of staff and requisite computer networks.”

A lack of resources has seen many talented and proficient brokers within the emerging market claimed by larger firms. Although this kind of sustainable employment is a welcome

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engine of economic growth, it may not be healthy for the industry at large.

“Some of the best emerging market brokers in the business have gone to work for large established firms instead of setting up their own operations. While the availability of jobs within the financial industry may benefit the country in the long run, the reality is that very few smaller brokerages with a keen understanding of the culture and community associated with the emerging market have found success in recent years.”

Furthermore, Mkhize believes that the Regulatory Examinations, which every financial service provider is legally required to pass before becoming active within the insurance industry, are not geared towards the long-term needs of the industry. Central to this is the lack of category-based testing and language variation.

“Current financial service provider compliance requirements demand that prospective brokers pass a standardised examination, regardless of which category they plan to operate in. The nature of the testing and the language used immediately

places many candidates within the emerging market at a disadvantage,” comments Mkhize.

He says that in order to rectify this, the regulator should consider introducing categorised examinations in several national languages. Mkhize believes this would make it less challenging for previously disadvantaged candidates to find success. However, he adds that these individuals should be wary of blaming external factors for their lack of accomplishment.

Although entities such as Liberty and the Black Brokers Forum work tirelessly to encourage the growth of brokers within the emerging market, the reality is that there is no substitute for hard work. “When all is said and done, potential FSPs should realise that true success ultimately depends on them.

Emerging brokers should not simply blame external factors, but should also look inwards to truly measure their dedication to the craft.”

Liar liar: practising polygraph

testing

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he introduction of polygraph testing is splitting the country’s blue-chip employers. While the banking sector generally and firmly rejects the veracity of polygraph tests, employees within the insurance, FMCG (fastmoving consumer goods) and retail industries could soon find themselves wired up and their bodily responses scrutinised for traces of dishonesty.

say that polygraph testing is a good way of establishing whether employees share the company’s values and if they have integrity, especially when handling substantial amounts of money.

This is according to a new survey conducted by executive search firm Jack Hammer Executive Headhunters. Respondents from the banking sector came down hard against such tests and indicated that they rely on stringent recruitment procedures to ensure that only individuals with integrity are hired. Some feel that the tests are not an exact science and irrelevant to a white-collar environment, while stating a preference for hard evidence.

Debbie Goodman-Bhyat of Jack Hammer says that there is currently no legislation covering polygraph testing in South Africa, which could see some employees on the back foot in a crisis. However, both the Commission for Conciliation, Mediation and Arbitration (CCMA) and the courts of law will only consider polygraph evidence in conjunction with other evidence. “No employee can be compelled to take a polygraph test and failing one is not an automatic indication of guilt. Employees who find themselves in a situation where they may have to take a test must give their consent in writing,” she says.

However, those who are pro-polygraph point out that the lie detector test is a weapon in a company’s arsenal if an employee is accused of a serious offence. A respondent from the retail sector says that they subject employees to polygraph tests and simultaneous lifestyle audits, in the case of financial mismanagement charges. Others

According to polygraph best practices, HR managers and employees should abide by certain guidelines, for the protection of all parties. Goodman-Bhyat says that HR managers must inform individuals that the examination is voluntary and that only issues discussed prior to the test will be examined.

“An examiner investigating a fraud charge

can’t spring a surprise question about an unrelated suspected crime on the employee.

In addition, employees have the right to another party present, providing that person does not interfere with the investigation,” she explains.

Ideally, sectors should screen potential employees more stringently, rather than hope for the best and have to do damage control or resort to measures such as lie-detector tests.

“An in-depth recruitment process should help weed out untrustworthy individuals who are likely to go against the prevailing corporate culture and commit acts such as theft, fraud, habitual dishonesty or narcotics abuse, causing a negative impact on the company and their own job performance,” notes Goodman-Bhyat.

“The old saying, prevention is better than cure, rings true. Once the crime has been committed, you cannot go back and undo it,” she continues. “A polygraph test may help you uncover the guilty party in a crisis but the possible damage to your corporate reputation and staff morale has already been incurred. It is surely better to hire exemplary employees and minimise the chances of crime than to lock the stable door after the horse has bolted.”

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Karen Miller Executive: underwriting at Mutual & Federal

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n the introductory article we mentioned that utilising a balanced scorecard (Kaplan and Norton, Harvard Business School Press, Boston Massachusetts, 1996) approach to establish and monitor key metrics in a short-term insurance company facilitates the balance between medium to long-term strategic goals and provides lead and lag indicators of the organisational performance.

The balanced scorecard defines four key areas of measurement as: financial, customer, internal (process) and growth/learning.

Balanced scorecard

growth and learning Typically in short-term insurance companies, we measure the following in the growth and learning category of the balanced scorecard:

Aspects to measure

Employee measures: Growth and learning metrics

This article is concerned with growth and learning aspects of the balanced scorecard.

We have already covered financial, customer and process categories in previous articles.

The growth and learning aspect of the balanced scorecard is concerned with investment into process, people, systems and research and development (product and service). Thus this category focuses on building capacity for long-term performance by improving the following: • Employee skills and capabilities.

• IT systems, facilitating delivery and enablement.

• Organisational culture which empowers and aligns employees with the organisations goals.

Employees are required to continuously improve processes in order to ensure continued organisational performance. Employees require appropriate skills and attitude to benefit clients and channels through improved and informed service delivery. Organisations and employees need to commit to skills development and training, in order to ensure adequate skills levels across the organisation.

In South Africa, we currently face a skills shortage in short-term insurance and a deliberate focus on growth and learning

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Examples of metrics

Employee measures:

Employee satisfaction Employee productivity Employee retention Employee skills levels Training levels Skills leverage

Productivity tracking Attrition rates per talent grid assessment Training log Skills audit Retention/attrition rates

Technology infrastructure:

Technology infrastructure:

Technology systems facilitating strategic implementation Databases Knowledge management Patents, copyrights, proprietary software

Audit of technology enablers Knowledge management systems New innovation – products/service/ systems

Culture:

Culture:

Key decision-making framework Culture survey Strategic focus Successful suggestions and benefits derived Empowerment Alignments Alignment of individual scorecards to the company goals Motivation levels

Dependent on

Leadership Structure and remuneration Strategic framework Strategic infrastructure and capabilities Planning cycle (key decisions)

facilitates broad-based skills improvement for our industry which will ultimately benefit our customers.

Innovation is at the heart of successful product development, and in the shortterm insurance industry innovation provides the means to deliver improved product propositions and execute superior client service through innovative process and systems. In the growth and learning category of the balanced scorecard, we wish to measure product innovation, process and/or system improvement due to innovation and skills. It is somewhat challenging to measure innovation accurately and objectively, but companies are able to create scales which measure this relative to existing and future products. Companies can also utilise a relatively objective scale to benchmark against competitor products to assess levels of innovation in their own product and service offerings. Companies that encourage growth and learning can increase their organisational intellectual capital.

Technology enables product and service delivery in this information age. Accordingly, IT enablement is seen as an important aspect

of the growth and learning aspect of the balanced scorecard. It facilitates product provision, service delivery and enables administration across underwriting, claims and accounting functions. IT also facilitates integration of data and systems across the insurance value chain. These benefit clients through lower administration costs and improved service provision. Information technology enables prudent underwriting and risk management through facilitation of appropriate risk selection, risk-based pricing and exposure management (aggregation and single risk volatility).

An important aspect of growth and learning is the organisational culture and its ability to facilitate alignment between organisational goals and the employee contribution.

Employees who feel that they contribute to the organisational success are motivated, engaged and committed to the organisation, creating a virtuous cycle. A strategic framework which facilitates efficient planning and execution of agreed organisational goals facilitates successful implementation of strategy in an integrated manner. It is important to measure culture to ensure that it supports the strategic imperatives. It is important to note that culture

is an important enabler of an innovation capability. Where innovation is measured and valued, it will become embedded in the organisational culture.

Thus the growth and learning aspect of the balanced scorecard is concerned with skills, culture, innovation and systems enablement.

All of this enables the implementation of the organisational strategy in an integrated and aligned manner, and ensures the embedding of culturally appropriate behaviours.

“A strategic framework which facilitates efficient planning and execution of agreed organisational goals facilitates successful implementation of strategy in an integrated manner.�

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Analyse your clients to

unlock profits Ian Middleton | Managing director of Masthead

Knowing who your clients are is vital for an independent financial advice business. Not only will this help you comply with legal requirements, but it can potentially improve the efficiency, profitability and value of your practice. art of the FAIS legislation requires that you know your clients and contact them at least annually.

Advisers who have been in the industry for several years and are receiving commission from clients whom they have not seen for a while should identify those clients and put in place a structured plan to contact them. This will reduce the risk of those clients laying an official complaint against that adviser’s business with the ombud’s office, while renewed contact may result in new business.

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Identifying your clients and the products they purchase often indicates opportunities to grow your business. It reveals your success in attracting the type of client you are targeting; the profitability of those clients; which clients can become ‘high value’; with which specific ‘dormant’ clients to re-engage; with which clients to disengage; which clients are most likely to produce high value client referrals; and other types of clients who may benefit

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from your offering. You should also be able to identify which of your clients add greater value to your business than the rest. Your investment of time and money in client relationships should relate to the value of your client relationships, so it makes sense to know on whom to spend more time and resources.

this economic climate, however, it will be a big mistake to guess what your clients can afford.

