2 MESSAGE FROM THE CHAIRMAN OF THE SANTAM BOARD · 2019. 12. 6. · Climate risk adaptation: Necessary and Possible, where we were a participant and active observer. We took the learnings

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TABLE OF CONTENTS

MESSAGE FROM THE CHAIRMAN OF THE SANTAM BOARDABOUT THIS REPORTWHO WE AREvAlUE ADDED STATEMENTGROUP STRUCTUREHOW THIS SUSTAINABIlITY REPORT IS STRUCTUREDMANAGING SUSTAINABIlITY AT SANTAMj SUSTAINING OUR ClIENT BASEk A SUSTAINED INTERMEDIARY BASEl A SUSTAINED SUPPlIER BASEm MAINTAINING AN ETHICAl CUlTURE AND MANAGING

ECONOMIC CRIMEn SOlUTIONS AlIGNED WITH SOCIAl AND

ENvIRONMENTAl NEEDSo HUMAN CAPITAlp EXTENDING INFlUENCE FOR THE BENEFIT OF SOCIETYq TRANSFORMATION INClUDING OWNERSHIP AND CONTROlr RESPONSIBlE INvESTMENTs MANAGING IMPACTS ON THE ENvIRONMENTGUIDE TO ABBREvIATIONS AND ACRONYMSENvIRONMENTAl REFERENCE lIST

GENERAl TERMSSANTAM TERMSOTHER TERMS

SOCIAl, ETHICS AND SUSTAINABIlITY COMMITTEE CHARTERANNEXURE 1: THE 10 UN GlOBAl CONTACT PRINCIPlESGRI TABlEEXECUTIvES AND DIRECTORS AS AT 28 FEBRUARY 2012

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969798

100103104115

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“SANTAM IS SERIOUS ABOUT CREATING AN

ETHICAl CUlTURE, WHICH WE BElIEvE

IS FUNDAMENTAl TO SUSTAINABIlITY.”

Other long-term commitments

toward sustainability include youth

development, especially by improving

living conditions in the communities

from which we draw our business

partners, employees and future clients.

For the people of Santam, sustain-

ability means “insurance, good and

proper” – and it has become the

only way that we can and will do

business. As Chairman, I recognise and

appreciate this approach for the way in

which it fosters integrity and a service

orientation approach.

I want to encourage all our stake-

holders to partner with us in working

towards a new year and a future that

will continue sustainably meeting the

needs of business, society and the

environment. Working towards a better

future are not simply words – they are a

social imperative for us all to aspire to.

Vusi Khanyile

Chairman

under considerable uncertainty. Under these conditions, and with a short-term insurance perspective, we are often in a position to identify trends at an early stage – a perspective that also offers us the opportunity to take a leading role in addressing such a trend.

One such instance is the concerning increase in economic crime in South Africa. These crimes have a direct impact on sustainability as they affect the financial viability of various businesses within the company. They also affect society and employee morale, business reputation and trustworthiness, and our relationships with business partners and regulators.

Santam is serious about creating an ethical culture, which we believe is fundamental to sustainability. We are vigilant in establishing proactive fraud prevention and detection initiatives. Where we find evidence of crime, we investigate and apply a zero tolerance approach. However, this remains an issue that demands an even higher level of stakeholder engagement, involvement and commitment – to the extent that we have to address

this as a nation.

Santam plays a leading role in the short-term insurance industry in South Africa. We endeavour to deliver and perform

beyond stakeholder expectations,

we invest in our people and we have

a strong cooperative approach when

the company has to deal with long-

term issues where many stakeholders

are involved. We have entrenched

these qualities in our business

philosophy and culture over time.

One of the things that struck me during

my first year as Chairman of the board

is how the principles of sustainability

underlie the entire company’s thinking,

planning and brand reputation.

It has been an internal approach

guiding our investment decisions and

risk profile and an outward approach.

This has been characterised by a

willingness to engage, consult and co-

operate with a number of institutions,

individuals and groups.

The sustainability agenda of most

South African companies was

dominated during 2011 by COP17 –

the United Nations’ Climate Change

Conference in Durban. At COP17 itself,

Santam partnered with the UNEP FI,

ClimateWise and the National Business

Initiative in offering a side event on:

Climate risk adaptation: Necessary and

Possible, where we were a participant

and active observer. We took the

learnings and insights from this major

global event and we will incorporate

these into Santam’s sustainability

initiatives in future. And, we will

continue actively exploring ways we can

make a positive difference to climate

change through the solutions we sell.

This is yet another example of how

Santam initiates, engages in,

assimilates and lives the principles

of sustainability in all its forms.

We continue to manage sustainability

according to the ten sustainability

components which are material to

the company. These are managed

according to clear policies and well-

defined strategies and targets. As a

board, we rely on the sustainability

committee (which will in future be

reconstituted as the social, ethics and

sustainability committee) for guidance

and reporting on these components.

These ten components are discussed

in detail later in this report.

We would like to thank Namane Magau,

ex-chairperson, for her commitment

and guidance. We welcome Dawn

Marole as the new chairperson of

our social, ethics and sustainability

committee. We are confident that under

her leadership, the committee will

continue to ensure the effective and

successful integration of sustainable

business practices into Santam – and

thereby ensure the sustainability of the

company and make a difference in

the environment in which we operate.

The mandate of the committee is to

minimise the risk associated with

social, economic and environmental

impacts, including those of stakeholder

activism and government regulation.

The committee adds value by

monitoring and guiding management

in considering stakeholders, regula-

tions and performance in the case of

each of the ten components.

As I mentioned in my Chairman’s

letter in our 2011 integrated report, we

operate in a very complex environment

M E S SAG E F R O M T H E C H A I R M A N O F T H E SA N TA M B OA R DM E S SAG E F R O M T H E C H A I R M A N O F T H E SA N TA M B OA R D

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Santam is the leading short-term insurer in South Africa with a market share of close to 23%, annualised gross written

premium of more than R17.7 billion

and assets of more than R18.8 billion.

The company operates in two

segments:

− Insurance activities – engaged in

commercial insurance, personal

insurance and alternative risks

− Investment activities – engaged

in all investment-related activities

undertaken by the company

Over the past two years the company

has made several acquisitions aligned

with its strategy of extending its

leadership position in the general

insurance segment in South Africa and

selected emerging markets.

Santam’s competitive advantage

derives from a national infrastructure

and strong intermediary network

which offer clients multiple points

of entry – clients can conduct their

business with Santam personally,

telephonically or electronically.

Our competitive offering is based

on financial discipline, our claims

management system, intellectual

capital and capacity and the reputation

of the Santam brand.

More than a brand

In 2011 Santam launched a revised

brand positioning and corporate

identity with a simplified and rational

message: “Insurance, good and

proper”.

We have worked purposefully to

change the perception of short-term

insurance as a grudge purchase to

one which is associated with peace

of mind and comfort. We believe that

insurance should add value to people’s

lives, not questions and uncertainty.

We recognise that our success comes

from understanding what is important

to our clients and approaching their

concerns with the expertise and

integrity which has become the

cornerstone of our company.

We see sustainability as a critical

part of doing insurance, good and

proper. Sustainability considerations

are integral to the way we go about

our business – as the rest of this

report demonstrates. Our material

sustainability issues table on page 10

gives a high-level view of how each of

our sustainability sub-issues

align with the six components of

our brand promise.

The Santam yellow umbrella embodies

who we are, where we come from

and where we are going. We are

proud of what we have achieved thus

far but remain intent on exceeding

expectations by delivering insurance,

good and proper.

