YOUR NEST FOR LIFE

The landscape in the insurance industry has changed over the past 21 years in terms of doing business with both government and the private sector. Lindsay King spoke to Sindiswa Myeza, Communications Manager of NestLife, to find out more.

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Many new insurance companies have been established since the advent of our democracy, going up against the big insurance giants which have been around for years. And a number of these ‘young’ companies, have despite the many challenges associated with starting up in this competitive industry, been successfully thriving in South Africa’s transformational economy.

Founded by entrepreneur Vusi Sithole, black-owned and -managed NestLife Assurance Corporation is a prime example of one such South African company that has weathered the storms amidst these challenging global economic times. Celebrating its 20th anniversary this year, we look back at the insurance industry over the past twenty years .

Being very much part of the struggles of the disadvantaged people of our country (mainly black people), Sithole set out a vision to leave a legacy through service in what he had grown to specialize in—insurance.

Sithole says, 20 years after he started his company, the understanding of insurance and the need for insurance is still lacking for the majority of South Africans.

And this is the space where companies such as NestLife can make a difference and contribute to the economy of South Africa in a manner that demonstrates the capability of black companies and contributions to job creation and skills development, says Sindiswa Myeza, Communications Manager for NestLife in an exclusive interview with Service magazine.

Please tell us how the landscape in the insurance industry has hanged over the past 20 years in terms of doing business with both government and the private sector?

Although the historic levels of development in South Africa’s insurance market is low, as wealth increases, the potential for growth in the industry grows exponentially. The industry is well developed and is financially sound and has grown into a worthy contributor to our economy. The industry’s compliance, governance and risk management is comparable to international first world developed markets. The industry has further grown into an innovative market, and has been compared to one of the most innovative in the world. Innovation has been paramount in order to address previous historic social incongruities in the market. The level of competition in the marketplace is high, although regulation has made it relatively challenging for the small to medium size insurers like NestLife. However, the industry presents healthy competition because medium-sized players and new players have the ability to enter the market. We flourished in this environment, notwithstanding the fact that we have faced historic challenges, being the only 100% black-owned insurer in South Africa. As affluence has increased, the entry level of new consumers in the market has increased, and the innovation of the market has developed to accommodate the demands of new entry level consumers. Increased consumer education is constantly required to ensure that new entrants into the market, reach the level of consumer education of the existing consumers. The regulatory environment of the industry is evolving. NestLife’s expansion of its footprint in the industry has been moulded by increased regulatory requirements and compliance therewith. NestLife has been proactive and aggressive in its strategy evolution to ensure that it progresses its position, and expands further into the market by being competitive and face up to competing with larger players in the market.

Looking at doing business in South Africa, what is the secret to your success?

Our unwavering vision to make a difference in the lives of ordinary people and leave a legacy for future generations has given us the edge. An unconscious driving force has been an attempt to fill in the gap in the dire need for role models and leadership prowess in the country. We also believe firmly that making a success of the day, provides us with the edge on tomorrow. We are the champions of our destiny. We have a winning spirit and portray it at all times. We believe in ourselves and our abilities to succeed. We have not left our success to fate, we work tirelessly to achieve our vision.

What has your experience been, doing business with Government over the past 20 years?

Working with government has not been easy. Firstly, from gaining recognition as a black organisation capable of delivering a specialised service (previously best known for white business). We had to break the stereotypes and work hard at proving ourselves from the little business we were fortunate to acquire. Government also runs at its own pace, most times too slow for business, and is riddled with bureaucracy. For small and emerging companies in South Africa, cash flow very soon becomes a challenge thus giving big business an edge. Government’s tender system has also been a challenge, together with the disregard of private sector business processes in some cases. The future has good promise though with the advent of the Ministry for Small to Medium enterprises, and the policy contributions of the Department of Trade and Industry and Economic Development.

What was the biggest breakthrough in your industry since the birth of our democracy?

The change in this industry has not been as quick as it should have been. Historical issues still have to be adequately and more efficiently addressed. Having said that, the changes in the regulatory environment and those particularly which will radically effect both the short- and long-term insurance industries, with the implementation of one Insurance Act is a notable breakthrough. The implementation of the Twin Peaks in 2017, and the changes in market conduct and prudential reporting, are also breakthroughs worth noting. Probably one of the most contentious industry changes, is the changes which are being effected in the assistance business space, and the introduction of a more regulated Micro-insurance space. This development will open up more opportunities for development to previously unregulated entrepreneurs who developed business from the demands of new entry level consumers who required financial products. Hopefully the effect will be to encourage these entrepreneurial spirits who are from previously disadvantaged backgrounds, to take on the challenge of running professional business and offering services to communities who are in most need of financial security. The changes hopefully will in fact start to address these social problems. This will be the biggest breakthrough if the industry is able to be successful herein—to ensure the improved well-being and quality of life of disadvantaged communities and consumers.

How does being strategy-focused benefit your clients and the company alike?

Being strategy focused simply means we are committed to the vision. Whatever actions we take must circle back to what we aim for whereby we strive to be recognised as the preferred partner that delivers value-adding solutions, through mutually beneficial relationships with our clients in our selected markets. Our promise to our clients is “Yours for life”…this is “being with you all the way” —and that equals relationships! We are committed in the growth and development of our clients at all times, as they have been committed to our brand over the past 20 years. We remain focused in ensuring that our clients always get the best from us, and this is the promise we aim to keep.

You have built up an impressive list of clients including trade unions, large corporations, retirement funds, brokers, employee benefits intermediaries, professional associations, parastatals and other government institutions. Can you tell us about breaking into these often traditional markets?

Doing business in any market is a challenge, we have accepted this fact and ran with it. We have identified a segment in the market that we wish to operate in and are focusing on that. We know very well what it means to penetrate markets that are deemed near impossible. We had to adapt, be flexible and innovative to capture the attention of our targeted markets. We’ve had to restructure our sales team to equip them with all necessary resources to take to the market. We’ve taken a specialized approach to enter the group sector. We’ve rebranded all our products to speak our value proposition, all in aim to truly live our values and promise to our clients. The industry giants do not make trading easy, but we are not deterred. In fact, we ask ourselves how far can we push forward to reach our vision and get to the desired goal of being a one billion rand company in 2021. Getting potential clients to take you serious about what you have to offer has been a challenge because of many reasons and the main one being, there were others before us. However, we understand our clients’ needs because of the thorough assessments and evaluation that we undergo when acquiring their business. This further highlights our business philosophy of being a relationship driven organization that is focused on growing our clients through mutually beneficiary engagement. Through continuous engagement and interaction with our market, we have identified a need for products that speak to individual needs. We continue to live up to our promise of being “Yours for life” at all times, for our clients.

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