1
SA
NTA
M
SU
STA
INA
BIL
ITY
RE
PO
RT
20
11
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
2456789
16263440
48
546572808394
969798
100103104115
3
SA
NTA
M
SU
STA
INA
BIL
ITY
RE
PO
RT
20
11
2
SA
NTA
M
SU
STA
INA
BIL
ITY
RE
PO
RT
20
11
“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
4 5
SA
NTA
M
SU
STA
INA
BIL
ITY
RE
PO
RT
20
11
SA
NTA
M
SU
STA
INA
BIL
ITY
RE
PO
RT
20
11
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.”
6 7
SA
NTA
M
SU
STA
INA
BIL
ITY
RE
PO
RT
20
11
SA
NTA
M
SU
STA
INA
BIL
ITY
RE
PO
RT
20
11
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%
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%
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%
VA LU E D I S T R I B U T E D 2 0 1 1
EMPLOYEES
PROVIDERS OF CAPITAL
REINVESTMENT
GOVERNMENT
45.2 44.4
-2.5
12.9
-10
0
10
20
30
40
50
%
VA LU E D I S T R I B U T E D 2 0 1 1
EMPLOYEES
PROVIDERS OF CAPITAL
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
9
SA
NTA
M
SU
STA
INA
BIL
ITY
RE
PO
RT
20
11
8
SA
NTA
M
SU
STA
INA
BIL
ITY
RE
PO
RT
20
11
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
10 11
SA
NTA
M
SU
STA
INA
BIL
ITY
RE
PO
RT
20
11
SA
NTA
M
SU
STA
INA
BIL
ITY
RE
PO
RT
20
11
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
High We insure with integrity
Developing relevant distribution models
26 Operational Overview; CEO Report
Growth in our black intermediary base
High We insure with integrity
–
Impact of HIV/Aids on our intermediary base
Low We insure with integrity
–
Intermediary compliance with industry standards
High We insure with integrity
CFO Report; Corporate Governance Report
l a sustained supplier base
Preferential procurement High We insure with integrity
Balancing growth and profit
34 Operational Overviews
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
High We insure with integrity
Proactively managing risks, including emerging systemic risk
40 Corporate Governance Report
Management of economic crime
High We insure with integrity
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
Balancing growth and profit
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
Proactively managing risks, including emerging systemic risk
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
High We insure with integrity
Balancing growth and profit
72 Chairman’s Report; CEO Report
r responsible investment
Direct investment to address social, economic and environmental needs
Medium We insure properly
Proactively managing risks, including emerging systemic risk
80 Operational Overviews
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
83 Operational Overviews
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.
12 13
SA
NTA
M
SU
STA
INA
BIL
ITY
RE
PO
RT
20
11
SA
NTA
M
SU
STA
INA
BIL
ITY
RE
PO
RT
20
11
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
16 17
SA
NTA
M
SU
STA
INA
BIL
ITY
RE
PO
RT
20
11
SA
NTA
M
SU
STA
INA
BIL
ITY
RE
PO
RT
20
11
“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
18 19
SA
NTA
M
SU
STA
INA
BIL
ITY
RE
PO
RT
20
11
SA
NTA
M
SU
STA
INA
BIL
ITY
RE
PO
RT
20
11
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
Strategy Balancing growth and profit
Regulations Short-term Insurance Act and the Financial Advisory and
Intermediary Services (FAIS) Act
Guidelines FSB’s Treating Customers Fairly Principles
Focus HIGH
20 21
SA
NTA
M
SU
STA
INA
BIL
ITY
RE
PO
RT
20
11
SA
NTA
M
SU
STA
INA
BIL
ITY
RE
PO
RT
20
11
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
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
regulatIonS and guIdelIneS
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
Stakeholders engagement Key stakeholder concerns approach
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.
22 23
SA
NTA
M
SU
STA
INA
BIL
ITY
RE
PO
RT
20
11
SA
NTA
M
SU
STA
INA
BIL
ITY
RE
PO
RT
20
11
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
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
Stakeholders engagement Key stakeholder concerns approach
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.
what we SaId we would do In 2011
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
Strategy Balancing growth and profit
Regulations Electronic Communications and Transactions Act
Guidelines King III
Santam policies Information Exchange Policy, Management of Critical
Information Policy
Focus HIGH
24 25
SA
NTA
M
SU
STA
INA
BIL
ITY
RE
PO
RT
20
11
SA
NTA
M
SU
STA
INA
BIL
ITY
RE
PO
RT
20
11
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
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
26 27
SA
NTA
M
SU
STA
INA
BIL
ITY
RE
PO
RT
20
11
SA
NTA
M
SU
STA
INA
BIL
ITY
RE
PO
RT
20
11
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:
Insurance, good and proper We insure with integrity
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
28 29
SA
NTA
M
SU
STA
INA
BIL
ITY
RE
PO
RT
20
11
SA
NTA
M
SU
STA
INA
BIL
ITY
RE
PO
RT
20
11
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.
regulatIonS and guIdelIneS
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.
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
StaKeholderS
Stakeholders engagement Key stakeholder concerns approach
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
what we SaId we would do In 2011
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
30 31
SA
NTA
M
SU
STA
INA
BIL
ITY
RE
PO
RT
20
11
SA
NTA
M
SU
STA
INA
BIL
ITY
RE
PO
RT
20
11
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
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
Stakeholders engagement Key stakeholder concerns approach
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
development programme
Insurance industry Representation on SAIA Develop a representative
industry
Black intermediary
development programme
regulatIonS and guIdelIneS
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.
what we SaId we would do In 2011
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:
Insurance, good and proper We insure with integrity
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
32 33
SA
NTA
M
SU
STA
INA
BIL
ITY
RE
PO
RT
20
11
SA
NTA
M
SU
STA
INA
BIL
ITY
RE
PO
RT
20
11
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
regulatIonS and guIdelIneS
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