Sizwe’s new CEO is out to woo younger mem­bers

Sunday Times - - Business News - By REA KHOABANE

● Forty-year-old med­i­cal aid scheme Sizwe is look­ing for­ward to a fresh dawn as its new prin­ci­pal ex­ec­u­tive of­fi­cer, Dr Si­mon Mangcwatywa — who is also 40 — un­veils plans to at­tract young black pro­fes­sion­als.

The scheme was founded in 1978 by a group of black doc­tors, led by the late Dr Nthato Mot­lana, to as­sist black peo­ple who were unin­sured.

“Our mem­bers run from what peo­ple would call your blue-col­lar worker all the way to your ex­ec­u­tive worker in a cor­po­rate,” said Mangcwatywa.

“How­ever, our mem­bers thus far have been your tra­di­tion­ally blue-col­lar work­ers; these are peo­ple who are fac­tory-level and these mem­bers have sus­tained us through­out the years.”

He said the med­i­cal aid planned to tar­get a new mar­ket that is young, vi­brant and healthy — no mat­ter what sec­tor they work in.

“The over­all strat­egy is that we need more young peo­ple to join the scheme, and the hos­pi­tal plan is cru­cial to that.

“It’s not the only op­tion, as we have other vi­brant op­tions that the youth might find more ap­peal­ing and more at­trac­tive. [But] the hos­pi­tal plan is a huge fo­cus for the scheme for next year.”

The mar­ket of the fu­ture de­mands that the com­pany look to a younger de­mo­graphic “with­out for­get­ting the mem­bers that have sus­tained us through­out the years”, he said.

Ac­cord­ing to War­wick Bam, an an­a­lyst at Av­ior, es­tab­lish­ing a bal­anced age de­mo­graphic for a med­i­cal scheme is be­com­ing in­creas­ingly dif­fi­cult due to high youth un­em­ploy­ment rates and the in­creas­ing costs of ba­sic med­i­cal scheme ben­e­fit op­tions. Ben­e­fit op­tions are re­quired by leg­is­la­tion to meet pre­scribed min­i­mum ben­e­fits, which lim­its med­i­cal schemes in their abil­ity to de­sign low-cost prod­ucts.

“Most med­i­cal aids of­fer an op­tion with re­stricted ser­vice providers with a slid­ing scale con­tri­bu­tion rate de­pen­dent on your in­come bracket.

“These op­tions are de­signed for younger peo­ple and of­ten pro­vide a bal­ance of ben­e­fits in ad­di­tion to pure hos­pi­tal cover,” said Bam. Pic­ture: Masi Losi

Aware of the eco­nomic dif­fi­cul­ties the coun­try is fac­ing and high un­em­ploy­ment among young South Africans, Mangcwatywa said Sizwe would look at a pro­file of a young per­son who has just grad­u­ated and is look­ing for a job in a big, es­tab­lished com­pany.

But the dif­fi­culty in tar­get­ing mil­len­ni­als is that most of those who qual­ify for med­i­cal aid are work­ing for smaller firms that don’t of­fer a health plan, he said.

To meet these chal­lenges, Mangcwatywa said, “we’re go­ing to in­tro­duce other plans that we think will shake the mar­ket. They will be unique enough for us to grow the mar­ket among young peo­ple and at­tract them to the scheme.”

Sizwe Med­i­cal Fund will be re­branded to ap­peal to the young mar­ket. “Re­brand­ing is im­por­tant with­out for­get­ting our his­tory and our legacy. We are rather build­ing on that legacy,” said Mangcwatywa.

Cur­rently Sizwe Med­i­cal Aid has 47 037 mem­bers, of whom 6 367 are di­rect-pay­ing mem­bers.

South Africa has 83 pri­vate med­i­cal schemes. Ac­cord­ing to statu­tory re­quire­ment, med­i­cal aids have to main­tain 25% sol­vency rates in terms of their re­serves.

Mangcwatywa said Sizwe had a sol­vency ra­tio of well over 50%, “giv­ing as­sur­ance to the mar­ket, stake­hold­ers, bro­kers that we are fi­nan­cially a sta­ble com­pany, and that re­sults in over R1-bil­lion in re­serves — and not many com­pa­nies can boast that”.

Born in Sa­sol­burg in the Free State, Mangcwatywa has an MBChB from the Univer­sity of Cape Town.

He was pre­vi­ously med­i­cal di­rec­tor at JSE-listed Ad­cock In­gram.

We need more young peo­ple to join the scheme, and the hos­pi­tal plan is cru­cial to that Si­mon Mangcwatywa Prin­ci­pal ex­ec­u­tive of­fi­cer of Sizwe Med­i­cal Fund

Dr Si­mon Mangcwatywa of Sizwe Med­i­cal Fund.

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