Also keep in mind which marketing initiatives were successful in acquiring the clients in your target market and which cross-selling initiatives led to the most market penetration, as this may inform your future plans.

These findings will enable you to make more informed decisions about your client proposition, as they are based on known client needs, and you’ll be able to focus your time, energy and marketing budget on attracting the highest value clients. This puts you in a good position to develop a sound strategy for both the short and long term.

By knowing who your clients are and understanding the various market groups’ perceptions and behaviour, you can follow a differentiated approach and more accurately target your marketing, education and communications.

There are several good electronic client relationship management systems that will help you analyse your database. The best one for your business depends entirely on your type of business and what you seek to achieve. The first step is to use a CRM system to segment your clients in various categories, such as age, education, occupation, dependants, income and the number of financial products they own. The value of your analysis largely depends on the information in your database, so the more comprehensive your records, the deeper your analysis can be.

Your results may confirm trends but also provide warning signs. If, for instance, your database comprises mostly ageing clients, it may be time to shift your target to a younger group of clients to ensure the sustainability of your business.

One way of doing this is to start engaging with the children of your older clients.

When analysing your data, beware of making assumptions. For instance, product affordability may be an issue to some clients in

Before implementing new initiatives based on your database findings, take care to ensure your staff members can manage the inflow of potential new business without dropping service standards to current clients. The new income and the costs of acquiring it should be measured to identify the success and profitability of your initiatives.

Masthead encourages its members to use the full potential of their client bases and provides advice on CRM systems and client data analysis. Masthead consultants can also recommend what members could do with the results and ensure members’ marketing strategies meet the strategic objectives of their business. We also help train support staff, which is essential for the success of data input and analyses.

To unlock potential business or service offerings that will help you build a greater mutually beneficial relationship with your existing clients, please contact your nearest Masthead regional consultant or visit www.masthead.co.za.

BEWARE of NEMA’s hidden penalties usinesses may be shocked to find out that the compliance duties of the National Environmental Management Act (NEMA) are not restricted to industrial companies, according to the Compliance Institute of Southern Africa.

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Every business should have a working knowledge of the Schedule 3 penalties in NEMA in addition to any other acts that apply to that company, such as the Waste Act. Section 34 of NEMA covers criminal proceedings and states that anyone convicted of an offence in terms of any provision listed in Schedule 3 is, in addition to other penalties, liable to meet the cost of rehabilitating, or preventing damage, to the environment. “In terms of the act, private citizens, employers, directors, managers, agents and employees can all potentially be held liable of an environmental offence either through a direct action, or due to inaction on their part,” says Julie Methven, CEO of the Institute.

In a nutshell, companies and individuals have to ensure their waste is treated and disposed of in an environmentally sound manner; is managed so as not to endanger people’s health or the environment; and is not used for an unauthorised purpose. There are exceptions, notably those relating to waste generated by normal household activities or waste disposals done to protect human life or as a result of an emergency.

Schedule 3 also lays down specifics for littering. For example, no individual or company can litter in any public place, land, vacant erf, stream, watercourse, street or road, except in a container specifically provided for that purpose.

A good business practice for every person considering an environmental requirement is to immediately consider Schedule 3 of NEMA, to ensure they have a more complete picture of the actual risk involved in not complying.

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The legalities of receiving a

gift

A growing legislative trend towards good governance and anti-corruption has resulted in broad, far-reaching legislation both locally, in Europe and the United States, which requires that both companies and employees should be aware of the potential pitfalls of accepting a gift.

Matthew Clark is an associate and Marelise van der Westhuizen is a director at Norton Rose SA.

ll successful businesses are required to build sound relationships with their suppliers and customers and to have a detailed knowledge of their respective offerings and requirements. In developing and maintaining these relationships, it is generally considered acceptable for gifts or entertainment to be provided to, or accepted from, the customer or supplier.

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The best way to know and understand a customer or supplier is often over a round of golf, a shared beer in the box at the rugby or jammed in a shuttle or taxi next to one another on the way to watch Bafana. But you should tread carefully, because when these gifts are offered in order to induce some sort of benefit, you might find yourself guilty of the offence of corruption by accepting the gift.

The Prevention and Combating of Corrupt Activities Act, 2004 contains a wide definition of the offence of corruption. According to section 3 of the act, any person who accepts, agrees or offers to accept any gratification

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(including a gift or entertainment) for the benefit of himself, herself, or another person in order to act personally or by influencing another person to act, in a manner that is designed to achieve an unjustified result, is guilty of the offence of corruption.

Next time you consider taking up a client on their offer to accompany them to watch the cricket in the summer sun, consider whether you will be expected to act in a manner designed to achieve an unjustified result.

It is not only South African legislation which poses a risk to South Africans and South African companies. The United Kingdom Bribery Act, 2010 is another far-reaching piece of legislation and it has some extra-territorial application. Section 2 of the UK Bribery Act defines four offences which relate to bribery.

One such offence is where a person agrees to receive or accepts a financial or other advantage intending that, in consequence, a relevant function or activity should be

performed improperly. Business hospitality that is reasonable and proportionate and seeks only to develop business relationships or promote a company’s products or services will fall outside of the scope of the UK Bribery Act. Section 12 of the UK Bribery Act allows for proceedings to take place in the United Kingdom in relation to an offence such as the one described above, even where the acts or omissions which constitute the offence occur outside of the United Kingdom, if there is a close connection to the person committing the offence.

In the face of growing and more-wide ranging legislative oversight, companies are encouraged to insist at all times on absolute best practice when being entertained by or building relationships with clients and suppliers.

All companies should have a detailed corporate gift and entertainment policy which ensures that employees are well aware of the potential risk that a bottle of whisky or tickets to a concert might present.

Eureka!

Or same again, please?

Esmé Davies, head of Celestis Practice Management

Danny Warshay, managing director at DEW Ventures, says, “You increase your chances of success when you use a well-defined methodology rather than pulling an idea out of the air and running with it.” DEW Ventures coaches and invests in startups, so you could say that they put their money where their mouth is. But same again could also mean making the same mistakes, so what’s the answer?

What worked? e’re creatures of habit and, as nature would have it, now is the time we start thinking about what next year will bring. If it’s been a tough year and 2012 has provided many of us with challenges, we’re adamant that next year will be better. What we need is just one idea that will change the world.

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Or do we? As is our habit, we’re inclined to associate a new year with new beginnings, new ideas, new markets, new products and just about anything else that’s new; because new means different and the grass is greener on the other side. But be warned, unless we’re going to adopt a new diet, we don’t eat grass.

Habits are only beneficial if they’re good habits.

The first step is to habitualise our successes. Take a look at your high points over the past year and there’s a good chance that you will detect a pattern. Most things that have worked in the past work again.

Reinventing the wheel is seldom an option. In your plans for next year, make sure that the things that worked feature prominently in your To Do list.

Review and reconnect As financial advisers, our business is really about relationship management. Trust and confidence doesn’t just happen. It evolves over time.

And these are precisely the reasons why our clients continue to do business with us. They

trust our judgement and have confidence in the solutions we present. A new client still has to experience and find out what they already know about us.

Make client reviews a feature of your business plans for next year. If you have 300 clients, you should have at least three client review meetings scheduled in every working week of your diary for next year.

Clone clients If only you could clone your top 10 clients.

You can. Most advisers, if they’re prepared to admit it, hate prospecting for new clients.

Asking for referrals is not the most comfortable part of being an adviser. Inviting a client to join you for breakfast, on the other hand, is probably the easiest thing you’ve done all year.

It’s natural for people to associate with others similar to themselves. Invite a client to breakfast and ask them to bring a friend or associate and the chances are high that the guest will be very similar to your client. Use the occasion to network, not to sell, and you will most likely be able to repeat the event and meet a host of your client’s clones over time.

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(011) 678-0807 kirstenh@emps.co.za Visit www.emps.co.za

Profiling to guide the

Kirsten Halcrow Managing director: EMPS (PTY) LTD

job interview provides a valuable opportunity for you and the candidate to learn more about each other. Learning about your candidates will enable you to predict how each candidate might perform in the specific position to be filled. You can get the most from the interview by carefully planning in advance what you want to learn from your candidate.

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In an ongoing effort to provide the best solutions for companies to choose the most suitable candidate for the job, EMPS has come across a wonderful profiling tool called the Personality Interview Profiler, otherwise known as the PIP. This online test is done by potential shortlisted candidates prior to their interviews.

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interview process It is a quick and cost-effective way to uncover candidates’ behaviours in terms of the following behaviours: • Assertiveness • Drive • Extraversion • Confidence • Social sensitivity • Caring • Structure • Openness to change The profiler provides insight into a candidate’s work behaviours that will have an impact on their effectiveness within a given organisational culture and/or position.

The PIP is a great aid for interviewing, as it gives a brief summary of the person’s behaviour as well as recommended interview questions to assist you in probing the candidate’s attributes. There is also a summary of the types of work environments that the candidate is likely to be most suited to and happy in. This is able to assist you in making sure that the best fit is made from both a candidate and organisational perspective.