StrategIc Intent

Our strategic intent is to retain and

extend our current leadership position

in the short-term industry in South

Africa while building our reputation

as an international leading general

insurance group in Africa and beyond.

InVeStMent caSe

Santam’s focus is on creating

shareholder value and the delivery of

superior returns – we approach this

within a sustainability framework that

aims to grow the company through

diversification, achieve sustainable

insurance margins and increase

capital efficiency.

Santam has a stable dividend policy.

We have reduced capital and paid

special dividends totalling R43.50 per

share over four of the past seven years.

A further special dividend of R8.50 per

share was declared by the board of

directors on 28 February 2012.

The company has a well-defined

and established risk appetite and an

optimised reinsurance programme by

means of which it retains more risk

for its own account.

Our sources of growth:

− Traditional intermediated business

– retaining our leadership position

− Specialist business – extending the

current footprint

− Affinity business – creating access

to new markets

− Direct – strategic growth phase

through MiWay, our direct

insurance subsidiary

− Santam Re – pursuing external

opportunities in South Africa and

developing markets

− International – partnering with

Sanlam and other financial

services groups in developing

markets

Sustainable margins for the business

are supported by our improvements

in efficiency and our investment in

technology. Santam is continuously

optimising processes and shared

services.

W H O W E A R E

This sustainability report encom-passes Santam’s sustainability-related activities for the period 1 January to 31 December 2011.

It covers the scope and operations

of our direct business units regarding

material issues. Our intermediary

partners operate their business

activities independently of Santam.

Therefore, we report only on those

matters that directly link our partners

to our business operations.

Our previous sustainability report

was for the period 1 January to

31 December 2010. There have been

no significant changes to the Santam

business that would affect our

reporting in the last year.

All data and statistics in this report

relate to Santam South Africa business

operations and exclude our Namibian

office. For example, our transformation

statistics relate to the Santam group,

including targeted subsidiaries. Our

carbon footprint data relates to the

Santam head office and five regional

offices but excludes offices that we

share with Sanlam.

Sanlam owns 57.54% of Santam and

publishes its own sustainability report

available at www.sanlam.co.za.

Our report is available online at

www.santam.co.za. However, a limited

number of copies have been printed

for distribution.

alIgnMent to the global reportIng InItIatIVe (grI)

Our sustainability report is informed

by the GRI (G3) reporting guidelines

and our GRI content index appears on

page 104. We are self-declared level

B compliant based on the information

contained in this report and the 2011

integrated report.

The disclosure of Santam’s material

financial and non-financial issues

throughout the 2011 sustainability

report and integrated report has been

guided by the International Integrated

Reporting Council’s (IIRC) discussion

paper on integrated reporting that was

launched in September 2011.

report aSSurance

In line with the incremental approach

recommended by the GRI, Santam has

not obtained a full independent third-

party assurance of this sustainability

report for the 2011 reporting period.

However, strategic statistical data

relating to transformation, broad-

based black economic empowerment

and our 2010 carbon footprint have

been independently assessed and

verified. Internal Audit conducted

a review in accordance with the

professional standards of the Institute

of Internal Auditors. Sufficient and

appropriate audit procedures were

conducted and evidence gathered to

support the conclusions reached and

contained in this report.

Their role was to focus on the overall

picture presented in the report and

not to verify every detail. This has

been done through an evaluation of

certain statements, ad hoc material

data, claims or assertions by the

company about its performance.

These evaluations have been signed

and verified by management. Their

conclusion is that, with regard to the

selected statements and data, there

is sufficient evidence to support

Santam’s claims regarding its

performance. Therefore, they believe

that this report offers stakeholders the

necessary basis to make considered

decisions about the company. The

assurance process will be expanded

to incorporate independent third-party

assurance in future.

Further InForMatIon

This sustainability report is the

primary source of our sustainability-

related information for the reporting

period 1 January to 31 December 2011.

Further sustainability-related

information is available in the relevant

sections of our 2011 integrated report

and on the Santam website

(www.santam.co.za).

More information about this report

or sustainability at Santam can be

obtained from Ray-ann Sedres –

Head: Integrated sustainability. You can

contact Ray-ann at ray-ann.sedres@

santam.co.za or 021 915 7135.

A B O U T T H I S R E P O R T

“WE SEE SUSTAINABIlITY AS A CRITICAl PART OF DOING

INSURANCE, GOOD AND PROPER.”

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Santam is a subsidiary of Sanlam Ltd. The Santam group has made investments in several subsidiaries and associates

as disclosed in note 44 of the full

set of annual financial statements

available on our website at

www.santam.co.za. The key

subsidiaries in the group are:

− Centriq Holdings (Pty) Ltd providing

alternative risk transfer and cell

captive insurance through its

subsidiaries

− MiWay Group Holdings (Pty) Ltd

providing direct insurance through

its subsidiaries

− Several investments in

underwriting managers providing

specialist insurance, including

Stalker Hutchison Admiral (Pty)

Ltd, Emerald Risk Transfer (Pty)

Ltd and Mirabilis Engineering

Underwriting Manager (Pty) Ltd

− Santam Namibia Ltd, a Namibian

insurance operation

− Indwe Broker Holdings (Pty) Ltd,

an insurance intermediary

G R O U P S T R U C T U R EV A L U E A D D E D S T A T E M E N T

group Group

2011 2010

VALUE ADDED r million R million

Gross written premium 17 707 15 855

Claims paid and cost of other services 14 759 13 398

2 948 2 457

Investment income net of fees 828 1 311

3 776 3 768

VALUE DISTRIBUTED

Employee benefits 1 706 1 332

Government 486 639

Direct taxation on income 450 532

STC 36 107

Providers of capital 1 677 1 205

3 869 3 176

Retained for reinvestment and future support of business (93) 592

Depreciation and amortisation of intangible assets 106 43

Retained income before transfer to reserves (340) 510

Compulsory reserves for future support of business 141 38

3 776 3 768

VA LU E D I S T R I B U T E D 2 0 1 0

EMPLOYEES

PROVIDERS OF CAPITAL

REINVESTMENT

GOVERNMENT

0

5

10

15

20

25

30

35

40

34.4

21.8

26.8

17.0%


EMPLOYEES


REINVESTMENT

GOVERNMENT

0

5

10

15

20

25

30

35

40

34.4

21.8

26.8

17.0%


EMPLOYEES


REINVESTMENT

GOVERNMENT

0

5

10

15

20

25

30

35

40

34.4

21.8

26.8

17.0%


EMPLOYEES


REINVESTMENT

GOVERNMENT

45.2 44.4

-2.5

12.9

-10

0

10

20

30

40

50

%


EMPLOYEES


REINVESTMENT

GOVERNMENT

45.2 44.4

-2.5

12.9

-10

0

10

20

30

40

50

%

SantamChief Executive Officer

IAN KIRK

MiWay Group Holdings

Chief executive: MiWayRENE OTTO

Specialist business

Executive headQUINTEN MATTHEW

Africa and East

Chief operating officerMERRICK OESCHGER

Group sourcing and procurement

Executive headEBRAHIM ASMAL

Broker distribution

Executive headEDWARD GIBBENS

Corporate services

Chief financial officerMACHIEL REYNEKE

Risk services

Executive headJOHN MELVILLE

Santam operations

Executive head: Claims servicesHENNIE NORTJE

Information technology

Chief information officerJAN DE KLERK

Market development

Executive headTEMBA MVUSI

People and brand

Executive headYEGS RAMIAH

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Santam’s approach to doing business is about doing sus-tainable business. We have served the short-term insurance

market since 1918. Our ability to

adapt to financial and non-financial

change for almost a century shows

that we understand what it takes to do

business sustainably.

