Old Mutual Botswana

OPENING ACCESS TO INSURANCE FOR ALL BOTSWANA CONSUMERS AND COMPANIES

OLD MUTUAL BOTSWANA

FINANCE Old Mutual Botswana is on a mission to improve financial inclusion in the country, the well-established and respected firm embarking on education, diversification and digitisation to empower more people Writer: Tom Wadlow | Project Manager: Sam Love

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otswana, despite being home to a mature insurance sector with healthy competition, has a low insurance penetration rate.

Estimated to stand at around 2.8 percent, it falls well below the global average, the vast majority of the 400,000 or so formally employed Botswana adults not currently taking out a life or non-life insurance policy.

While the statistics may appear as cause for alarm, for companies such as Old Mutual Botswana, there is a huge opportunity to grow and provide crucial financial peace of mind to a great many more customers across the Southern African country.

“This is a significant opportunity for underwriters,” comments Gerald Randall, CEO of Old Mutual Botswana.

“In many cases insurance education is not well embedded, and this is a key focus for our business. By customers understanding the advantages of insurance, they are more likely to implement solutions for themselves and their assets.”

Old Mutual, established in Cape Town in 1845, has been in Botswana since 1994 and offers a wide range of short-term and group life insurance products with branches in Gaborone and Francistown – its products provide insurance services to personal, commercial and corporate clients.

Randall had been with the company in South Africa for several years before making the switch to head up the Botswana division at the start of 2019.

“I always planned to be involved in financial services,” he says. “My first interest was in investment and fund management and I worked in that line for several years. However, I never wanted to be a specialist and as such moved to various lines of business in financial services. “Managing the risk of our customers is the business I run now. I have been a Director of some of the Old Mutual Botswana companies for some time and was always eager to become more involved in the strategic execution in the business.

Africa Outlook issue 86 | 3

FMRe Property & Casualty is the most noticeable regional reinsurer in Southern Africa.

Besides the traditional segments of reinsurance, the company has a clear orientation towards underwriting of specialty lines of reinsurance in its selected markets.

As part of its market development, the company consistently leverages its expert knowledge and partnership with leading international underwriters to provide insights in risk management and technical training across Africa. The company’s growth in Botswana and the region is linked to the development of customer focused insurance products for emerging risks like cyber, liabilities and agricultural risks.

Key Financial Highlights Gross Written Premium (“GWP”) P160 million

Underwriting Margin 11% (Average for past 5 Years)

Total Assets - P170 million (≈50% Cash & Near Cash)

Domestic Botswana business contribution at 60% of GWP

Our target is to acheive P300 million by 2023.

This year’s projection is P200 million

The most profitable, most consistent reinsurer in earnings performance in southern africa

Fastest domestic market share development…

7th Floor, The Fairscape Precinct, Fairgounds P.O Box 47202, Gaborone, Botswana

T: +267 3934287/93/94 | E: fmre@fmre.co.bw

www.fmrepropertyandcasualty.co.bw

Current Markets 2020 Future Expansion Markets

OLD MUTUAL BOTSWANA

“When the opportunity became available to do so, I was eager to take it up. Old Mutual in Botswana is a wellknown brand and also well respected – I believe the business has great traction here already, but it still has tremendous prospect for growth.”

The education message is absolutely critical to realising this potential.

“Key to our values is to uplift the communities in which we operate,”

Randall continues. “As a business we firmly believe that financial education is the key to financial security. Old Mutual provides extensive financial education, free of charge, through media and online portals. In addition, we have a partnership with Botswana Saving Bank to deliver financial education to their customers.

“In fact, Old Mutual delivers financial education across all the territories in which we operate. As part of our

HOW IMPORTANT ARE PARTNER AND SUPPLIER RELATIONSHIPS TO THE SUCCESS OF YOUR BUSINESS? GERALD RANDALL: “Old Mutual predominantly focuses on companies as our customers.

Many of these are intermediated through brokers or other entities such as banks. Having strong relationships with our brokers and other business partners is key to our success.”