Very often we leave assessment and profiling to the end of the recruitment process; knowing what kind of person you are speaking to during the interview process can add a lot of value and guide you to derive the best outcome.

Tackling Twitter Cheridan Inglis is managing partner at touch, a digital relationship agency

“Addicted to Twitter,” a well-known chief executive recently confessed to me while we were boarding a plane. I was impressed, but not surprised. Where else can you proactively choose the news, information and entertainment you want to see, as it unfolds?

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witter is a social media platform that is based on micro blogging, which enables users to share textbased information of up to 140 characters at a time, known as tweets. It also allows the uploading and sharing of images and videos. Twitter was created in 2006 and it has over 500 million active users globally, generating over 340 million tweets daily. It is one of the top 10 most visited websites today.

The total number of registered South African Twitter users is over 1.1 million, growing daily. Active users are about 40 per cent of that. Thirty-three per cent are between 25 and 34 years of age, with 53 per cent female and 47 per cent male. Over 520 000 tweets are generated a month and this number is increasing rapidly.*

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• M ake sure your Twitter presence is in keeping with your marketing strategy and brand positioning. Choose a

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handle (Twitter name) that is clear. Add appropriate company information, descriptions and branding to your Twitter account profile. Make it easy to be found by including key phrases relevant to your offering.

Start following other people and companies that you would like to be associated with. Twitter offers a ‘who to follow’ tab for suggestions based on the activity around your account.

Invite your existing database to follow you on Twitter and even incentivise them if suitable.

Add your Twitter handle or a ‘follow’ button to all your external communication, including e-mails, websites, other social media sites and television ads.

Include exclusive content on Twitter. Don’t share the same information across all your social media tools.

Consider advertising on Twitter with its sponsored and promoted links, which will assist with targeting relevant users and encouraging them to follow you.

Investigate who has online influence that is relevant to your industry and follow and engage with them. You can use Klout. com to see who has online clout.

List your Twitter account on all

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credible online directories and include your Twitter link in your online paid search advertising.

Identify key Twitter partners and retweet and @reply to build an ongoing dialogue, which will be noticed by their followers. When sending an @reply, only you, the person you are replying to and your mutual followers will see it. However, if you want all of your followers to see it, add a full stop in front (.@reply).

Most of your tweets should include the @ mention to help people notice you. If you don’t include it, it is a missed opportunity.

See what is trending on Twitter and choose a topic to tweet, but make sure it is relevant to your brand.

Keep monitoring and analysing the reaction to your posts and tweets, as well as measure how your followers are growing or declining and adjust your content accordingly.

Twitter is about sharing breaking news and information. Use that to your advantage and offer relevant content, first. www.touchdigital.co.za • @CheridanInglis *Source: SocialBakers.com & Edison

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How to survive

the goldfish bowl of business meetings

Georgina Hatch New You Image Consulting

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n international study by US-based Manchester Partners International found that 40 per cent of new managers fail in their first jobs.

The key reason for this is their inability to build good relationships with peers and subordinates. In other words, they were unable to recognise the importance of business etiquette or to follow the rules.

Business etiquette is all about the impression we make on other people. We may be highly skilled and professionally competent, but if we don’t know how to behave in the work environment, it will all be for naught.

As with so many areas of life, it is essential to be on our best behaviour when we are at work. Our relationship with our co-workers, sponsors, supervisors and clients can make or break our career.

Take business meetings, for example. We may occasionally regard these as an unnecessary evil. As one humourist described it, “A meeting is an event where the minutes are kept and the hours are lost.” But in many companies, they are a regular occurrence and they are a minefield of business etiquette rules.

The next time you are in a meeting, take a minute to observe your fellow attendees.

Someone will be slumped at the table half asleep; another will be doodling on their notepad; a really daring chap will be secretly texting his wife to find out what’s for dinner. Is anyone actually leaning forward with interest, clearly paying attention to the proceedings?

Compare your findings with the individual’s career success to date. Something tells me that you might detect a pattern.

Business meetings are like goldfish bowls where you are on view for all to see and where you are judged not only by your superiors, but also your peers. Reputations can be built or demolished based on how well a person conducts themselves during a meeting. Be poised and professional at all times by following a few simple rules of business etiquette.

If you are the person calling the meeting: • E nsure that everyone is well prepared by communicating to them the objective of the meeting, the expected duration and the items expected to be discussed.

• Decide on the seating beforehand.

• Stick to the agenda and make sure everyone has a copy.

• Thank people for attending.

• Allow people to meaningfully contribute to the proceedings.

• Keep eye contact 80 to 90 per cent of the time.

• Set a time limit for the meeting and stick to it.

• Prepare and distribute minutes timeously (within one working week).

If you are the person attending the meeting: • B e fully prepared. Go over the agenda beforehand to ensure you know what to expect.

• A rrive on time – punctuality is a key element of correct business etiquette.

• Bring all necessary materials with you.

• Keep your briefcase on the floor, leave your mobile phone behind and don’t irritate others by playing with your pen or paperclips.

• Be aware of your body language and remember SOFA – Smile, Open Approach, Lean Forward and Applaud.

There is no need to schmooze, simply use positive input and language and give credit and praise where it’s due.

• Don’t interrupt others when they are speaking.

• Be an active participant – listen carefully to others and when you are speaking, make sure you have something relevant to contribute.

• Thank the chairperson for organising the meeting. This is an important gesture of respect.

• Be accountable and timeously follow up on any action points allocated to you and be ready to report back at the next meeting (unless otherwise indicated).

As professional people, we flout the rules of business etiquette at our peril. In the case of business meetings, it’s better to be a guppy than a piranha. www.newimageconsulting.co.za

New You Image Consulting is based in Cape Town. Formerly an award-winning journalist, owner Georgina Hatch is a public speaker and runs workshops and seminars on personal branding and corporate image, style and presentation. She offers personal and professional one-one-one image consultations. Georgina trained as an image consultant with the renowned Colourworks International and is affiliated to the South African Image and Style Academy. She is a member of the Professional Speakers Association of Southern Africa and the author of the book, Change your Image, Revamp your Life.

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Public speaking PROMOTES YOUR PERSONAL BRAND

“Only the prepared speaker deserves to be confident.”

Dale Carnegie, writer and lecturer

or some the thought of speaking in public is equivalent to suicide.

It is reputed to be the third most common fear, after death and spiders. It is an essential skill that will pay dividends if you are keen to elevate your profile. It is advisable to prepare yourself adequately, and practise not until you get it right, but until you cannot get it wrong.

There is a definite connection between being able to present and speak in public, and a personal brand that offers added value.

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Public speaking is a vital talent that we assume those in positions of authority or in the public eye, automatically have. Take for example the professional sportsperson; just because he or she can win the Comrades or play outstanding Super 15 rugby, does not imply that they can stand up and speak in public. Those who can, somehow, are often the sportspeople who get more lucrative sponsorship contracts, because they offer better value to a sponsor. Heads of companies are automatically expected to be able to stand in front of their staff and give the good or bad news.

The trick lies in getting ready for your moments of fame well in advance. Every CEO is expected to say a few words or make a comment for the media. Can you? Good public speaking and presentation skills are needed for an audience that ranges from one to 100 and beyond. Start practising with an audience of one. Standing up in a boardroom and outlining your strategy or presenting a PowerPoint presentation to your colleagues, may give you adequate practice. Being asked what you do for a living at a dinner table with just six or eight guests is also good practice. Like everything in life, start with small steps. It is not who talks, but who listens so make it worthwhile for your audience.

Preparation for public speaking • Know your audience, and let them get to know you; create a rapport.

• Make it an unforgettable experience that makes you a talked-about brand.

• Start and end with something powerful and significant using rich words.

• Ensure take-home value; provide a worthwhile message that resonates with your audience.

• Let your message strike a chord and ensure that they believe in the messenger.

• Visuals and music will assist you in creating a moving performance.

• Add life to your presentation with personal anecdotes.

• Sparkle and smile.

• An audience seldom has an attention span of more than 45 minutes, so change the pace and keep it interesting, have a good flow.

• Ensure that there is impact in terms of your dress, the quality of your voice and your use of space. Own that space – move around, within reason, and be relaxed. Posture, stance and gestures are part of your show.

Enjoy them.

• Decide whether you are expected to inform or entertain and present accordingly.

speeches. Once you are a specialist you are unlikely to be asked to speak on very general subjects, so you do have a wealth of knowledge waiting in the wings. Agreeing to say a few words at short notice is a great asset to your brand, especially if you make it look effortless and relaxed.

Jenny Handley is a brand specialist and owner of a brand and performance management company. A member of the London Speaker Bureau, Jenny has addressed a wide variety of international audiences. She offers unique individual brand management consultations for top executives, leaders and entrepreneurs, based on her book Raise your Profile. Jenny facilitates brand and performance management, leadership development and communication workshops, with a focus on social media strategies. She has her own weekly column in the Cape Times. Visit www. jennyhandley.co.za for details.

Most importantly, enjoy the interaction and your audience shall enjoy it with you.

Once you are an accomplished or enthusiastic public speaker, you may well be called upon to present an impromptu speech.