Our long-term strategy includes

a thorough analysis of the full

spectrum of risks we are faced

with and a commitment to

respond to the concerns of those

stakeholders involved in, or affected

by, our business. Our approach to

environmental, social and governance

(ESG) risks and opportunities comes

from an appreciation of systemic risk

and the way this impacts Santam

as a company, our communities, the

country and the world we live in.

ESG issues and their opportunities

form part of our overall systemic

risk and enterprise risk management

processes. The investment we

make in understanding the long-

term significance of each risk and

our commitment to be responsive

to stakeholder concerns have kept

our business sustainable – and will

continue doing so into the future.

how we Manage SuStaInabIlIty

The board has delegated responsibility

for the implementation of our sustain-

ability strategy to a four-member

sustainability committee. This

committee meets quarterly to discuss

progress on the material issues

identified in our sustainability risk

log. Issues are discussed according

to an annual schedule of report

submissions. The chairman of the

sustainability committee then reports

on these issues to the board

of directors.

Our sustainability charter (page 100)

outlines our intention and approach

to sustainability. Various standards,

legislation and guidelines were used

as inputs in identifying our material

sustainability issues and in developing

our strategy and the sustainability

charter. These include:

− The King II and King III reports on

governance for South Africa

− The Financial Sector Charter and

the Department of Trade and

Industry’s Codes of Good Practice

for BBBEE

− The Global Reporting Initiative

sustainability reporting guidelines

− The JSE’s SRI index

This report is structured around our ten material sustainability issues. The report starts with an overview of how we manage

sustainability and lists the material

issues. Each material issue is analysed

and broken down into its component

sub-issues.

At the start of each chapter is a

table which can be used to link the

sub-issue to our brand promise and

our strategy business. This table

also summarises the regulations,

guidelines and our internal policies

which frame the issue. There is a focus

indicator (LOW, MEDIUM or HIGH) in the

table to indicate the issues’ relative

priority for 2011. All of the issues are

material to Santam; however, those

prioritised as HIGH are the ones

receiving the most attention.

A table listing the stakeholders

primarily affected by each sub-issue

is included in each section. This also

shows the ways in which we engage

with stakeholders, the key concerns

and our approach to incorporating

those concerns into our business

where possible.

We have listed our progress during

2011 for each sustainability issue,

against the aspirations stated in our

2010 sustainability report. We also

discuss the structures and processes

we have in place to address the

sub-issue, followed by a section

highlighting our achievements during

the year.

Finally, we close each section by

stating our aspirations for 2012

against which we will report in our

next sustainability report.

H O W T H I S S U S T A I N A B I L I T Y R E P O R T I S S T R U C T U R E D M A N A G I N G S U S T A I N A B I L I T Y A T S A N T A M

FroM leFt: dawn Marole, theMba gaMedZe, yegS raMIah and yVonne MuthIen

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M A N A G I N G S U S T A I N A B I L I T Y A T S A N T A MM A N A G I N G S U S T A I N A B I L I T Y A T S A N T A M

Issue Sub-issueFocus for 2011

the brand promise: Insurance, good and proper

Santamstrategy page

where to findinformationon thissubject in our Integrated report

j Sustaining our client base

Alignment of products, processes and initiatives to client needs and expectations

High We insure with certainty

Balancing growth and profit

16 Operational Overviews

Client satisfaction, retention and growth

High We insure with excellence

Operational Overviews

Client privacy and confidentiality

High We insure with integrity

Corporate Governance Report

k a sustained intermediary base

Maintaining equitable relationships with intermediaries


Developing relevant distribution models

26 Operational Overview; CEO Report

Growth in our black intermediary base


–

Impact of HIV/Aids on our intermediary base

Low We insure with integrity

–

Intermediary compliance with industry standards


CFO Report; Corporate Governance Report

l a sustained supplier base

Preferential procurement High We insure with integrity



Environment, health and safety in the supply chain

Medium We insure with integrity

Operational Overviews; Corporate Governance Report

Issue Sub-issueFocus for 2011

the brand promise: Insurance, good and proper

Santamstrategy page

where to findinformationon thissubject in our Integrated report

m Maintaining an ethical culture and managing economic crime

Application of ethical behaviour through the values process aimed at employees


Proactively managing risks, including emerging systemic risk

40 Corporate Governance Report

Management of economic crime


Corporate Governance Report

Management of ethical behaviour relating to advertising

Low We insure with integrity

–

n Solutions aligned with social and environmental needs

Growth in the emerging market High We insure with single-minded focus; we insure with integrity


48 CEO Report

Products fulfilling a growing environmental consciousness among consumers

Medium We insure properly

–

o human capital Attraction, retention and development of employees with emphasis on equity

High We insure with excellence

Focus on talent management

54 CEO Report

Impact of HIV/Aids on our workforce

Low We insure with integrity Achieving

operational and capital efficiencies

–

Employee wellness Medium We insure with integrity

–

Occupational health and safety Low We insure with integrity

–

p extending influence for the benefit of society

Aligning CSI initiatives with social, business, economic and environmental needs

Medium We insure properly; we insure with integrity


65 Chairman’s Report

Our broader socio-economic influence on society specifically through stakeholder engagement

High We insure with stature

Chairman’s Report; Corporate Governance Report

q transformation including ownership and control

BBBEE in line with dti CoGP and FSC codes



72 Chairman’s Report; CEO Report

r responsible investment

Direct investment to address social, economic and environmental needs

Medium We insure properly



s Managing impacts on the environment

Environmental risk management, feeding into products and solutions adapted for environmental change

High We insure with integrity Proactively

managing risks, including emerging systemic risk


Internal facilities management to support Santam’s environmental positioning

Medium We insure with integrity

Operational Overviews

Sustainability is driven at implemen-

tation level by its own business unit

whose head reports to the executive

head of market development to

ensure direct access to the executive

committee. Senior line managers

in each business operation monitor

sustainability components in their

functional areas. This is complemented

by functions dedicated to enterprise

development, environmental

management and stakeholder

relations.

The sustainability business unit

works closely with the enterprise risk

management and strategy units to

integrate sustainability practices into

Santam’s operations.

We invest in strategic projects on

an ongoing basis to enhance our

operations and contribute to the long-

term sustainability of the company.

One percent of gross premium income

is allocated to strategic projects

which include environmental, social,

technological and cost-efficiency

improvement projects.

Santam is also subject to a broad

range of legislation. Our approach to

complying with our legal obligations is

discussed in the Corporate Governance

report of our Integrated Report.

Specific information on how recent

and anticipated changes to legislation

and the ways these developments

impact our business can be found in

the Financial Director’s Report in the

same report.

our MaterIal SuStaInabIlIty ISSueS

We have identified ten sustainability

components which are material to

Santam. Each of these covers

a number of sub-issues – 24 areas in

total. These areas are allocated a focus

ranking, monitored in the sustainability

material issue log, and progress is

reported on these components at the

quarterly sustainability committee

meetings. The table below links these

ten components to the promises

we make in our brand strategy and

indicates how they align with our

overall business strategy.

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M A N A G I N G S U S T A I N A B I L I T Y A T S A N T A MM A N A G I N G S U S T A I N A B I L I T Y A T S A N T A M

especially black women-owned

businesses we source from.

