SHORT-TERM INSURANCE SUPPLEMENT
VANESSA OTTO-MENTZ Head: Group Strategy Unit, Santam
31 May 2019
CYCLONE IDAI AND THE IMPORTANCE OF RESILIENCE
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he vulnerability of developing African nations came under the spotlight again during the humanitarian tragedy caused by Cyclone Idai. At the time of writing, the cyclone and flooding had displaced 134 645 across Mozambique, Zimbabwe and Malawi, affected a total of 1 118 896 people, with a death toll of 820. Science is clear that climate change is causing more frequent – and more devastating – natural disasters like these. In the Southern African context, we know society faces several challenges: Increasing local risk levels due to climate change, lack of protection in terms of limited physical and institutional infrastructure, as well as a very low penetration of insurance cover. All of these taken together increases vulnerability and loss exposure for individuals, business and government. We’ve seen the impact of this over the last few years where South Africa was hit by a series of extreme weather events, for example the prolonged drought – the worst to hit in 100 years. It affected the country in numerous ways – some predictable, others less so. For example, we could predict farmers’ harvests would be at risk. A less obvious effect was the hardening ground causing walls and floors to crack. Another impact was rising tensions and small incidents of social unrest which, if the drought was prolonged, would most likely have exponentially worsened. It is vital that the global insurance industry takes its role as risk manager, risk carrier and investor seriously, given the uncertainty we face globally due to rising environmental, social and governance (ESG) risk. First and foremost as an industry, we must make our contribution to narrow the risk
protection gap by shifting our role to be more organisations should strive to do. We also need to influential in our advice and covers that protect give people the platforms to proactively innovate. our customers and society at large. That’s why, as a The Santam Safety Ideas Challenges does just that, group, Santam has chosen to play an integral part encouraging Insurtech and FinTech start-ups to in creating the ESG guide for the global insurance find sustainable solutions to the challenges South industry, which was launched at the 2019 PSI Africa collectively faces. (Principles for Sustainable Insurance) Allianz Event. Finally, working with decision-makers is vital. We know that the time to begin building the Supervisors and regulators are under pressure foundations for a sustainable future is now, in a to improve societal resilience, reduce disaster time of unpredictability, in reflecting on what and risk, reduce unemployment and improve poverty how we underwrite the transactions in our global statistics. We need to partner with them on this economy. We encourage all journey. By helping them to better participants in the general understand climate risk and the insurance sector to engage IT IS VITAL THAT THE sustainable ESG solutions required, with the guide, which is open be able to set national-level GLOBAL INSURANCE they’ll for public comment until 30 targets and incentivise the activity INDUSTRY TAKES June 2019. The ESG guide is necessary to reach these goals. We an opportunity to streamline are therefore delighted that South ITS ROLE AS RISK information requests and Africa’s Prudential Authority is MANAGER, RISK build knowledge within the engaging with the industry on the CARRIER AND insurance industry, making it Task Force for Climate-related easier for business partners to INVESTOR SERIOUSLY Financial Disclosures in relation carry out ESG due diligence on to the physical and transition risks clients and transactions. a changing climate implies for South Africa and the Through our role as partner, adviser and broader financial sector. community rebuilder, the insurance sector is Idai has shown, once again, that the world well positioned to play a role in helping society is changing, extreme weather events are become more resilient. Community partnerships increasing, and, as a global society, we’re woefully are also vital. We’ve seen the power of these underprepared for all their implications. As through Santam’s Partnership for Risk and insurers, we have the responsibility to protect Resilience (P4RR) Initiative, which equips some people’s lives. This means also protecting their of the country’s most vulnerable communities homes, businesses and other assets. Ultimately, our through disaster management training and role is to help people prepare for the worst and then resources. Partnering for sustainable development rebuild once it’s over. This means joining hands and is one of the global SDGs and something all building resilience in every way we can.
TAKING THE REINS AT IING
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ewly-appointed president Commenting on the industry, of the Insurance Institute of Graham notes that it’s a time of huge Northern Gauteng (IING), change. “New technology, a tough Natalie Graham, says the South economy and stringent regulatory African insurance industry must requirements are combining to create focus on training, transformation a highly challenging market right and service if it’s to now. The only weather the changes way we’re going to IING IS ABOUT buffeting the sector. move forward as an Graham, partner industry is to make GETTING of the broker channel sure that we evolve LIKE-MINDED at King Price – or, as our skills, offerings INSURANCE she’s known at King and service levels to Price, the queen of stay relevant to our PROFESSIONALS broker business – clients and society TOGETHER TO GO succeeds Santam’s at large. BEYOND SIMPLY Anton Coertzen at “IING is about IING. “My passion is getting likePUTTING IN THE service,” says Graham. minded insurance HOURS NEEDED TO “Anton’s tenure was professionals firmly focused on together to go EARN CPD POINTS training, and I’d like beyond simply to combine his legacy with my expertise putting in the hours needed to earn to create an organisation that’s relevant CPD points,” says Graham. “It’s to our members going forward.” about finding presenters who make
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our members think, and providing training on aspects we might not touch on very often – because you don’t know what you don’t know, until you do. And it’s also about sharing new experiences and insights that fundamentally change the way we think about insurance, and building a community within the industry.” Graham says she’s well-supported by a “vibrant and diverse” IING committee, which includes national brokers, smaller independent brokers, industry suppliers, and various insurers, with a combined total of more than 100 years’ experience in the industry. Some committee members, she notes, have been involved for years, and that’s experience she’s grateful to have on her side. But she’s also excited about the ‘newbies’ who were voted in this year. “Younger people bring a fresh perspective and teach us to look at
things differently. One person can’t manage everything, but collectively we’re a strong and confident team.” While most of Graham’s 21 years in the insurance industry have been in the broker space, she believes her experience across a range of disciplines – including claims, service, training, and even a brief stint as a motor accident loss adjuster – will stand her in good stead as she prepares to lead IING into the next two years.
Natalie Graham, President: Insurance Institute of Northern Gauteng