There is nothing better to get the adrenaline pumping. Do not panic. Pick five key points and try to elaborate on those, rather than trying to pack lots of information into a short space of time. If you do not have the chance of having cue cards, look at the five fingers on your one hand and allow each to remind you of one key point. Draw from previous

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news Fedhealth tops ThinkMoney survey Fedhealth and Momentum Health have ranked tops as the best medical aid providers by ThinkMoney. co.za users.

The research was conducted from over 2 500 medical aid reviews written on the ThinkMoney website. Users assessed medical aid providers based on the following criteria: service, premiums, pay out process, claims process and level of cover.

Fedhealth scored 3.9 out of five as an overall score.

Additionally, over 75 per cent of people who posted reviews about Fedhealth would recommend this medical aid to their family and friends. Peter Jordaan, principal officer of Fedhealth, says Fedhealth is thrilled with the result.

“We will continue to work hard at keeping our service at a high standard and ensuring that we are really there for our members when they need us most,” he says.

Momentum Health ranked second, with 3.8, and Bonitas third overall, with an average score of 3.7. Both Fedhealth and Momentum Health scored well in the service category, with 3.8 and 3.7 respectively.

Anton Ossip, CEO of Discovery Insure

Discovery slammed with hefty fine for Vitalitydrive programme Discovery Insure has restructured its Vitalitydrive programme after being fined by the Financial Services Board (FSB) last month.

We carried a story on our website that the FSB had hit Discovery Insure with a R50 000 fine for contravening section 44 of the Short-term Insurance Act. The contravention related to the travel and card cash back benefits offered as part of Discovery Insure’s Vitalitydrive product, which the FSB said did not directly relate to the risks being insured and as such constituted an inducement to clients to contract with Discovery.

However, Discovery Insure policyholders can heave a sigh of relief in the knowledge that they will still receive

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fuel discounts in return for good driving behaviour.

The FSB told RISKSA that Vitalitydrive incentives that are directly linked to the risk covered by the insurance policy and which form part of the policy contract are still permitted.

According to Discovery Insure CEO, Anton Ossip, the contravention occurred as a result of a bona fide oversight. “The registrar has accepted that we operated with good faith based on legal advice obtained regarding complying with the STIA,” he says.

“Discovery Insure has accepted the penalty imposed on the company, removed the contravening benefits and restructured the Vitalitydrive programme to simplify and enhance benefits for all policyholders.”

AIG and All Blacks sign five-year sponsorship deal International insurance and financial services giant American International Group (AIG) and the New Zealand Rugby Union (NZRU) announced a five-and-a-half year sponsorship agreement for six of the union’s major rugby teams. Several rugby supporters labelled the new sponsors’ prominent three-letter branding on the front of the All Black jersey as “disrespectful and daring”. But it is a purposeful move by AIG. “Prominently associating the AIG brand with the legendary All Blacks and the highly competitive and successful New Zealand Rugby Union teams, as well as passionate rugby fans around the world, represents a tremendous opportunity for AIG, the NZRU and rugby,” says Bob Benmosche, AIG president and chief executive officer. “The All Blacks’ winning tradition and reputation for tenacity, integrity and performance reflect attributes in AIG’s own culture. We are extremely honoured to be the All Blacks’ new frontof-jersey sponsor and excited by the benefits that come with the teaming of two world-class franchises.

Together, AIG and the NZRU are a powerful global partnership, symbolising strength and potential.”

Financial terms of the sponsorship agreement are not being disclosed, but are rumoured to be around $20 million a year.

Genasys launches Green Box for M&F brokers Genasys Technologies has announced the successful deployment of the Mutual & Federal Green Box personal lines product within the Genasys SKi platform.

Together with the commercial product released on SKi in July this year, there has been much hype around the launch of the Green Box, with brokers anxious to get their hands on it. “For the Genasys broker community, the launch of the Green Box within SKi means that Mutual & Federal brokers can now have access to both personal lines and commercial products on the SKi and Ski Host platforms,” says Steve Symes, CEO of Genasys Technologies. “We appreciate the enormous effort that has gone into the development of this product and wish Mutual & Federal much success with it.”

Alexander Forbes sports green building Financial services company Alexander Forbes has moved its 2 200 Johannesburg staff into a new eight-storey, R840 million and 36 950 square-metre head office in Sandton.

Accredited with a four-star Green Star rating by the Green Building Council of South Africa, 115 West in Sandton is both energy and resource-efficient and environmentally responsible. It incorporates design, construction and operation practices that significantly reduce or eliminate the negative impact of development on the environment and the users of the building. Some of the building’s significant green features include the grey water reticulation system, the natural heating and cooling systems and the processes by which 115 West traps and disperses natural light, saving electricity.

Edward Kieswetter, group chief executive at Alexander Forbes

“The move, like our recent rebranding, is an expression of confidence in ourselves and the future of our country and continent,” says Edward Kieswetter, group chief executive at Alexander Forbes. “The immediate benefits of green buildings, such as savings on operating costs like energy and water, mean that 115 West has been future-proofed from high retrofit costs by virtue of the installation of efficiency measures from the start,” Alexander Forbes said in a statement.

“Moreover, Alexander Forbes will benefit directly from its occupation of the building as staff productivity increases.”

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RE workshops crucial to up pass rate The Financial Services Board’s (FSB) recent extension of the Regulatory Examination (RE) deadline has set tongues wagging over the reasons for widespread exam failures.

The FSB said one of the reasons candidates taking the RE exam remained unsuccessful despite many attempts, could be due to “incorrect examination techniques”. In an attempt to rectify poor pass rates, the FSB will be holding workshops to assist candidates with the material they need to learn in order to be successful in the exams.

“These workshops for brokers who need to rewrite the Regulatory Exams could make the difference between a pass and a fail,” says Kirsty Chadwick, whose company The Training Room Online has held over 1 500 workshops for many of South Africa’s large financial services providers.

Kirsty Chadwick

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“The exam’s high failure rate isn’t necessarily

a matter of badly structured examinations. It could very well come down to the fact that the study material includes complex legal jargon, which is difficult for second language learners in particular. In addition, many who plan on taking the exam underestimate how long it will take them to master the material.”

The FSB has called on brokers affected by the new deadline to start preparation for the exams as soon as possible and has further urged employers to support their staff in preparation for the Regulatory Exam deadline in March 2013.

“For the FSB workshops to be successful, brokers’ limited timeframe needs to be taken into account,” says Chadwick. “It is therefore vital that the study material be broken down into bite-sized chunks that are easily absorbed.”

SSP to help Absa with client services Absa and leading global technology provider SSP announced that the financial services provider is live on SSP Select Insurance. As part of its phased implementation approach, Absa has deployed SSP Select Insurance for its commercial lines business, supporting five lines of business distributed through insurance brokers.

SSP Select Insurance has already delivered a wide range of business benefits enabling Absa to improve process efficiency through the automation of manual processes and enhance its customer experience through better policy schedules and user-guided underwriting.

Managing executive of Absa Insurance, Andries van Staden, says, “SSP Select Insurance is key to improving our customer services. Customers expect a slick and efficient service at every touch point and the flexibility of SSP Select Insurance will assist us to do this and differentiate our service.”

Committed to accuracy RISKSA works hard at getting it right. In a story entitled ‘Terra Nova product offerings launch to the insurance industry’, which we ran in the News pages of our September issue, we referred to South African Tourism Insurance Brokers. This is incorrect and should have read SATIB Insurance Brokers.

Hannover Re rewarded with top credit rating Global Credit Rating (GCR) has reaffirmed its international scale A rating and its national scale AA+ rating on Hannover Reinsurance Africa Pty (Ltd). Both ratings have been given a stable outlook.

According to GCR, the rating is underpinned by the parental support provided by Hannover Re Germany (rated AA- on an international scale). “The strategic benefit of Hannover Re to the group is underpinned by the significant cumulative profits transferred throughout the review period,” according to a statement

by GCR. Further, GCR notes that the group’s market position and profile are viewed as key strengths, given Hannover Re’s position as a top tier player in the South African reinsurance market.

“We are extremely pleased with the affirmation of our credit rating

by GCR. This rating reflects the continued progress we have made in the local market and provides comfort to our local clients,” says Randolph Moses, managing director of Hannover Re Africa.

FPI recognised by SAQA The South African Qualifications Authority (SAQA) has approved the Financial Planning Institute’s (FPI) application for official recognition as an independent voluntary professional body. It further approved registration of FPI’s designations on the National Qualifications Framework.

FPI CEO, Godfrey Nti, says, “We are very pleased with this approval, because we are among the first set of professional bodies to be officially recognised.” FPI chairperson Prem Govender adds, “This is indeed a ground-breaking moment for the FPI. It was our intention to bring professionalism into the financial services arena and we have always worked tirelessly to gain recognition for financial planning as a distinct profession.”

“This approval by SAQA certainly gives us the mandate to engage the FSB and National Treasury in this respect,” Nti concludes.

TV Godfrey Nti, CEO of the FPI

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new ACE Jabulane Mabuza has been appointed to the board of ACE Insurance Ltd South Africa effective immediately. Mabuza’s executive career spans well over two decades as a senior leader in business in South Africa. Recently appointed as chairman of business unity South Africa, he also serves as the deputy chairman of Tsogo Sun Holdings and is the current chairman of the Casino Association of South Africa.

appointments

GLACIER BY SANLAM Glacier by Sanlam has appointed Leigh Köhler as head of Glacier Research. Previously head of the investment administration team, Köhler will head up the team of qualified investment analysts, who support the sales function within Glacier. Köhler holds a BCom (PPE) from UCT, and a BCom (Hons) in economics from UNISA.

