COMPANY PROFILE
2014
Absa Insurance Company
0860 111 630 | www.absa.co.za
company profile
Insurance with a difference Bank on it Editorial: Colin Chinery Production: Ajuanne Payne
Absa Insurance is a fast expanding arm of one of South Africa’s leading and most popular banks. It’s a unique “perfect fit,” leveraging inter-active capabilities, bringing protection closer to the customer and driving expansion into other parts of the continent. “If you are looking for ideas and opportunities, being part of a bank is an amazing place to be,” says Managing Executive Andries Van Staden.
On a Thursday afternoon last November a massive storm peppered hail stones as large as golf balls on parts of Gauteng Province, bringing damage, havoc and insurance claims topping two billion rand.
based Barclays, and Absa Insurance an amalgamation of two companies in a 1992 internal consolidation. Absa’s range of short-term insurance solutions extends across home building and contents – its major sector vehicles, portable possessions and watercraft.
“It was the biggest insurance event in South Africa’s history, and it threw up some key questions,” says Andries Van Staden. “How you help clients, how you restore them back to the position they were in, and how you learn from events like this”? Mr Van Staden is Managing Executive of Absa Insurance, part of the Absa Group, one of the largest banking institutions in South Africa and voted ‘Number One’, and ‘Coolest Banking’ brand in SA. Johannesburg-headquartered Absa - Amalgamated Banks of South Africa - is a subsidiary of the British-
MASSIVE FOOTPRINT
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“Absa, as the biggest retail bank, has a very strong footprint in the home loans market, but we have evolved from a pure mono line product house to looking for opportunities where we can support the bank. “Similarly on the commercial side we are working with the Absa Business Bank in the areas of business property, vehicles, and business interruption. Absa also has the biggest agricultural banking arm in South Africa with products including asset and crop cover.” The Bank and Insurer entity says Mr Van Staden, is
Absa Insurance Company
a “natural fit,” one bringing reciprocal and interlocking capabilities and opportunities. But if Bank-Insurer delivers advantages denied to the stand-alone insurer, it was not an instant fit. “When I joined in 2008 it was very much a case of the insurance being on the side, with the main focus on the banking. The good news is that over time this has changed, developing into a very nice collaborative environment. “We are now the third pillar in the banking accord. Today it’s very much an integrated culture of collaboration and ideas sharing, identification and opportunities.” One example is client segmentation - whether by product or earnings potential – an important strategy in the Banking operation. “It’s another area where we work with Bank, putting our products in areas they have
identified. “Historically we were very much product focused, but having diversified out of purely home loans and vehicle financing ,we believe it’s essential to understand our customers - and more specifically in the business bank and the consumer space. “We look at the customer’s earnings potential, and now we are starting to look at the life stages of a customer from maybe studying to entering work, building a family, to maybe retirement. “At each of these stages customers have specific financial needs; building capital, buying assets. Then you can clearly market insurance at the right points. “This again underlines the benefits of us working very closely with the Bank, understanding a lot more about the customer than a stand-alone insurer. If we look at our data showing how and where our customers spend their
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company profile money we can get a very good idea of the risk profile. “Another area where we can grow is through innovation, not quite cutting edge technology but taking full advantage of the Absa on-line banking platform which gives our customers great flexibility while taking pressure off our back office and our costs.
“There’s not a strong broker/ distribution force such as we know it in South Africa, so the place the customer trusts is his bank” “So if you are looking for ideas and opportunities, being part of a bank is an amazing place to be.” While Absa Insurance is strong in the house owner sector, it continues to look for all opportunities where it can leverage the banking relationship, says Mr Van Staden. A chartered accountant with an insurance background at Ernst and Young – South Africa and the UK - he joined Absa in 2008, becoming Managing
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Executive in 2012. ”You have an existing customer base and in many ways existing distribution channels, so a lot of our products are sold through the branch network. “More recently we have been leveraging the on-line banking platform so you can buy your insurance on your on-line banking profile. You can even log a claim, and we want to expand this self-service element a lot more. “The banking arm has an excellent tele-sales telemarketing space with several call centres. We are not strong on branding individual products or individual business units, but we leverage the Absa brand and the trust that goes with it. “Together with this great opportunity comes a big responsibility. The quality of our service is critical, and should we have a service failure it doesn’t put just our product and our customer at risk, but potentially several banking relationships – cheque, mortgage and investment accounts - also at risk. “And of course this has the same effect in reverse. If the banking side doesn’t deliver, we might lose a policy even if our performance had been faultless.”
Absa Insurance Company opportunities in East Africa around Kenya and Tanzania. And, says Mr Van Staden, “Where Barclay’s Bank has its footprint we want to follow. We see great growth and will be focusing very strongly in the next three years.” We returned to those Gauteng golf ball hailstones, the R2 billion industry bill, and the lessons such incidents can throw up. “Its constant improvements on the procurement side; how we can react better, save costs to avoid upping premiums.
THE WAKENING GIANT
AFRICA’S POTENTIAL EXCITES Three years ago Absa bought the Mozambican insurer Global Alliance Seguros. While lightly penetrated with insurance, the Mozambique market has been growing in significant double-digits, and across much of Africa Andries Van Staden sees significant opportunities for growth. “The South African market is similar to the rest of the world where specifically commercial rates are very set, and where at the moment, profits are very low. “So while we are cautious about our growth opportunity in South Africa because of the market, and with opportunities in-house that others may not have our strategy here is to focus 100 per cent on our bank assurance opportunities. We do very well and have a very good strike rate on the house owner side. “The exciting growth opportunity for us is Africa. Last year Absa bought out Barclay’s Africa subsidiaries and then listed under the name Barclay’s Africa Group, and this presents great opportunities for us in terms of existing customers and distribution platforms. “Acquiring the Barclay’s branch network has been hugely beneficial. There’s not a strong broker/ distribution force such as we know it in South Africa, so the place the customer trusts is his bank.” Absa Life, with subsidiaries in Botswana and Zambia and shortly to launch a Kenya licence, is looking at
“This is a people intensive business; you need people to speak to people. We believe in focusing on our customers, knowing their needs and how they operate - That’s where we can grow. “But it’s also on the IT side where there’s some really interesting developments to help customers self-serve. It’s a dynamic changing environment at the moment and it’s not going to stop for the next few years. “Absa has been a sleeping giant, and when the giant wakes up, it takes the insurance industry by storm. For me it is a great chance to see how I can leverage this opportunity and help this giant wake up. “The short term industry is very exhilarating and it’s great to be part of it. And yes, every day I’m excited to come to work.”
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