6 | Africa Outlook issue 86

Gerald Randall (right) shaking hands on an agreement with Botswana Savings Bank

Responsible Business agenda, Old Mutual will launch ‘Africa’s biggest classroom’ across the continent.

The objective is to provide financial education to every community to drive financial security and inclusion.”

Of course, such endeavours would be futile if Old Mutual Botswana did not have an uncompromising approach to the quality of its own service delivery.

FM REINSURANCE PROPERTY & CASUALTY BOTSWANA SPECIALTY REINSURANCE PRACTICE INTRODUCTION

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MRE Property & Casualty is a Gaborone based reinsurance company and one of the biggest regional reinsurers in Southern Africa. The reinsurer was established in Botswana in 2010 with a clear mandate to develop local reinsurance market and grow a significant African portfolio.

Besides the traditional segments of reinsurance, the business has a clear orientation towards underwriting of specialty lines of reinsurance in its selected markets.

SPECIALTY AREAS • Reinsurance Structuring • Specialised Liabilities • Risk Management • Agriculture • Actuarial • Pricing

CUSTOMER & SHAREHOLDER VALUE DELIVERY • Supporting product development & pricing • Consistent approach to underwriting • Evolving risk modelling capabilities • Supporting of new business opportunities and markets • Earnings protection in all lines of business

As part of its market development, the company consistently leverages its expert knowledge and partnerships with leading international underwriters to provide insights in risk management and technical training across Africa. The company’s growth in Botswana and the region is linked to the development of customer focused insurance products for emerging risks like cyber, liabilities and agricultural risks.

MAJOR MILESTONES • Average Y-o-Y Growth past 7 years at 30% CAGR making it the fastest growing reinsurance company in Africa • Average underwriting margin past 7 years 11.5% delivering one of the most profitable margins in the market as compared to peers across Africa.

• Proprietary Catastrophe Model for Botswana & Mozambique • One of the 1st African reinsurer to deliver a Cat & Pricing Model • Biggest claim settled US$3 million in 2019

T +267 3934287/93/94 | E fmre@fmre.co.bw | www.fmrepropertyandcasualty.co.bw

OLD MUTUAL BOTSWANA This is another differentiator, and a significant one according to the CEO, who realises the imperative to put the customer first as it is their risks that the company is managing.

MOVING WITH THE TIMES An unforeseen risk which has dominated the narrative in 2020 has been the coronavirus pandemic, a situation which Old Mutual was well prepared for and has responded to effectively to date.

For instance, in 2019 it started to enable more of its employees to work remotely, a move which has paid dividends given the events which have unfolded this year – and for Randall, the priority has very much been to keep staff and customers safe.

“We did not envisage the pandemic, but we realised that internationally the ways of working were changing and it was important to prepare for the ways staff and customers will want to work in the future,” he adds.

8 | Africa Outlook issue 86

“When the pandemic was declared, we had already been running a Crisis Management Committee for some weeks. Fortunately, this is not the first pandemic Old Mutual has had to deal with, and we were able to garner insights across the group from countries in West Africa who had been dealing with the likes of Ebola.

“As a priority we set the safety of our staff, broker partners and customers. We instituted health protocols early followed by business contingency processes – none of our staff have contracted COVID-19 and all staff have been enabled to work remotely.

“To our customers, we keep imploring them to remain vigilant and safe. We always have their best interest in mind. I can, however, give them comfort that their affairs remain in good hands with us. Our company has a very high solvency position and we will continue to manage their insurance prudently.”

Alexander Forbes Over the years, Alexander Forbes has built a sustainable and professional business relationship with Old Mutual.

As we know, a strong business relationship starts off with a good foundation. That is, people! We have had the opportunity and pleasure to state that the teams involved from both Alexander Forbes and Old Mutual have built such a strong connection that they are on a first name basis.