ASTUTE Phillip van Schalkwyk has been appointed as the new chief operating officer of Astute FSE. A professionally qualified chartered accountant in South Africa and Namibia, Van Schalkwyk has a master’s degree in business leadership from UNISA. He is also an associate of the Institute of Risk Management in South Africa (IRMSA). He joined Astute from Sanlam Emerging Markets where he was responsible for special projects.

Prior to that, Van Schalkwyk was chief financial officer at Sanlam Health International.

Philip van Schalkwyk

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UNISA’s internal audit education partnership programme.

After qualifying as a chartered accountant in 2007, Du Bourg worked at Grant Thornton New York before joining the Johannesburg office as audit manager. She joined the corporate finance team in 2008 and has a specific expertise in due diligence.

She has been intricately involved in transactions ranging from small privately held businesses to large listed companies.

Oupa Mbokodo

Claire du Bourg

MUA

Leigh Kohler

GRANT THORNTON Grant Thornton Johannesburg has announced the promotion of Oupa Mbokodo to director within advisory services and of Claire du Bourg to associate director within the corporate finance team. Mbokodo has extensive internal audit experience in the public and private sectors, and was head of IT audit at Vodacom.

He currently sits on the board of the Institute of Internal Auditors in South Africa (IIASA), and

Delouise Marais has been appointed as the new executive head of underwriting at MUA Insurance Acceptances and will have the joint responsibility along with Michelle Bellin, originally national claims managers and now head of claims at MUA. In addition, Warwick Scott-Rodger has been appointed as the new regional manager for Gauteng.

Delouise Marais

Michelle Bellin

Warwick Scott-Rodger

ZURICH Zurich South Africa has announced the appointment of Cloud Saungweme as chief claims officer and JP Blignaut as chief underwriting officer. With over 20 years’ experience in the short-term insurance industry, Saungweme’s previous roles include claims operations superintendent at AIG South Africa; claims operations supervisor at Protea Insurance; assistant claims operations manager at Rand Mutual Assurance and, most recently, general manager operations at Hollard Insurance.

Blignaut has over 16 years’ experience across Africa, Europe and Asia. He was previously the chief actuary at RSA Insurance Group in Asia and the Middle East regions.

Cloud Saungweme

JP Blignaut

VAT and postage included. Standard postage free to RSA addresses only.

events Santam’s Masters of the Craft Expo 2012 Santam’s specialist business division hosted an expo for brokers, showcasing all its underwriting managers, at the first leg of the Masters of the Craft Expo, held at the Pavilion Conference Centre at Cape Town’s V&A Waterfront on Tuesday, 25 September.

The expo enabled Santam’s 13 underwriting managers to engage with various brokers.

Santam’s Juan Coetzee at the Masters of Craft Expo 2012.

FSB hosts bindER regulation road show The Financial Services Board hosted the Binder Regulations

Implementation Roadshow throughout August and September in Cape Town, Bloemfontein, Durban and Pretoria. The purpose of the road show was to create awareness, understanding and consistent application of the binder regulations, which came into effect on 1 January 2012. Presentations were made by the FSB, the Association for Savings and Investment South Africa (ASISA), the Financial Intermediaries Association of Southern Africa (FIA), Shortterm Insurance Data Exchange (STRIDE), the South African Insurance Association (SAIA), and

the South African Underwriting Managers Association (SAUMA).

IISA Insurance Forum Breakfast The Insurance Institute of South Africa (IISA) hosted its Insurance Forum Breakfast at the Hilton Hotel in Sandton, Johannesburg on Friday, 14 September to unpack a PricewaterhouseCoopers survey on ‘Maximising value from today’s opportunities – Strategic and emerging issues in South

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African insurance 2012’. With the emphasis on motor and transport, Caroline da Silva, executive of market development at Mutual & Federal, updated delegates on trends within the motor sector and discussed the top motor spends impacting the industry. The event was sponsored by Chartis and lucky draws saw Manchester United T-shirts and Zurich gold kit bags handed out.

Caroline da Silva, executive of market development at Mutual & Federal.

SAPCOR’s 20-year anniversary as insurance broker South African Personal and Corporate Insurance Brokers (SAPCOR) recently celebrated its 20-year anniversary as an insurance broker. The celebration was held, together with Hollard as a shareholder, in the Hollard Villa in Parktown, Johannesburg.

Numerous staff members were rewarded for their years of commitment to the company. The mafia theme complemented the foundation of the business, as seven family members work for the group.

golf apparel. According to Altech Netstar’s events coordinator, Lilania Otto, “The weather played ball, and the event was fantastic in every aspect.”

The Lireas Conference The Lireas Conference was hosted at the Hyatt Regency Oubaai Golf Resort and Spa in George, between 12 and 14 September.

It featured healthy debate about various trends within the industry, as well as a talk from Third Degree anchor, Deborah Patta.

Leisure activities included golf, quad biking, spa treatments and an awards evening to close the conference.

Brokers inspired by Fantastic Four Etana brokers were treated to something special when South Africa’s Olympic champion rowing team of James Thompson, Matthew Brittain, John Smith and Sizwe Ndlovu greeted them at the Royal Cape Yacht Club on Thursday, 11 October.

RISKSA was there to relive one of the most incredible underdog victories in rowing history, which saw SA’s Fantastic Four upset favourites Great Britain and Denmark to clinch their first-ever Olympic gold medal, in front of 25 000 spectators.

SA’s winning rowing team: Sizwe Ndlovu, James Thompson and Matthew Brittain, pictured here with RISKSA's Michael Kaufmann.

SAPCO staff celebrate their 20th anniversary in true mafia style.

Altech Netstar hosts golf day at Pecanwood

From left: Valerie Hayter (Lireas), Natasja Blok (Thatch Risk) and Douglas Haig (Lireas).

This year, Altech Netstar hosted its annual golf day at the Pecanwood Golf Estate at Hartbeespoort Dam in Gauteng on Tuesday, 9 October.

There were 96 players present on the day and 24 four-ball teams from the various Altech Netstar channels, which include corporate, motor and insurance. Each player was rewarded with a prize, and the prizes up for grabs included vouchers for Pecanwood Countryclub, as well as Slazenger, Mizuno and Nike

The Insurance Institute of Gauteng (IIG) hosted its final golf day for the year on Wednesday, 10 October, sponsored by Constantia Insurance, Glasfit and Altech Netstar. With over 120 players pitching up at Johannesburg’s Randpark Ridge Golf Estate, there were 30 four-ball teams competing for prizes that included longest drive, nearest to pin and longest day.

IIG Golf Day

From left: Eugene Beck (Road Cover), Tracy Feakes (Standard Bank Insurance Brokers), Kim Gallus (IIG president) and Jade de Ridder (Road Cover).

At the car wash with the ILA The Insurance Learning Academy (ILA) hosted its Conference and Car Wash Day 2012 on Thursday, 11 October at the Houghton Golf Club in Johannesburg. The Car Wash Day is an education and networking event for insurance brokers, UMAs and insurers, comprising mostly heads of HR, training and skills development.

Eighty guests were invited by René Nel from the Insurance Learning Academy. While their cars were being washed, several presentations were given by the IISA, INSETA and Wits Language School. Nel explained how the ILA is assisting the industry with Recognition of Prior Learning (RPL), skills development programmes, preparatory RE workshops and the placement of competent staff into vacancies.

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news international

Insurance costs to decrease with launch of new diabetes drug

Africa

Europe

Few insurance firms known to Nigerian public

EU insurers’ capital charges may be cut to boost loans

Only 15 insurance companies out of 50 firms operating in Nigeria are known to the public, according to a study conducted by German agency for sustainable development, GIZ and Riskguard Africa Limited, reports allafrica. com. The survey shows that the few insurers known to Nigerians are Aiico Insurance, PLC, Niger Insurance, Industrial and General Insurance (IGI), Leadway Assurance, NICON, LASACO, Oasis, Mutual Benefits, Royal Exchange and Crusader.

Other companies identified as underwriting firms include Savana Insurance, Gateway Insurance, Quality Insurance, Liberty Insurance, CBN Agric Insurance Limited and Access Insurance. Concerned by this development, commissioner of insurance Fola Daniel says the national insurance commission in Nigeria developed a draft guideline for the entrenchment and development of insurance at grassroots. He says the guideline on microinsurance is being exposed to the industry, experts and other stakeholders before a final draft will be released to the market.

He adds that the commission intends on collaborating with other relevant regulatory agencies in implementing the plan.

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Reuters reports that capital charges for insurers in the European Union could be cut to encourage lending for long-term projects and help boost the flagging economy.

The European Commission has written to the European Insurance and Occupational Pensions Authority (EIOPA) to look at cutting the amount of capital insurers must set aside to cover some types of investments. “European insurers are a potentially powerful financing channel for long-term investment in growth- and job-enhancing areas,” says Jonathan Faull, head of the commission’s internal market unit in a letter published on the executive body’s website.

Banks welcomed the review, saying lower capital charges for insurers would help kick-start securitisation. Cash-strapped governments have pinned their hopes on the insurance sector to fund long-term economic development as banks curtail their lending for big projects in response to tighter bank capital rules.

