Q&A with Tertius Stears: Group CEO of Sanlam Namibia
Inside Business Journalist, Edgar Brandt (EB), recently sat down with Tertius Stears (TS), for an in-depth look at Namibia’s insurance industry.
EB: What is your expectation for Sanlam Namibia’s operational profitability for the current financial year and how does this compare to previous years?
TS: No one could have seen Covid-19 happening and as a result no one could have planned for it. However, with that said, not all business units were impacted in the same way but we project that our total profits to be down by ± 20% to 30%. I must add however that the full impact of certain trends is still to be seen and these will still have an impact on total profits.
EB: What is Sanlam Namibia’s local market share and where do you envisage it in the next five years?
TS: Sanlam Namibia aims to be always in the top 3 in all the segments we compete depending on the maturity of segment. As Group, we will continue to grow selectively by way of our strategies of product innovation and superior client service to all clients and intermediaries.
EB: How has Sanlam Namibia been affected (if at all) by Covid-19 related claims?
TS: Contrary to what was expected, Covid-19 had limited impact on death claims. This could probably be attributed to fewer accidents and other illnesses. In terms of retrenchment benefits, we did see a spike in claims during July and August and expect that this might continue as more and more people continue to lose their jobs or experience salary cuts. We also experienced an increase in Employee Benefit claims. Though total claims remained within general expected norms, the uptake of new business was severely impacted and this will have a huge impact on our total profits.
EB: What were the major economic factors that impacted Sanlam Namibia’s performance this year?
TS: The overall slowdown in economic activity seen in a lower GDP, resulted in lower disposable income to individual and corporate clients which impacts their ability to spend and do any new business. Furthermore, volatile low returning equity markets and low interest rates lead to lower returns on saving and therefore less appetite to save in insurance related and other retail investment products. The reality remains that when faced with lower disposable income, the first thing people tend to cut is their insurance, despite the importance of having adequate insurance cover.
EB: How have Sanlam Namibia’s sales been impacted by the pandemic, amid social distancing, and what is your strategy to overcome any challenges? TS: The bulk of distribution or sales is generally done via face-to-face intermediated sales channels. This was severely impacted by the lockdown regulations which prevent the sales force from going out and meeting their clients. However as stated above, we introduced other ways of doing businesses, such as the e-signing capabilities which enabled clients to complete transactions from the comfort of their homes. Being a new initiative, this was initially met with some uncertainty and scepticism from some clients. We also had to manage the high-levels of uncertainty experienced by some of our clients in respect to their futures, which meant that a lot of clients were unwilling to make long-term financial commitments.
EB: How was Sanlam Namibia impacted by business interruption brought about by the State of Emergency and subsequent lockdowns?
TS: The lock-down mostly affected the way that we serve our clients and sell our products to them. Fear left clients and staff feeling uncertain and had many questions and queries on products and the impact of Covid-19. A way to counter this was to increase our communication with both clients and staff. We relied very heavily on social media and other electronic means of communication to reach our clients and had to be innovative in many instances to ensure clients knew everything that was happening that would have an impact on them. We made sure to offer relief to our clients and looked at each issue on a case by case basis to ensure we offered tailor-made solutions to them. I think this action alone further cemented trust from clients, which was much needed during this challenging time.
EB: In terms of leadership, what does it take to be a successful CEO of a financial sector company particularly during a global pandemic?
TS: The question remain as to how successful different strategies were. The most important aspect for me is to clearly understand the key business drivers and its interdependencies and to take real time decisions based on uncertain outcomes. If we have learned anything during this Covid-19 pandemic is that things can change and change very quickly. We had to throw all our plans out the window for this year and start again from scratch. We had to make big impacting decisions with very little time and we needed to learn a lot. I believe that qualities like adaptability, engaging for impact and decisiveness are qualities that will take one far especially in a time of a pandemic. You will not get all decisions right all the time and therefore need to adapt and change, if required in a calm way. The times we live in require urgency and we cannot wait to see how things will play out.
EB: What leadership qualities and techniques have you been forced to change or re-evaluate because of the global pandemic? TS: I would be lying if I said this pandemic was not a huge test and learning opportunity. I can honestly say everything I know about doing business was tested. However, I had to rethink many “historical truths” and understand more “why” than “what” were past outcomes. We also had to
keep up with the fast-changing environment. We often needed to make decisions without testing them first to see what will work and that, I think is an important leadership quality that every leader needs to learn.
EB: What is your overall impression of Namibia’s financial services sector, specifically the insurance industry?
TS: We are standing ahead of major changes and as an industry we will
have to find ways to reach and serve our clients more effectively and in a more cost-effective manner. Cost will be very important internally to the business but also in terms of our product costing to our clients. Capturing the youth market is
also something we are constantly working on. Young people often do not see the value of insurance. They also do not buy insurance in the traditional way that we’ve been selling it so we are forced to change with the times or go out of business.