Business relations are connections between stakeholders and we at Alexander Forbes are proud to say that we have built a strong network between Old Mutual, ourselves and our clients. In addition, they have established a rapport with timely claim payments, ensuring that our mutual clients’ interests are always protected.

FINANCE

The Alexander Forbes preservation fund Introducing the Alexander Forbes Preservation Fund Why preserve? To build sufficient wealth to sustain you once you retire. If you fail to preserve, you not only forgo your savings (that you will lose due to tax), but also the returns these savings would have generated. Investment returns compound over time, turning even modest savings into sizeable amounts.

Tax benefit ■ A transfer to a preservation fund is tax exempt if you move your benefits from either a pension fund or a preservation fund.

■ Tax free investment growth.

Accessing your preservation fund You’re allowed one withdrawal up to 25% from your fund credit prior to age 50, after a waiting period of 12 months subsequent to your transfer into the fund, and the balance at retirement.

Contact us to learn more about this product.

Other terms and conditions will apply.

Alexander Forbes Financial Services Plot 203, Independence Avenue Independence Place Gaborone, Botswana Email: enquiries.botswana@aforbes.com Tel: +267 365 1948 or 365 1975 or 365 1983

■ At retirement you will be eligible to a 1/3 lump sum withdrawal.

Alexander Forbes Financial Services (Pty) Ltd is a licensed financial services provider (FSP 1177 and registration number 1969/018487/07).

20606-AF-Preservation-Fund-advert-2020-10-09.indd 1

2020/10/12 10:43

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Africa Outlook issue 86 | 9

OLD MUTUAL BOTSWANA

The pandemic has also highlighted the value of digitising services and processes wherever possible.

Randall details several examples of this in action at Old Mutual Botswana, including a project to create a Facebook ‘bot’ to communicate with its followers. On WhatsApp, the company has created a service whereby customers can access various services, including insurance claims.

A more comprehensive programme involves automation of numerous internal processes, formulated in a digital strategy and execution plan which is being rolled out across the organisation over the next three years and beyond.

“Our vision is to be the leading digitised insurer in Botswana,” Randall says. “This will change the way we engage with our broker partners and also how we engage with our customers. In most developed markets, underwriters have largely 10 | Africa Outlook issue 86

Kushatha Moswela, Managing Director, Short-Term Insurance. Kushatha joined Old Mutual South Africa in 2010 as an Actuarial Specialist on a Solvency II programme and was then seconded to London as an ORSA Subject Matter Expert. She returned to work closely with the Old Mutual leadership in South Africa as an Executive Assistant to the then OM South Africa CEO. Prior to joining Old Mutual, she was with KPMG Botswana and SA as an Actuarial Consultant

digitised, more from necessity as customers are demanding digitally enabled options. Eventually the trend will come to Botswana, and we will already be prepared when it does.”

And moving with the times also entails expanding product ranges in order to remain relevant.

Indeed, Old Mutual has always been a pioneer in providing specialised insurance in Botswana, its focus being on tourism, large industry and all forms of mining taking place in the country.

Now the company has expanded into the line of export credit insurance. This allows its customers not only to cover the products they export and import against physical loss or damage, but also secure payment for such products should they not be forthcoming.

Such developments leave Randall optimistic about what lies ahead for Botswana and the next chapter for Old Mutual in Botswana. Its ongoing

FINANCE

mission being to bring greater financial security and inclusion to the nation’s citizens and businesses.

For now, however, the priority is on navigating the current waves created by the pandemic.

Randall concludes: “We will focus on our customers and broker partners.

COVID-19 has had a significant impact on the economy and in turn all participants. It is essential that we work closely with them to weather the storm and make sure they walk away from this pandemic in the best position possible.”

Old Mutual Offices, Gaborone Branch

OLD MUTUAL BOTSWANA Tel: +267 399 5700 www.oldmutual.co.bw

Africa Outlook issue 86 | 11

OLD MUTUAL BOTSWANA Tel: +267 399 5700 www.oldmutual.co.bw PRODUCED BY AFRICA OUTLOOK MAGAZINE