Pharmaceutical company Merck announced the results of a clinical trial it conducted for a new once-a-week pill that aids sufferers of type II diabetes. The pill, currently named MK-3102 still has to undergo several trials before it can be submitted for government approvals, according to Globalsurance.com. However, after 12 weeks of treatment, patients who took varying doses of the drug showed a significant lowering in their blood sugar levels. According to World Health Organisation statistics, there are currently 346 million people with diabetes worldwide and 90 per cent of these suffer from type II diabetes. Seeing as Merck’s new drug would drastically reduce the frequency with which patients take medication, combined with the potential for some type II diabetes sufferers to be able to switch from injections to oral medication for treatment, the savings could be significant to insurers and policyholders globally.

Asia AIR opens Singapore office to expand in Asia-Pacific

AIR Worldwide, provider of risk modelling software and consulting services, is opening an office in Singapore to meet the expanding needs of clients in the Asian insurance market. “AIR has kept pace with the fast-

growing markets and our equally fast-growing client base in Asia by opening offices in India (2000), China (2005) and Japan (2008),” explains Uday Virkud, executive vicepresident at AIR Worldwide. “The new office in Singapore ensures our ability to maintain, and indeed enhance, the high quality of service our clients in the region have come to expect from AIR.” New private medical insurance product launched in China

Globalsurance.com has learnt that healthcare specialist Bupa is launching a new product for the Chinese market. Bupa has teamed up with China-based Alltrust Insurance Company to provide Buda premier worldwide health options (PWHO) available from 1 October.

PWHO is unique in that it will consider covering pre-existing medical conditions, a first for international private medical insurance plans in China. With no maximum age limits, no limits on chronic diseases and full cover provided for cancer treatment, Bupa PWHO is sure to appeal to the very large middle and old age group, as well as the younger professionals, with automatic provision for newborns and child-care up to six years of age.

United States Berkshire invests millions in Torus

Looking to fund its ongoing expansion efforts, Torus Insurance Holdings Ltd received a capital infusion of $100 million from Berkshire Hathaway Inc. The specialty insurer says that it has received funding from National Indemnity Co., a commercial insurance unit of Omaha, Nebraskabased Berkshire Hathaway, according to Businessinsurance.com.

“PWHO is unique in that it will consider covering preexisting medical conditions, a first for international private medical insurance plans in China.” the transaction were not released, sources confirmed that the Berkshire infusion ranged from $80 million to $100 million. Torus began operations in 2008 with $720 million in equity funding from First Reserve.

“We are delighted that Berkshire Hathaway has invested in Torus,” Torus Group CEO Clive Tobin said in a statement. “This is part of an expanding relationship with one of the most respected companies in our industry.” Tobin says the investment affirmed the specialty insurer and reinsurer’s global development goal. Torus has substantially repositioned its business in the past two years. In September 2011, Torus said it would acquire Lloyd’s of London syndicate 1301, which underwrites direct and facultative property, accident and health business. In December 2011, Torus acquired the renewal rights to CV Starr & Co.’s continental European business. Torus also sold its renewal rights of its property catastrophe reinsurance book of business and entered the US surety market during 2011.

United Kingdom Lloyd’s ranked best overall in surplus lines

The Berkshire outlay coincided with an additional round of funding provided by existing shareholders and private equity firms First Reserve Corp. and Corsair Capital LLC, a Torus spokeswoman says. While terms of

Reactionsnet.com, a website dedicated to news from the global insurance market, reports that overall surplus lines premium was down in 2011 but domestic writers managed to increase

premiums while Lloyd’s held onto top spot.

However, non-Lloyd’s foreign surplus lines writers saw their premiums plummet 32.5 per cent in 2011. Direct written premium for the surplus lines market fell 1.8 per cent in 2011, after falling 3.8 per cent in 2010, according to a new report from AM Best. The rating agency noted that the decline in premiums for a fifth straight year was unprecedented over the past two decades.

“There are currently 346 million people with diabetes worldwide and 90 per cent of these suffer from type II diabetes.”

In the past 20 years, the surplus lines market has expanded by more than 4.5 times, with commercial lines consistently accounting for more than 80 per cent of surplus lines business. AM Best says the underwriting and operating performance of surplus lines writers in 2011 reflected the impact of continued competitive pressures, standard insurers being unwilling to give up surplus lines business and natural catastrophe events.

The market’s performance is strong, however, with surplus lines players outperforming their standard lines peers. “Despite the catastrophic events of 2011, low investment yields and continued competitive pressures, surplus lines specialists, particularly the market leaders, once again generated considerable operating profits and returns,” says AM Best.

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@Lunch with Brad Hogan

This month, RISKSA caught up with the CEO of Oakhurst Insurance, Brad Hogan.

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What to see, what to do Planning your year-end holiday can often prove to be more stress than satisfaction. To aid you in this endeavour, we’ve put together a list of activities and events taking place countrywide over the next few months.

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Brought to you by

@lunch with...

Brad Hogan CEO of Oakhurst Insurance

Over lunch at Sevruga, in Cape Town’s famous Victoria & Alfred Waterfront, RISKSA and Global Choices got to know Brad Hogan a bit better. We were surprised to learn that Brad’s passion for financial services began at a young age.

Brad, you always wanted to be in this industry. We don’t come across people like that every day. When and how did you know that insurance was for you?

I’ve had a passion for financial services as far back as I can remember. At the same time, I’ve always been business minded and have been running businesses of one sort or another since the age of 10. When I got out into the working world it was a natural succession to combine the two interests and start, at the age of 21, what has subsequently become the Oakhurst Insurance Company.

My interest in insurance comes from understanding and loving the concept and benefits of insurance, which enables me to sell the service with passion and conviction. It supports one of my core life philosophies in us collectively being able to help one another in adversity.

Would you encourage your two sons, Joshua and Gabriel, to pursue a career in insurance?

Yes, most certainly. Although Josh is very creative and seems to have his mind set on Brad Hogan (left) and Wimpie van der Merwe, CEO, Global choices.

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"I’m a keen reader and normally read a couple of books at the same time. I’m currently reading Wealth of Nations by Adam Smith, which although almost 200 years old, is still remarkably relevant to international business today." graphic design. Right now skateboarding is his passion and he is focused on skateboard logos and design. Gabriel is a fanatical sportsman and is very keen on a professional sports career, so we will see what happens.

Are they quite similar to you?

In some ways yes, but in most ways they are like my wife Lindsay. Where I tend to be more of an introvert they are both very social.

You’ve enjoyed tremendous success in the industry. Why do you think that is?

I’ve surrounded myself with top people who have a common belief in and passion for excellence, hard work and discipline and are unashamedly proud of our industry and the greater good that we’re contributing to. I also believe we have been blessed and fortunate.

With a dad from New Zealand and a mum from South Africa, you must have a hard

time when it comes to supporting rugby games. Where do your loyalties lie?

(Laughs.) I was born in South Africa and am an absolute avid and fanatical supporter of the Springboks. My blood is green!

You recently took up running. While you might be off to a late start, will you ever attempt the Comrades?

Why George? We’re not aware of any other insurance companies with head offices there.

Being predominately call-centre based, we could have based the company anywhere and I’d always wanted an excuse to live here. For this, I blame Dalene Matthee.

As a business innovator, who are your business idols?

No, I don’t think so. I have a half-marathon coming up, which is daunting enough for now.

Richard Branson and Warren Buffet.

What book are you reading at the moment?

What would our readers be surprised to learn about you?

I’m a keen reader and normally read a couple of books at the same time. I’m currently reading Wealth of Nations by Adam Smith, which although almost 200 years old, is still remarkably relevant to international business today.

I’m a military history-book enthusiast. When I’m not reading business books, I’m generally reading history books and military history books in particular. I’m also a proud member of the Gideon’s Bible Association and am passionate about that organisation and the purpose it serves.

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TEN OF THE BEST for every occasion Bianca Wright

As year-end approaches, gift anxiety might be setting in. How do you select the perfect gift for the boss? How do you make your secret Santa present stand out from the crowd? And how do you do it all without breaking the bank? Chocolates, watches, bottles of wine, they’ve all been done before. RISKSA delved into what’s hot in 2012 to bring you a round-up of 10 trendy, functional and desirable gifts from R100 to R500 that are sure to impress.

Picture it

Digital picture frames are a thoughtful and useful option. Starting prices range from R400 to R600 for a seven-inch screen, but there are more affordable and unique options such as the digital photo frame key rings available through companies such as Xmas Gifts (www.xmasgifts.co.za) or Gift Republic (www.giftrepublic.co.za) for as little as R200.

Depending on size, these handy gifts can cost up to R400. Perkal Gifts (www.perkalgifts.co.za) offers a 1.5-inch digital photo frame key ring for just R148, but a minimum order of 50 units is required. Storage size varies, although 16MB, which can hold between 50 and 100 photos, is the usual on smaller models. Battery life is about four to five hours on average and the built-in lithium battery is rechargeable through a USB charger.