− Continue to embed SBIDI (Santam

black intermediary development

initiative) with the aim to

improve our black intermediary

representation.

− Retain our top rating in the FIA

Broker survey in Commercial and

Corporate lines and regain our

top rating in the Personal lines

category.

− Improve our employment

equity score by increasing

black employees to 59% of total

employee complement.

indicators, 87 out of a possible

88 in social and 65 out of 65

for governance.

− Climate Change Leadership Award

(CCLA)

A winner of the CCLA

− South African Motor Body Repairers

Association (SAMBRA)

Insurer of the Year

− Financial Intermediary Association

(FIA) Awards 2011

Commercial lines and corporate

winner

− Sunday Times Top Brands

Business Category Award

− Financial Mail/Empowerdex Top

Empowerment Companies 2011

− Silver Loerie Award

Television and Cinema Short

Format Category for Best TV

Advertisement

a SuMMary oF our prIorItIeS For 2012

− Continue to take the insights from

the Eden Project and implement

practical applications.

− We will increase our engagement

with key stakeholders, such as

local governments, to promote

collaborative risk management on

the ground. Our overall preferential

procurement strategy is to source

mainly from level 4 BBBEE and

higher suppliers. Our current focus

is on increasing the proportion

of black-owned businesses and

The overall stakeholder engagement

process aligns with our commitment

to the AA1000 AccountAbility

Principles of:

− Inclusivity – we consider

the relevant concerns of key

stakeholders in our strategic

planning and risk management

processes.

− Materiality – our sustainability

committee and our risk

management processes determine

the materiality of issues that affect

us and impact our stakeholders.

− responsiveness – our dedicated

stakeholder engagement

function ensures that we monitor

stakeholder issues and adjust

our approach where required. We

communicate our performance

through channels such as our

integrated reporting processes, the

media, in internal publications and

on our website.

awardS 2011

− ACCA South Africa Awards for

Sustainability Reporting 2010

Best Sustainability Report for the

financial sector

− Johannesburg Stock Exchange:

SRI Index

Listed as one of six best

performers in the low

environmental impact category.

Scored 100% in environmental

periods of replacement car hire, which

saves costs while reducing carbon

emissions.

The financial aspects of the business

are covered in the 2011 integrated

report which contains a summary

of the sustainability issues. This

sustainability report expands on each

of the sustainability components and

highlights their financial connections.

StaKeholder engageMent

Component p relates to stakeholder

engagement and covers our high-level

strategic engagements in detail. Our

approach to stakeholder engagement

is linked to each of the sustainability

components. Stakeholders were

identified in 2009 through dedicated

workshops and categorised according

to importance and concerns that

were identified through an interactive

process. However, stakeholder

engagement is not a separate process

that operates outside our business

functions – we engage with operational

stakeholders through our day-to-day

business processes.

We interact with stakeholders in

a number of ways: relationship

managers and intermediary contact

centres interact with intermediaries,

quality assurance personnel visit

our motor body repair partners, and

client needs surveys and intermediary

feedback inform product development.

Insurance is a business built on

integrity – we sell a promise to be

there when things go wrong. Our

policyholders must be able to trust

that we will honour our commitments.

So it is not surprising that more than

half of the issues link to our goal of

insuring with integrity within our brand

promise to deliver insurance, good

and proper.

IntegratIon oF SuStaInabIlIty

The insurance industry offers one

of the clearest examples that non-

financial sustainability issues do not

stand apart from business issues.

Weather volatility due to climate

change affects the claims farmers

make on our agricultural policies.

Therefore, it makes business sense

to do what we can to make leading

agricultural research available to our

clients while we “do our bit” to reduce

our impact on the environment. We

work with local municipalities to assist

them with capacity building in risk and

disaster management planning to help

mitigate the risks of floods, fire and

storm-water damage; where these

result in less damage to property,

claims will be lower. Business

efficiency enhancements improve

turnaround times in claims handling.

This results in happier policyholders

who are more likely to recommend

our services which, in turn, grows

our business. It also means shorter

“OUR POlICYHOlDERS MUST BE ABlE TO TRUST THAT WE WIll HONOUR

OUR COMMITMENTS.”

ARE A thREAt to BUSINESS AND SocIEty. WE ADDRESS thESE thRoUGh coLLABoRAtIoN AND PARtNERShIPS WIth GoVERNMENt AND othER StAKEhoLDERS.

cLIMAtE RISKS

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“ClIENT EDUCATION IS AN IMPORTANT PART OF MANAGING

ClIENT EXPECTATIONS AND WE ARE EXTENSIvElY INvOlvED IN

SEvERAl RElEvANT INITIATIvES.”

j – S U S T A I N I N G O U R C L I E N T B A S E

We must offer products that meet the needs and expectations of our clients, while balancing business growth and profit to

grow our business sustainably. The short-term insurance industry is constantly evolving and highly competitive – products

tend to become rapidly commoditised and insurers need to be innovative to survive. We research client needs and market

trends to ensure we are able to keep offering relevant products while focusing on costs and distribution channels.

The need to attract and retain clients is a business imperative in an increasingly competitive short-term insurance market. To continue generating value for all our stakeholders sustainably, we need to attract new clients

while ensuring that we keep our clients – new and existing –

satisfied with our service and our products.

Our client-centric approach gives us a clear understanding

of the needs and expectations of our clients and groups

them into segments. Segmentation frameworks help us to

offer these segments the right products at the right price.

It also allows us to meet their service expectations while

achieving our internal value generation targets.

Client education is an important part of managing client

expectations and we are extensively involved in several

relevant initiatives. Most importantly, client satisfaction is

not possible if we do not safeguard the privacy of client

information where it comes into our possession.

Component objective To ensure continued profitable growth Santam needs to offer products that our clients want,

and to ensure that we meet their service expectations and protect their privacy

Component sub-issues − Alignment of products, processes and initiatives to client needs and expectations

− Client satisfaction, retention and growth

− Client privacy and confidentiality

alIgnMent oF productS, proceSSeS and InItIatIVeS to clIent needS and expectatIonS

Aligned to:

The brand promise:

Insurance, good and proper We insure with certainty

Strategy Balancing growth and profit

Regulations Short-term Insurance Act, Consumer Protection Act

Guidelines FSB’s Treating Customers Fairly Principles

Focus HIGH

Stakeholders engagement Key stakeholder concerns approach

Clients Contact centres, research,

surveys

The cover needed at

a reasonable price

Research client needs and

develop relevant products

StaKeholderS

regulatIonS and guIdelIneS

The FSB’s Treating Customers Fairly discussion paper lists six key outcomes which have the intention of protecting

consumers in a similar way as the Consumer Protection Act.

j – S U S T A I N I N G O U R C L I E N T B A S E

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j – S U S T A I N I N G O U R C L I E N T B A S Ej – S U S T A I N I N G O U R C L I E N T B A S E

− The claims card initiative introduced in 2011 has

assisted Claims Service’s to achieve one of its main

objectives, that is to have a client focused service. The

initiative affords the client the opportunity to replace

the claimed goods with what they would like at the

service provider of their choice. However, the added

benefit for the client is if he/she replaces the goods at

a Santam preferred supplier, they will automatically

earn cash back which will be transferred directly on

the claims card.

