AVBOB
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The AVBOB Group, consisting of AVBOB Insurance, AVBOB Funeral Service and AVBOB Industries is South Africa’s only mutual society that provides a one-stop funeral insurance and burial service solution. The Group is deeply rooted in South Africa with a history dating as far back as 1918. At this time it existed as a society in the form of a benevolent fund, or burial society, that happened to have the additional capacity to conduct funerals. Almost a century later, AVBOB continues to make affordable insurance available so that all people, whether rich or poor, are given access to a dignified and personal send off when such a time arrives. We asked CEO Frik Rademan to provide some background to the society’s formation, as it nears next year’s celebrations of a century of being woven into South African history. “We started in 1918,” he starts, “primarily because, at that time, many soldiers were returning from World War 1 and brought the Spanish Flu back with them, which meant that a lot of people died.” Rademan refers here to one of the worst viral epidemics of modern time, which by October 1918 had killed anywhere between 50 and 100 million worldwide, and more than half a million in South Africa alone. In response to the rising funeral numbers, and the resultant rising prices, the Afrikaanse Verbond was established, later to become Afrikaanse Verbond Begrafnis Onderneming Beperk, or the more workable AVBOB. “AVBOB was established when a couple of the poorer citizens came together and, working for nothing, strove to supply or make money available for a decent funeral,” Rademan tells us. “From then the group grew to where we are now, with 320 branches throughout South Africa as well as 23 in Namibia. We have 1.8 million policyholders which equates to 5.4 million lives insured, and offer the entire spectrum of funeral-related products and services.” AVBOB continues to build its family today, and fulfil the objective which was core to its establishment in 1918 of ensuring a dignified and respectful burial for each if its members. Next year will see it celebrate
a century of playing an integral part in the lives of South Africans, although as Rademan explains, even such a momentous occasion will play second fiddle to the needs of its policyholders. “We will have a centenary function in Pretoria on the 15th August next year, which will cater for almost 400 people, and we will also budget for allocated funds for all the regions throughout South Africa where we have people, in order that we can hold functions for each of these different provinces.” “Our intention is not to go overboard with parties and the like, however - we’d rather give the money to our policyholders and our employees. We are a mutual insurance company, and this is what differentiates us. As such we are owned by our policyholders and most important for us is to work for them. Over the past ten years we have declared R 8 billion of surplus profits to enhance their policy values, and we plan next year to declare a fifth exceptional bonus, which currently we expect to be worth R 2.5 billion in total. This will be the single biggest declaration to our policyholders to date.” “We have 7 300 loyal staff around the country and we want to ensure that we are rewarding them with a cash bonus, while we also wish to look after the pensioners and those people who have helped us throughout the last 100 years.” This outwardly benevolent approach is one which has also been applied to AVBOB’s sense of corporate responsibility. “Currently we are running a flagship project which sees us donating container libraries to underprivileged schools all around South Africa,” Rademan tells of its social investment program. Minister of Basic Education, Angie Motshekga, labelled AVBOB the single largest contributor of fully functional container libraries given to primary schools in South Africa, each of which is worth approximately R500 000 and comes with 2 500 books, to benefit thousands of learners. “The success of our involvement saw our original figure of 10 libraries increase to 50, of which we have so far provided 45,” Rademan explains. The delivery of the 50th and final library of this scheme next August will see the
project reach its end. In its place, the Avbob School Infrastructure Project was launched in July this year at the Joe Solomon Primary School in Heidedal with a value of R 280 million, and aims to provide the learners of nine beneficiaries in total with adequate classrooms in order to accommodate their large number of learners. The investment goes hand in hand with the National Development Plan that aims to eliminate poverty and reduce inequality by 2030. “We will rebuild and renovate nine schools in the nine provinces of South Africa in which we do business,” Rademan says. “It is an historic moment for AVBOB to be launching this project in Bloemfontein, because the society was established here in Mangaung on 15 August 1918.” Assistant general manager, Kebo Mosweusweu, added: “We at AVBOB strongly believe in uplifting the community and making sure that we equip it with the necessary facilities to succeed.” When pressed, Rademan identifies some key factors which have led to AVBOB’s dominance of the funeral insurance field. “We believe that we make it difficult for other players to compete with us; people come to us based on the value proposition,” he offers. “We believe that it is of critical importance that we stay on top of our niche market, and we must therefore be innovative in our products within the funeral market. We are able to offer a number of privileges based on the fact that we are mutual - free funerals, cash bonuses, a year’s premiums back after five years of payments, for example. There is huge competition around every corner, and so in a niche market it is imperative to be the market leader, which is where our mutual status yet again keeps us ahead of the rest.” The combination of these individual aspects has helped AVBOB to continue to excel in the midst of a harsh recent economic climate. “The economy has turned a little against us,” Rademan says, “and we have felt this particularly keenly in our business as we are at the lower end of the market - we work with the people who are losing their jobs, where mines and businesses are closing down.” Its annual report, however, underlined its resistance
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