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Sports mad music

If you know your secret Santa pick is a jogging regular who loves her music, the Sports MP3 player is a logical choice. The back-hang hands-free sports MP3 player from Gadget Mad (www.gadgetmad.co.za) boasts 2Gb storage space, enough to store over 800 songs using WMA or MP3 files. It retails for R260. Gadget Mad also stocks a Sports MP3 player cum pair of sunglasses (available in silver, black, blue or red) for between R280 and R310.

Pair it with a voucher for music downloads from Nokia Music (http://music.ovi.com/za/en/pc/ help/musicoverview/), iTunes SA (http://www. apple.com/za/itunes/) or Rhythm Music Store (http://rhythmmusicstore.com) and you have the makings of a perfect gift.

Eco-thought

Eco-friendliness is on everyone’s minds these days and you need only take a look at your boss’ desk (or your own) to realise that the office is a paper gobbler, destroying trees at an alarming rate. If you are eco-conscious or need a gift for someone who is, consider the Boogie Board Paperless LCD Writing Tablet 8.5", which retails at R430 at Mantality (www.mantality. co.za). Lightweight, flexible and pressure sensitive, the tablet offers the convenience of pen and paper without the environmental decimation. One click of a button erases the writing. Ingeniously it runs on a single watch battery, which it claims can last for six years if the screen is erased 20 times a day. While not suitable for long note-taking (due to its size) it is a handy option for quick notes, to-do lists and other paper gobbling tasks that take place daily in the office environment. Mantality even offers branding options to corporate customers buying in bulk.

Environment on the forefront

Environmentally-friendly gifts come in all guises from beautiful bags made from recycled materials to organic body products and eco-sensitive gadgets. Pure Gifts (http:// puregifts.co.za/), for example, aims to demonstrate that it is possible to be both green and gorgeous. “We have gone to great lengths to source product ranges that are not only good for us, but also less harmful to the environment,” the site says. Pure Gifts offers organic body products, jewellery and bags that are eco-conscious.

A learning experience

On the other hand, the person you want to spoil may not be the adventure type. If that’s the case, you can still choose an experience voucher but opt for a more educational, fun or quirky offering. Cooking classes cost on average R500 from Gift Day and there are a variety of options, even for couples. A four-hour barista course to help you make coffee like a pro will cost R500, while a golf lesson with a PGA pro is R395. Other options include dancing lessons, belly-dancing experiences and wine appreciation courses.

Ladies might enjoy spa packages. Affordable options include Cayenne Spa, Camelot Health Spa and Bliss.

Wine has long been a popular gift among colleagues and clients and, while you may think it overdone, if you choose the right product it can be a winning choice. Unique Gifts’ (www.uniquegift.co.za) wine bottle gift set features all the accoutrements necessary to enjoy wine: an elegant wine bottle gift set of black faux leather with white stitching with a waiters’ friend, wine stopper, drip collar and wine pourer. Add a good bottle of wine and you have a thoughtful and elegant gift option.

The gift set retails for R218.

Gifting for good

Outdoor options

The spirit of adventure

For the crazy colleague who climbed Kilimanjaro last Christmas or the adrenaline junkie who regales you with tales of his exploits, you can opt for an adventure experience voucher. There’s an experience for every type of adventurer from Gift Experience South Africa’s (www.giftexperiencesouthafrica.co.za) elephant interaction for R475 to a canopy tour adventure at Tsitsikamma from Adventure Bookings (www.adventurebookings.co.za) for R450. For those wanting to get the heart pumping, Gift Day (www.giftday.co.za) offers the XPanda Shark experience at uShaka Marine world in Durban for R250. You are lowered in an acrylic cage into the shark tank to come face-to-face with the Zambezi and ragged tooth sharks which make the tank their home.

Other adventure experience vendors include Celestial Gifts (www.celestialgifts.co.za) and Egos (www.egos.co.za).

Classic but timeless

Outdoor enthusiasts and gourmet foodies will love an elegant picnic basket as a gift.

Outdoor eating is, after all, a must-do during SA’s gorgeous summer months. Picnic Basket (www.picnicbasket.co.za) offers a range of picnic baskets that can be branded with corporate logos. The Vineyard Cooler, for example, is a brown bamboo basket with aluminium foil-lined cooler, which includes two knives/forks/teaspoons, two plastic wine goblets, a wooden cheese board and a detachable bottle holder, perfect for that cheese and wine getaway. It costs R331.18, but requires a minimum order of 10 and does not include the cost of branding.

If a gift that makes a difference is more your style, consider supporting Gifts4Good (www. gifts4good.co.za), an initiative of Greater Good South Africa, which donates the value of your gift to a needy development project. The recipient of the gift gets an e-card indicating that they have contributed to the project and the project benefits from the gift itself. Corporates have three options in terms of participation: you can select gifts ranging from R50 to R1 000 and send a branded e-card; you can purchase a range of branded vouchers that can be redeemed by your staff or customers online for a life-changing gift of their choice; or you can buy a corporate hamper of gifts from a particular gift group for R5 000.

According to Gifts4Good, the gifts are chosen from projects in five priority social development sectors: Education, Community, Health, Environment and People and the projects are screened and evaluated through the South African Social Investment Exchange (SASIX).

Empowering gifts Perhaps you want to give a tangible physical gift, but still want to make a positive impact on your community. Companies like Essay Gifts (www.essaygifts.co.za) offer products produced by crafters, manufacturers, artists and designers from all over South Africa at a range of prices. Essay Gifts works with rural crafters and young designers in the corporate, promotional, complimentary gifting and conference accessories industries to empower them through the creation of opportunities.

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What to see, what to do Bianca Wright

Holidays can be both a blessing and a curse; a blessing because everyone needs some me-time once in a while and a curse because there is always the threat of boredom on the horizon.

But have no fear, for RISKSA has scoured the calendar to find you a variety of events and activities to suit every mood and every situation, whether you are single, a couple or a family with kids. Here are a few ideas on what to do this year-end holiday.

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23/11 Food, wine & design The much-anticipated third annual Sanlam Investments FoodWineDesign Fair takes place from 23 – 25 November 2012 on the roof top of Hyde Park Corner. More than 100 talented winemakers, designers and food artisans will treat guests to the best of South African produce at the boutique outdoor market.

The fair will take place on the 5 000 m² rooftop of Hyde Park Corner, which will be transformed into a landscaped pop-up market with a seated dining area, tent structures and theatre lighting.

Foodies, design fundis and those with a penchant for wine will be delighted by the wide array of exhibitors at the 2012 Fair. Designers such as Shaw Sisters, Matblac, Skinny Lamix, Tinsel and Tin Table will offer visitors everything from jewellery to furniture. Prominent wine producers De Morgenzon, Tokara, Swartland All Stars, Graham Beck and Wedderwill will be introducing Jozi residents to their wines, and the likes of Pesto Princess, De Boerin olive oil, the Cheryl Amy Jones bakery and Green Goose Cheeses will keep visitors pantries well stocked.

Additional exhibitors confirmed for the event this year include Sirkel, Bos Ice Tea, Koop Design, Dear Rae, Missibaba, Idiom Wines, Rickety Bridge and Petit Cochon.

23/11 Wine not?

Nothing says festive like a good wine. Following on the success of the Wine Show Johannesburg and Port Elizabeth, the inaugural Durban event will take place from 23 – 25 November at the Durban Exhibition Centre and will see over 60 wineries gathered under one roof. In addition to sampling the wines on offer, as part of the entrance fee visitors can take part in interactive wine theatre sessions to learn more about the different wines, directly from the people who make them. For those wanting to do their bit for charity, the latest Wine Laid Bare calendar will be available to purchase for R100 with all proceeds going to CANSA. Launched in 2009, the Wine Laid Bare photographic competition has received exceptional support from the public and is now in its fourth year.

Confirmed exhibitors at the Wine Show Durban include Bonnievale, Avontuur, Blaauwklippen, Orange River Cellars, Bosman, Domaine des Dieux, Winery of Good Hope and Simonsig.

Tickets are available in advance through Computicket for R85 per person, at the door for R95 and weekend passes are R160 per person. For more information, visit www.wineshow.co.za or call 021 888 8803.

Ticket price: R80 a person (kids under 12 enter free), tickets available at the door, at Hyde Park Corner and online at www. webtickets.co.za.

For additional information on the Sanlam Investments FoodWineDesign Fair as well as pre-ticket sales, please visit www. foodwinedesign.co.za or contact Artlogic on (011) 447-3868.

10/12 Daily bread

26/12 Picnic French-style TP Le Pique Nique is an outdoor family event, with special sections for music, dance, adult contemporary, a special kids zone, board and TV game zone and Jack's House and Beer Garden. Artists include Black Coffee,Vinny Da Vinci and Christos. The event takes place at the Nelson Creek Wine Estate in Paarl on 26 December 2012 and 1 January 2013.

Tickets cost R150 to R300 with Kids’ Zone entry costing R50.

Tickets are available through Computicket.

Culinary adventurers will want to sign up for one of the bread-making experiences at Bread & Wine restaurant on the Môreson Wine farm. Participants receive their own apron, recipe book and ingredients and, with a bit of guidance, get to make two different types of dough: focaccia and sour dough.

While your breads are baking you will have the opportunity to taste the wines in the vineyard.

A light lunch will be served with some of your very own baked breads. Maximum group size: 10 people.

Cost per person R400 (excludes drinks and gratuity). Events take place on 10 December 2012 and 14 January 2013.