− Our ability to meet our clients’ needs and expectations

will ultimately reflect in conversion rates (how often

clients choose our products over our competitors’ once

we’ve quoted) and lapse rates (which reflect those

policies that clients do not review). In 2011, conversion

rates in personal lines business improved 15% and lapse

rates showed a 4% improvement, while commercial and

agricultural showed a 3% improvement in lapse rates.

hIghlIghtS In 2011

− Our multichannel distribution strategy continued to

evolve in 2011 and our clients can choose how to access

Santam products – through intermediaries, affinity

partners or through our direct channels (MiWay).

We acquired a number of new businesses during

2010 and 2011 that have strengthened our positioning.

More information about this can be found in the

integrated report.

− We gained insights from research into the small and

medium enterprises environment. This has led to the

design of an insurance solution for micro businesses

marketed through cooperation with partners.

− Our MultiBonus product was upgraded, the rating

revised and some value-added cover added without

additional costs. This product is especially suitable to

client segments wanting value for money and money

back as reward for not claiming.

conSuMer educatIon

An important part of meeting client expectations is to make

sure that clients have relevant information about short-term

insurance on which to base these expectations. Santam

sits on the Consumer Education committee of the South

African Insurance Association (SAIA) which runs various

education initiatives to communicate the value of short-term

insurance. Our entry-level market team is active in these

committee meetings to ensure that education takes place

in the areas where it is needed to develop new markets.

This is discussed further on page 48.

Santam also offers information about the industry and

its products through media releases and on its website,

including guidelines on how to select an intermediary.

Regulatory changes can sometimes lead to client confusion,

even among the most knowledgeable clients. The introduction

of the Consumer Protection Act had an impact on our

commercial clients. However, we ensured that they continued

to enjoy comprehensive and suitable cover by amending our

commercial liability sections to align with the requirements

of the Act. We also engaged in a comprehensive marketing

communications campaign to raise client awareness of their

increased risks, and intermediary awareness of the improved

cover Santam provides.

Outcome 2 directly applies to this sub-issue. We have

received and completed a readiness questionnaire that

relates to the issues raised by the discussion paper and

we look forward to interacting with the FSB to ensure full

compliance when the guidelines are gazetted.

how we Manage alIgnMent to clIent needS and expectatIonS

We group our clients into segments with similar

characteristics and then conduct comprehensive primary

and secondary research to establish client needs within the

various target segments. The understanding gained from this

research and benchmarking enables product development to

align our product range with identified needs.

These efforts ensure the design and development of client-

centric solutions which keep Santam relevant in a rapidly

changing competitive environment.

Representatives of the core business areas meet regularly

to discuss, among other things, changing client needs and

expectations as well as market trends.

Santam’s scientific pricing approach is one of our major

competitive advantages. This combines a variety of rating

factors to determine the price at which we are willing to

underwrite a particular risk, taking into account our own

cost structure and the price a willing buyer is prepared to

pay for a product.

We arrive at a fair price for each risk by balancing stake-

holder expectations regarding competitiveness, accuracy,

consistency, willingness to pay and adequacy of cover. In the

commoditised product environment, clients tend to choose

products primarily on price. To compete effectively in this

environment, Santam has over the past three years adopted

a more segmented risk profiling methodology which

ensures that premiums are aligned with individual

risk profiles.

Santam is continuously looking at improving cost-efficacy

through constantly refining processes and supplier

management. This is one of the ways in which we ensure

our competitive advantage among our peers in the industry.

Diversifying our distribution channels enables effective

distribution through the most suitable channels to each

target segment.

Our research also shows that short-term insurance clients

expect excellent service when claims are made. This is dealt

with in more detail in this section on page 20.

FSB Treating Customers Fairly discussion paper

Outcome 1: Consumers can be confident that they are dealing with firms where the fair treatment of customers is central to the corporate culture. This outcome is the consequence of Outcomes 2 to 6.

Outcome 2: Products and services marketed and sold in the retail market are designed to meet the needs of identified consumer groups and are targeted accordingly.

Outcome 3: Consumers are provided with clear information and are kept appropriately informed before, during and after the point of sale.

Outcome 4: Where consumers receive advice, the advice is suitable and takes account of their circumstances.

Outcome 5: Consumers are provided with products that perform as firms have led them to expect. And, the associated service is both of an acceptable standard and what they have been led to expect.

Outcome 6: Consumers do not face unreasonable post-sale barriers to changing product, switching provider, submitting a claim or making a complaint.

Case study: Emissions tax on vehicles

Government’s emissions tax on new motor vehicles came into effect from September 2010. The tax incentivises the

use of more fuel-efficient vehicles by taxing cars with larger engine sizes and poorer fuel efficiency. This added

approximately R5 000 to R10 000 to the cost of these vehicles. Clients claiming on cars bought before September 2010

will have a short-fall of this amount when they replace their vehicle. To offer relevant services to our clients, Santam

has altered our claims process so that our clients can still replace vehicles even where there is a shortfall due to the

Emissions Tax.

With products that align with our clients’ needs, we must ensure that we deliver on our brand promise to exceed the

expectations of our clients when quoting, handling client claims and addressing their concerns.

In an economic climate where many of our clients are under financial pressure, demonstrating the value of our products and

retaining clients is a key focus. Keeping clients satisfied is an essential part of retention.

clIent SatISFactIon, retentIon and growth

Aligned to:

The brand promise:

Insurance, good and proper We insure with excellence


Regulations Short-term Insurance Act and the Financial Advisory and

Intermediary Services (FAIS) Act

Guidelines FSB’s Treating Customers Fairly Principles

Focus HIGH

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Santam is represented on the board of the Ombud for Short-

Term Insurance (OSTI) and we understand the Ombud’s

process, its concerns and focus areas. As the leading

short-term insurer in South Africa it is our responsibility to

assist with and be represented on the Ombud’s board. We

work with the Ombudsman to facilitate the improvement of

processes to ensure a more efficient resolution procedure in

the OSTI office. It is in the ultimate interests of all our clients

that speedy resolutions are found for disputes and that

delays are avoided. It is equally important to understand

the principles of fairness and equity. We believe that our

engagement with the OSTI enhances our approach to the

fair treatment of our clients.

are analysed so that learnings can improve future product

strategy and client care processes.

Contact details for the client care business unit are printed

on each policy, on claims rejection letters, on company

brochures and are also available on the Santam website.

Performance at our Santam-SOS 24/7 emergency and

claims helpline and Immediate Resolution contact centres

is rated by intermediaries and clients on a scale of 1 to 10.

This gives contact centre employees an external benchmark

against which to measure themselves – and a way for

clients to rate our service. Agent ratings of six or lower

are automatically escalated and the client is contacted to

resolve their concerns.

claims handling and fraud are two of the main sources of

escalating costs for insurers.

We add value to our clients’ experience of claims settlement

in a number of ways. For example:

− through personal claims handlers;

− faster claims settlement on certain lifestyle items; and

− a lifetime guarantee on repair work.

clIent coMplaIntS

The client care business unit handles client complaints.

Clients communicate complaints through a number of ways.

These include:

− contact centres;

− the OSTI and FAIS Ombuds;

− the Santam website;

− consumer websites; and,

− increasingly, through social media.

Our primary goal is to resolve complaints immediately –

quick and constructive resolution of complaints can turn

a negative client experience into a positive one. But where

this is not possible, complaints are escalated for resolution.

Client complaints are also a valuable source of client

feedback and are used to pass information back to the

business.

Our distribution partners align with our process for

complaints resolution. As the underwriter we are ultimately

accountable for successful complaint resolution. Complaints


As mentioned previously, the Treating Customers Fairly

discussion paper (TCF) has named six key outcomes.

Outcome 5 is: Clients are provided with products that perform

as firms have led them to expect, and the associated service

is both of an acceptable standard and what they have been

led to expect.

Santam is part of the TCF pilot and is identifying the

requirements so that our policies and procedures will align

with it when it is finalised.

how we Manage clIent SatISFactIon, retentIon and growth

Our strategy balances the need to retain our established

core client base with excellent service and competitive

pricing, with profitable growth in new markets. Our growth

strategies in the emerging market and cross-selling are

more fully dealt with in the sections Solutions aligned with

social and environmental needs (page 48) and A sustained

intermediary base (page 26) respectively.

Keeping clients satisfied is key to retaining existing clients

and growing by referrals from satisfied clients. We interact

closely with our intermediaries through relationship

managers. They emphasise the benefit of keeping our

mutual clients happy and communicate intermediary

feedback to business units.

Excellent service not only keeps our clients happy, it

also saves us money – administration inefficiency in


Clients Contact centres,

intermediary feedback,

Voice of client survey

Process quotes and claims

effectively, quickly and fairly

Focus on quote and

claims efficiency, dispute

resolution procedures and

client profiling to ensure

correct pricing

Intermediaries Contact centres,

relationship manager

feedback

Process quotes and claims

effectively, quickly and fairly

Focus on quote and

claims efficiency, dispute

resolution procedures and

client profiling to ensure

correct pricing

Regulators, Ombud for

Short-term Insurance, FAIS

Ombud

Ad hoc interactions, SAIA Treat clients fairly Ethical business foundation,

focus on claims efficiency,

dispute resolution

procedures and correct

pricing

StaKeholderS

hIghlIghtS In 2011Complaint statistics for 2008 – 2011

Sources 2011 % 2010 % 2009 % 2008 %

OSTI 986 25% 1 042 43.91% 1 165 53.40% 1 195 55.20%

Non-OSTI 2 998 75% 1 331 56.09% 1 017 46.60% 970 44.80%

TOTAL 3 984 2 373 2 182 2 165

average number of complaints per month 332 197.75 181.83 180.42

category 2011 % 2010 % 2009 % 2008 %

General service 471 12% 256 10.79% 224 10.27% 200 9.24%

Policy admin/underwriting

complaints 651 16% 297 12.52% 246 11.27% 347 16.03%

Complaints about claims 2 833 71% 1 789 75.39% 1 684 77.18% 1 591 73.49%

Complaints by

intermediaries/trade

partners 29 1% 31 1.31% 28 1.28% 27 1.25%

total 3 984 2 373 2 182 2 165

what we SaId we would do In 2011

aspiration progress

Accurately measure our net promoter score (NPS) NPS was accurately measured and the information derived

has been implemented in our client service processes.

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Insurance is a business based on trust – our policyholders

pay their premiums every month and trust that we will be

there for them when they claim. They also trust us with their

personal information. We hold ourselves to the promise of

insurance, good and proper, indicating our commitment to

being reliable, dependable and trustworthy. Anything that

we do that goes against those principles negatively affects

our reputation and the way the market sees us. This impacts

our ability to grow profitably and sustainably.

We collect and store a great deal of personal information

about our clients. If we allow this information to be used by

− We handle more complaints internally than those

received from the Ombud for Short-term Insurance,

a trend that has been in place since 2010. Total

complaints received for the year increased 60% to 3 984.

It is important to note that we receive and handle

complaints in respect of Santam as insurer and

underwriter. The increased number of complaints

should be seen in the context of the total number of

policies written by the company. Santam complaints

represent less than 1% of policyholders and 1% of all

claims registered. Contributing factors to the increase in

complaints include an increase in client awareness, the

impact of the CPA and FSB Treating Customers Fairly

guidelines and the impact of social media networks.

− Turnaround time on client complaints has improved 23%

since 2009, including complaints received via the OSTI

which go through a much longer process to resolve.

Turnaround time on complaints received directly by

Santam has improved 73% since 2009.

− We are currently conducting a benchmark brand study

across all business units. The results are due early in

2012 and will be used to guide our future marketing

strategy.

− We introduced an internal arbitrator into the complaints

resolution process as from March 2011. If clients are

of the opinion that the complaint was not resolved to

their satisfaction, or the matter is a complex one, they

are given the option to escalate their complaint to the

arbitrator to offer a highly experienced opinion on claims

disputes. So far, 247 complaints have been referred

to the arbitrator. This option is proving a viable way of

resolving disputes for our clients in the shortest possible

time. This function is not a volume-driven environment

but rather a qualitative offering.

COMPLAINTS RECEIVED – OMBUD VS NON-OMBUD

OSTI

NON-OSTI

0

1 000

2 000

3 000

4 000

5 000

2008 2009 2010 2011

StaKeholderS


Policyholders In the normal course of

business

Do not share personal

information

By putting policies and

procedures in place to

protect the privacy of

personal information

Regulators Ad hoc interactions Keep client information

private

By putting policies and

procedures in place to

protect the privacy of

personal information

the protectIon oF perSonal InForMatIon bIll

The Protection of Personal Information Bill (PPI) is still under discussion and is expected to be released in 2012. The PPI

outlines eight key principles:

− Accountability

− Processing limitation

− Purpose specification

− Further processing limitation

− Information quality

− Openness

− Security safeguards

− Data participation

Failure to comply with these principles, once the Bill is enacted, could result in fines which will have a financial impact

on the company and an indirect impact on our reputation. Santam’s existing policies and procedures protect policyholder

information and these were evaluated and updated in 2010. The client information we hold in system databases was found

to be well protected – what is more difficult to control is the unstructured data that exists outside of these databases. Our

overall controls are currently being reviewed against the requirements of the PPI to determine if any changes are required.


aspiration progress

Implement stricter controls around information ownership

and flow within Santam

We continued to tighten our controls in 2011 by drafting

and implementing new policies and procedures, revising

our existing controls and through the projects we mention

below. There were no incidents of breach of confidentiality

breached recorded in 2011

someone else, it will erode our clients’ trust in us. Therefore,

preventing unauthorised access to personal policyholder

information is a priority for Santam.

The Santam board recognises its responsibility for

information technology (IT) governance and has an IT policy

in place as required by King III. This is discussed in greater

detail in the Corporate Governance section of the Integrated

Report.

clIent prIVacy and conFIdentIalIty

Aligned to:

The brand promise:

Insurance, good and proper We insure with integrity


Regulations Electronic Communications and Transactions Act

Guidelines King III

Santam policies Information Exchange Policy, Management of Critical

Information Policy

Focus HIGH

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how we Manage acceSS to InForMatIon

The important aspects of data privacy that need to be

considered are that:

− information is used for the stated purpose it was

gathered for;

− there are strong controls regulating access to, and the

use of, this information; and

− there are measures in place that protect the information

once it is drawn out of the database.

ManageMent coMMItMent

Santam’s information security committee is fully apprised of

the common law requirements and the PPI. The committee

approved the planned approach to ensure that we comply

with the Bill once enacted.

The information security committee provides strategic

direction for compliance with protecting client information.

The committee is chaired by the chief information officer

who reports to Exco. The head of information management

is responsible for the protection of information. Overall

access to data and privacy control is managed by the IT

business unit within Santam. The corporate legal business

unit assists by keeping management up to date on the

laws that apply to them and offers advice on the best ways

to comply with these laws. Information owners in each

division have been identified; with the head of information

management (chair) they form a forum where issues around

data privacy and progress towards full compliance with PPI

are discussed and managed.

educatIon

The legal compliance team highlights the sensitivity of

handling client information through:

− articles in our weekly employee newsletter

(Today@Santam);

− Compli-Alert, a newsletter to management is another

form of communication which we intend reviving in

2012; and

− targeted emails to employees who have access to

policyholder information.