To book for the bread baking classes, contact Tina on 021 876 4004 or breadandwine@moreson.co.za.

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2013 Traditional Cape Flavour No New Year’s celebration in the Cape would be complete without the annual Kaapse Klopse or Cape Town Minstrel Carnival. According to SA-venues, “The city of Cape Town comes alive to celebrate new year in a raucous carnival the likes of which are not seen elsewhere in the world, unless you’re ready to compare it with the Mardi Gras in New Orleans and the Carnevale in Rio de Janeiro, which it isn’t, not quite, although certainly it has its roots therein.”

The Cape Town Minstrel Carnival, as it’s officially known, takes place every year at new year when thousands of musicians, singers, dancers and tailors gear themselves for the traditional Kaapse Klopse. Information for 2013 is not yet available.

23/11 Novemberfest If beer is your beverage of choice, the Cape Town Festival of Beer is an obvious addition to your year-end calendar. Over 150 brands and over 50 breweries, both local and international, will showcase their hop-heady delights at the Hamiltons Rugby Club from 23 to 25 November this year. this year the festival will be bringing you guided beer tours with experts to ensure you get the most out of your experience. Let your

01/11 Circus tricks What do you get when you combine the thrills and spills of the traditional circus with the legends of rock music? Big Top Rock at the Barnyard Theatre in Rivonia, that’s what.

The show includes music, aerial acts, dance routines and a circus atmosphere that will rock you like no other.

According to the website, “Hosting the show as ringmaster is the talented rock singer extraordinaire Andrew Webster who is joined by Nadine Sisam and Richard Hala on vocals and a rocking five-piece band! A variety of acts that include the pole acrobatics, lyra act, flying rope and strap acts, are all performed to the beat of the rocking live band and singers. Six decades of music is featured from icons like Prince, Lenny Kravitz, Adele and Pink to rock bands like ACDC, U2, Journey, Santana and many more.”

The show runs from 10 October to 30 December and tickets cost between R95 and R150 per person. Visit www. barnyardtheatre.co.za for more details.

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guide take you round while you meet the brewers and sample a variety of beers, watch home-brewing demonstrations and participate in blind tastings. And if that’s not enough, there will also be beer judging, beer merchandise for sale, workshops and the highly anticipated Beerlympics.

Tickets cost R80 for a day pass and can be purchased from www. webtickets.co.za. Visit www. capetownfestivalofbeer.co.za for more information.

01/11 Nobody puts Baby

in the corner!

Every woman of a certain age has dreamed of being Baby, of doing a little dirty dancing with Johnny and defying their fathers. If you loved the film, you have to see the story come alive on stage at Montecasino. Ditch the hubby or boyfriend, grab your pack of favourite girls and relive the magic of Dirty Dancing.

Playing the leads of Johnny and Baby are UK Dirty Dancing star Gareth Bailey and our very own Bryony Whitfield. Luigi Vigliotti is the alternate Johnny.

The show runs from 26 October until mid-January 2013.

Tickets cost between R100 and R400 and are available from http://www. montecasino.co.za/whatson/Theatre/ Pages/DirtyDancing.aspx.

Find out more about the production at www.dirtydancingsa.co.za. 

06/12 To market, to market Join the festivities and find those perfect stocking fillers at Hobart Grove Centre’s Christmas Market, off Grosvenor road in Bryanston. You can socialise with friends over scrumptious delights and shop for unique gifts from the gorgeous gift stalls.

The event takes place on Thursday, 6 and Friday, 7 December at the Corner of Hobart and Grosvenor Roads in Bryanston.

For more information about the market, visit www.hobartgrovecentre.co.za

29/11 Christmas in the Home It may be Port Elizabeth’s beaches that first attract you to this seaside city, but that’s not all PE has to offer. At the end of November, the friendly city opens its hearts and purse strings for the annual Christmas in the Home event which features stylish and exquisite art, crafts, delicacies, unique gifts, designer apparel and homeware.

According to its Facebook page, “Our aspiration is to provide an annual, affordable, platform opportunity for high-class artists, craftsmen, entrepreneurs and like-minded

individuals to exhibit their exceptional wares while giving back to our under-privileged members of society in a significant and meaningful manner.” The event benefits local non-profit organisations while also providing some Christmas inspiration and fun for visitors.

The event takes place from 29 November to 1 December 2012 at the Moffett on Main Lifestyle Centre in Walmer, Port Elizabeth.

Visit the Facebook page for more info: https://www.facebook.com/ pages/Christmas-in-the-HomeCreative-Artistic-Showcase-CharityFundraiser/109743232412235

07/12 Get jamming

15/12 Electro-fans Electro-music fans will enjoy the annual EDM Fest on Saturday, 15 December at the Nasrec Expo Centre. NuWave Entertainment, together with Tinderbox, is bringing South Africa Gareth Emery; Lange; Protoculture and a live vocal set from Sarah Howells for one united display of mind-blowing trance, progressive trance and live vocal performances.

Time: Doors open 20h00 Cost: Regular R295 via Computicket; R300 at the door. VIP R450 via Computicket and NuWave’s network of stores around Johannesburg. For more event information, contact info@edmfest.co.za

Looking for a way to keep the kids occupied during the holidays? Consider Artjamming’s fun-filled holiday programme.

01/12 Rio in the Cape When you think of Rio, you immediately think carnival and now the spirit of the carnival – combined with a good cause – is being brought to the Cape. The eMzantsi Carnival takes place on the first Saturday of December annually, and is all about celebrating life in Cape Town’s south peninsula. “By showcasing the fabulous diversity of our people and cultures, we bring our communities together and create a shared south peninsula identity,” the website says.

The Carnival is the culmination of a year-round community-building process that encourages people of the south, especially children and youth, to cross boundaries and collaborate with each other. Around 1 500 people from all over the valley join in the colourful parade and stage show, including minstrels and marimba bands, gumboots and gospel singers, b-boys and ballet dancers. It’s a must-see for all.

Visit http://www.emzantsi.org.za/ for more details.

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Over the December school holidays, Artjamming stores in Johannesburg and Cape Town will run daily arts and crafts activities such as card making and sand art. The chilled-out beat of the music and the endless supply of paint and tools will take their imagination away to a creative and colourful place to turn the canvas into a masterpiece. Take advantage of the great deals on offer and upsize your canvasses to make a super special gift painted Grant with love for that special granny or grandpa.

Artjamming is also hosting the Summer in the Centre 17-day paint-a-thon at Cape Town's Cavendish Square shopping centre from 7 December. Children, age five and up, can help paint a surfboard with one of the programme's celebrity participants.

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30/11 Tale as old as time

The nominal entry fee will be donated to the Reach for a Dream foundation and proceeds go to fund back-to-school and other invaluable projects. The indoor beach area, located outside the Stuttafords Court, will provide a safe and interactive space for children to socialise and have fun while giving back to the community in the spirit of the festive season.

The young and the young at heart will be enchanted by the age-old tale of Beauty and the Beast in KickstArt's production of Disney’s enchanting musical at the Elizabeth Sneddon Theatre in Durban from 30 November 2012 to 6 January 2013. The production is directed and designed by the multi award-winning team of Steven Stead and Greg King and truly captures the wonder and beauty of the Disney movie in a stage performance that is sure to please adults and children.

Date: 7 December 2012 – 11 January 2013, Monday to Friday Venue: All Artjamming stores

Tickets cost between R130 and R200 per person. For more information, visit www. sneddontheatre.co.za.

Broker’s Wife Leathers and feathers

At the car wash

Delegates at the recent Lireas Conference held in George went all out for the Leathers and Feathers-themed dinner. Two representatives from CIA used it as an excuse to sport whips and all manner of leather erotica. Meanwhile, living up to their agricultural business, the Landmark directors held nothing back and made their own shorts and waistcoats out of leather. Long socks were obviously involved too.

Because they understand that insurance folk don’t have much extra time on their hands, the Insurance Learning Academy allowed delegates to have their cars washed at a recent event in Johannesburg. This proved a hit and I have to wonder what free service it might offer at its next event. Tyre-check anyone?

Claim denied Also at the Lireas Conference, one underwriter let slip the following faux pas: “My rule of thumb is not to pay claims.” Needless to say, the hall erupted before this statement could be qualified (presumably he meant something else?) and delegates claimed to have finally found out the secret to his success.

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Bootcamp bliss Insurance Bootcamp’s motor seminars were held in Cape Town, Johannesburg and Durban last month and were not without their share of household hiccoughs. Among them were forgotten pyjamas by one Bootcamp committee member and a forgotten toothbrush by another. Once again charming the ladies, one of the Sasria team managed to sneak some additional, heavy luggage on-board the flights at no extra cost. But I’m relieved to report that there was no marriage proposal involved this time.

Actuaries amused?

Actuaries at the recent Actuarial Society of South Africa Convention proved a lot less dry than is commonly supposed. Well, one in particular. The president of the ASSA Society let his hair down at the convention’s formal dinner and dance, spending most of the latter part of the evening on the dance floor and encouraging his fellow actuaries to do the same. He even had a debut performance to the song ‘Stand by me’, and I’m told he’s a natural performer. Good on you for setting an example Mr Gamedze.

Lord knows that actuaries need some help when it comes to having fun.

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