SpecIFIc controlS

We have identified all processes that use client information

and the controls required to manage access for each

process.

Bulk extracts and exchange of client data with parties

external to Santam are authorised by a single senior person

within the IT business unit. This ensures that the data is

correctly tracked and that the distribution of data

is monitored.

We have also drawn up an identity and access management

risk treatment plan and an information classification

guide which will further improve the controls around

managing access to confidential information. We are in the

process of improving our policy and processes for access

management.

projectS

Safend, the tracking product mentioned in last year’s report

that monitors information and identifies possible breaches,

was successfully piloted and is now being rolled out across

the company. This software monitors the traffic of data

to and from user devices and will help identify possible

information theft scenarios.

j SuStaining our client baSe aSpIratIonS For 2012

Sub-issue

Alignment of products, processes and initiatives to

client needs and expectations

− Continue with our ongoing initiatives to align our business

offering to our client needs

− Specifically, to assist the agricultural sector in influencing

government to help subsistence farmers become commercial

farmers

− To assist these farmers to be sustainable by subsidising

premiums for them to mitigate risks by insuring their assets

and crops

Client satisfaction, retention and growth Refine processes to ensure that our client interactions continue

to align with the Treating Customers Fairly guidelines

Client privacy and confidentiality − Complete the rollout of Safend to all workstations in the

company

− Review and tighten access management processes and controls

for all systems

− Implement a PPI-focused project geared at further

understanding our client data centric processes and tightening

controls as required

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source and manage the majority of our policyholders.

Intermediaries also play a crucial role in implementing

other aspects of our strategy of profitable growth, such

as identifying new and emerging markets.

Santam also competes for the intermediaries’ business

with the aim of being their insurance provider of choice.

We do this by providing products that are best suited to

clients’ needs, at competitive prices and through business

models that enable the intermediary to grow. Intermediary

commission levels are regulated and standard across

the industry, while administration fees are not. This can

sometimes lead to difficult competitive conditions. We

choose to differentiate ourselves by providing superior

service, effective risk management and by focusing on

maintaining excellent relationships with our intermediaries.

Excellence in technical underwriting ability, business

acquisition, policy administration, claims handling and client

service also affect our relationship with our intermediaries.

When Santam’s service offering is combined with the

intermediaries’ ability, we are able to keep our mutual client

happy and meet their expectations. This ensures growth

for both businesses and improves the relationship between

the client and intermediary, and Santam and intermediary

– resulting in relationship excellence – the basis of a

sustainable and healthy business.

Intermediaries are key business partners and critical to the

sustainability of our business. In line with our promise to

insure with integrity, we are committed to doing business

in a way that balances the interests of our policyholders

and intermediaries with our own business goals. The

short-term insurance market is very competitive and gives

clients a wide range of options to choose from outside of

the traditional intermediary model. We are developing a

multichannel delivery approach to ensure that we remain

relevant to a broader market through distribution channels

such as:

− Traditional intermediated business – retaining our

leadership position

− Specialist business – extending the current footprint

− Affinity business – creating access to new markets

− Direct – strategic growth phase through MiWay, our

direct insurance subsidiary

− Santam Re – pursuing external opportunities in South

Africa and developing markets

− International – partnering with Sanlam and other

financial services groups in developing markets

These channels are essential for future growth and have

very little overlap with the market we service through our

intermediaries. Our core business will continue relying on

our network of approximately 4 000 intermediaries who

Intermediaries in the short-term insurance market are pressurised from many directions. Clients are becoming more demanding as competition continues to increase from traditional and non-traditional insurance providers,

and as clients become more knowledgeable about the

products they purchase. At the same time, the weak

business environment is causing the pool of commercial

clients to shrink.

These pressures directly affect intermediaries’ ability to

trade profitably. We believe that Santam can reduce some

of this pressure by providing excellent service at the right

price, while making it as easy as possible to do business

with us.

We encourage our intermediaries to support, and remain

loyal to, Santam by pursuing our goal of service excellence

and building individualised relationships with them.

k – A S U S T A I N E D I N T E R M E D I A R Y B A S Ek – A S U S T A I N E D I N T E R M E D I A R Y B A S E

Component objective Santam sells most of its insurance products through intermediaries that deal directly with

policyholders. To achieve profitable growth, we need to treat our intermediaries fairly,

invest in the future of the industry, understand potential impacts and ensure that our

intermediaries comply with industry standards.

Component sub-issues − Maintaining equitable relationships with intermediaries

− Grow our black intermediary base

− Impact of HIV/Aids on our intermediary base

− Intermediary compliance with industry standards

“INTERMEDIARIES ARE kEY BUSINESS PARTNERS

AND CRITICAl TO THE SUSTAINABIlITY OF OUR

BUSINESS.”

MaIntaInIng equItable relatIonShIpS wIth InterMedIarIeS

Aligned to:

The brand promise:


Strategy Developing relevant distribution models

Regulations Short-term Insurance Act, conflict of interest legislation

Guidelines FSB Treating Customers Fairly discussion paper

Santam policies Conflict of interests policy

Focus HIGH

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how we Manage relatIonShIpS wIth InterMedIarIeS

Intermediary relationships are developed over time. They

are built on trust and by being consistently visible in the

intermediary’s office, adding value to their businesses and

by enabling them to grow.

The responsibility for managing relationships with

intermediaries for the bulk of our policyholders falls

under the broker services department, part of the

broker distribution business unit. Due to the specialised

nature of the business, the portfolio management and

agriculture departments are the owners of the intermediary

relationship for their respective businesses.

Broker Services is split into 12 regions with two heads

managing the north and south respectively. This enables

clearer communication with intermediaries which

improves speed of decision-making and access to senior

management. Dedicated relationship managers (RMs)

interact directly with local intermediaries on a regular basis

to update them on product and service developments and

to obtain feedback on their service experience and market

developments.

Centralised contact centres provide support for services

such as the provision of quotes to intermediaries, policy

administration, renewals and claims processing for the

personal and commercial business departments.

The foundation for our relationship with intermediaries is

built on good governance and ethical business practices.

This means that our interactions must be managed in

the light of the conflict of interest legislation. This has

already resulted in certain changes to the way we interact

with intermediaries. For example, we previously invited

intermediaries to a single central conference where we

covered travel and accommodation expenses. This could

have resulted in the perception that a conflict of interest

existed. We now hold several smaller regional conferences

where accommodation and travel costs are

for intermediaries’ own account.


The Short-term Insurance Act regulates our relationship

with intermediaries and is enforced by the Financial

Services Board (FSB).

As mentioned previously, the FSB’s Treating Customers

Fairly discussion paper lists six key outcomes which have

the intention of protecting consumers in a similar way

as the Consumer Protection Act. We have received and

completed a readiness questionnaire and look forward to

interacting with the FSB to ensure full compliance once the

guidelines are finalised.


StaKeholderS


Intermediaries Intermediary surveys,

interactions with the

Financial Intermediary

Association (FIA), quarterly

Focus intermediary

magazine, regular

interactions through

relationship managers,

quarterly regional

intermediary forums,

intermediary conferences,

intermediary newsletters

Price products

competitively

Provide excellent service,

be it writing policies,

processing claims or

administration

Offer products that clients

want

We are consistently refining

our product portfolio and

pricing to make sure we

stay relevant to our market

while maintaining profit

margins.

We have processes in

place to incentivise service

excellence

Policyholders Client surveys, regular

interactions, complaints

lines, Ombud, regulators

Make sure intermediaries

act in policyholders’ best

interests and service quality

Ensuring the highest ethical

conduct, complying with

Short-term Insurance Act

and service excellence

Regulators such as the FSB Ad hoc interactions Treat clients fairly, treat

intermediaries fairly and

ethically and make sure

they are doing the same for

policyholders

Ensuring the highest ethical

conduct and complying with

Short-term Insurance Act


aspiration progress

We are developing models to differentiate intermediary

channels to better implement our multichannel approach.

We will pilot some of these models towards the end of the

first quarter of 2011

Ongoing initiative

We will repeat our popular intermediary conferences in

2011 in a slightly different format.

We replaced our annual intermediary conference with

several smaller regional conferences to make them more

accessible to regional intermediaries

We aim to continue improving what we offer our

intermediaries with expanded services for intermediaries

who support us.

We continue to support and develop intermediaries.

We will be paying particular attention to intermediaries

that take advantage of the flexibility offered by our

differentiated intermediary model.

Our differentiated intermediary model is now well

established and offers intermediaries a range of ways to

interact with Santam.

We will continue implementing our cross- and upselling

strategy. We will ensure that intermediaries are aware of

and use the entire Santam value proposition

Cross and upselling progressed well this year and an

internal cross-selling competition showed good results

FIa intermediary survey 2011 2010 2009

Personal category Runner-up Winner Winner

Commercial category Winner Winner Winner

Corporate category Winner Winner Winner

hIghlIghtS In 2011

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how we Manage the deVelopMent oF our blacK InterMedIary baSe

Our approach focuses on two key areas:

− Increasing the capacity of black intermediaries by

developing new black talent to enter the intermediary

field or the larger short-term insurance industry through

the Santam Black Intermediary Development Initiative

(SBIDI)

− Increasing the amount of business we do through

existing and new black intermediaries

SantaM blacK InterMedIary deVelopMent InItIatIVe (SbIdI)

SBIDI is a joint venture between the sustainability and

business development teams with the goal of actively

developing black intermediaries. SBIDI was launched

mid-2008 and has evolved over time.

The initiative takes promising black graduates (to date we

have trained 112 graduates) and gives them the training

they need to become successful short-term insurance

professionals with the long-term view of setting up their

own intermediary businesses.

The core of the initiative is a 10-month training programme

(which will be increased to 12 months in 2012) that covers:

− the short-term insurance industry;

− Santam personal and commercial product lines;

− business skills;

− career planning; and

− workplace experience with current intermediaries that

have been identified by RMs.

This programme is endorsed by the Insurance Sector

Education and Training Authority (INSETA)

IncreaSIng buSIneSS through blacK InterMedIarIeS

We are actively working to identify additional black

intermediaries who are not currently selling Santam

services. Our target is to have 500 black intermediaries

on our book by the end of 2012 (267 as at December 2011).

Santam will be placing further emphasis on our 2012

programme to realise it.

hIghlIghtS In 2011

Our SBIDI programme this year ran from March to

September in Johannesburg, Cape Town and Durban and

produced 31 graduates. This exceeded our target of 30.

Of the 2011 graduates, 11 (12 of 2010) are employed with

Santam either directly in our business, through other

graduate programmes, at intermediaries, or in the Sanlam

group. Six more graduates have been employed elsewhere.

Our primary measure of how well we are meeting the

needs of our intermediaries is the Financial Intermediary

Association (FIA) annual intermediary survey. The FIA

represents the bulk of South Africa’s intermediaries. We

are extremely proud that Santam was recognised by the

FIA as the Best Short-term Insurer in the corporate and

commercial categories for the third year in a row.

We recognise that our performance in the personal lines

category highlights areas for improvement and these will be

addressed in 2012.

By better meeting policyholders’ needs and expectations

we help our intermediaries to grow their business. The

relevance of our product offering and high levels of service

to clients is evidenced by the improvements in conversion

rates and lapse rates we mentioned in the section titled

Alignment of products, processes and initiatives to client needs

and expectations (page 48).

It is important that we grow the number of black intermediaries in our intermediary base. This will enable us to better align

our distribution network for future growth in the previously untapped emerging market. Developing black intermediaries is

also an important part of our approach to enterprise development and black economic empowerment.

StaKeholderS


Intermediaries Intermediary surveys,

interactions with the

Financial Intermediary

Association (FIA), quarterly

Focus intermediary

magazine, regular

interactions through

relationship managers,

quarterly regional

intermediary forums,

intermediary conferences

Help develop

a representative industry

Black intermediary

development programme

Government EEA submissions,

interactions via industry

bodies

Promote BBBEE within

the company and in our

industry

Black intermediary


Insurance industry Representation on SAIA Develop a representative

industry

Black intermediary



Our initiatives to develop and expand black intermediaries in the industry arise from a sound strategic rationale. We align

our approach with the enterprise development stipulations in the dti Code of Good Practice.


aspiration progress

Investigate the tied agent model Further investigation showed this model is not practical.

Funding graduates once they complete SBIDI training Due to legislative requirements we will not consider this

any longer.

Engaging more black intermediaries in the broader

financial industry to encourage them to cross-sell short-

term insurance

This is an ongoing initiative which will be driven by the

broker distribution business unit.

30 graduates targeted for 2011 31 graduates

160 intermediaries (existing and new) Engaged with 51 of the 160 intermediaries

“Santam’s SBIDI programme gave me a vast array of skills which I use on a daily basis and helped me mature as a

person. I have found the foundation of how the industry and its policies work and the ability to apply that knowledge to

real life situations invaluable. The programme helped me change my way of thinking from being simply black and white

to a more ‘greyish’ tint. It was the perfect platform to transform from a graduate into a working professional.”

Talieb Mohamed, Manager, O’Brien Financial Services

growth In our blacK InterMedIary baSe

Aligned to:

The brand promise:


Strategy Developing relevant distribution models

Regulations Broad-Based Black Economic Empowerment Act (BBBEEA)

Guidelines Enterprise development sections of the dti CoGP and

Financial Sector Charter

Santam policies Employment equity policy

Focus HIGH

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The Financial Advisory and Intermediary Services (FAIS)

Act requires financial service providers to meet the Fit and

Proper Requirements under the Act and this compliance

includes the writing of regulatory examinations. This is to

ensure that standards are upheld in the insurance industry

and consumers are offered professional advice and service.

Certain client-facing employees also need to meet FAIS

requirements.

how we Manage InterMedIary coMplIance wIth InduStry StandardS

FAIS compliance is managed by the skills development

team. Employees who fall under the FAIS Act are given

training to assist them to comply with the fit and proper

requirements of the Act. All employees who were required

to be FAIS compliant by April 2010 met this deadline.

Santam requires all primary employees that deal with

clients to write the mandatory regulatory exam.

We see our ability to assist our intermediaries in meeting

their statutory requirements as part of maintaining an

excellent relationship with our distribution network. Our

product training business unit provides external business

partners and intermediaries with training to assist them to

become FAIS accredited.

hIghlIghtS In 2011

Altogether 63% of clie

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2 MESSAGE FROM THE CHAIRMAN OF THE SANTAM BOARD · 2019. 12. 6. · Climate risk adaptation: Necessary and Possible, where we were a participant and active observer. We took the learnings