On 2 May, South Africa’s largest short term insurer Santam celebrated its centenary. This placed the company among an elite group of major corporates who have stood the test of time. In recognition of this feat, FAnews spoke to Mokaedi Dilotsotlhe – Executive Head: Brand at Santam – to find out how the company has changed through the years and what has stayed the same.
Building the brand
Santam was launched in 1918 and has been insuring risks ever since. When looking back at some of the highlights of the company, Dilotsotlhe said that there were some interesting changes the company has seen over the years.
“Santam has always been an advocate of being an early adopter when it comes to technology. In 1957, the company was one of the first insurers in the industry to use computers when underwriting risks. While this seems trivial now, the move was considered bold and ahead of its time in an age where people were unsure about the impact that technology would have on the industry,” said Dilotsotlhe.
However, possibly the biggest highlight of the company’s centenary was one that would make the company one of the most instantly recognisable brands in South Africa. Dilotsotlhe pointed out that Santam adopted its iconic umbrella logo in 1981 and has not discarded it ever since.
“There has been a lot of focus on the brand that Santam has built and the role that the logo has played in our brand. While the logo has gone through some changes, it remains part of the company. It means a lot to us because the umbrella has a special significance in the insurance industry,” said Dilotsotlhe.
Establishing a legacy
The company was initially launched in the wake of the impoverishing South African War at the turn of the 20th century.
Over the years, the company slowly built a reputation as a short term insurer and became one of the biggest short term insurers in the country by the 1990s. However, in 1999, the company acquired Guardian National Insurance which catapulted the company into the country’s largest insurer.
“This was a significant move for the company. Up until that stage, Santam was largely focused on personal lines insurance. However, it felt that it had a role to play when it came to commercial insurance and took the decision to work towards this,” said Dilotsotlhe.
As the world changed, Santam also needed to change. After operating with a purely intermediated business model for many years, the company came to terms with the role of direct insurance and the impact that it would have on the South African insurance industry. Dilotsotlhe said that a relatively recent highlight of the company was the acquisition of MiWay Insurance which made sure that Santam was a fully diversified insurer.
A new way of thinking
As time moved on, the world became more advanced. Technology is having a major impact on how the world defines itself, and the financial services industry is no different.
This has forced insurers to sit down and reassess their distribution models taking into account that some clients simply want to do things themselves. “Santam has realised this and has had to reposition itself to take these requirements into account. However, we find that when it comes to complex claims, clients still want to deal with a broker. So there is still a bright future ahead for the intermediated model of insurance,” said Dilotsotlhe.
The highs and the lows
Like all companies, Santam has experienced years of profit as well as years of challenges.
In terms of claims, 2017 was a year that Santam found extremely challenging. The Knysna Fires and the storms in Johannesburg and Durban came together to make a potent mixture that saw some insurers experience a year where they paid the most claims in their history. Santam was no different.
Dilotsotlhe pointed out that the company paid over R1 billion in claims. However, he pointed out that the company stuck to the fundamentals of insurance and made sure that all legitimate claims were paid within a reasonable time frame.
“If you look at the Santam model, the company has a lot of businesses sectors. All of these sectors are never profitable or face periods of high claims at exactly the same time. This balanced the company and made sure that even though it paid out a lot in terms of claims last year, it still had sufficient reserves,” said Dilotsotlhe.
Dilotsotlhe pointed out that one of the trends that Santam has noticed is that there is a skills shortage in the industry which needs to be resolved as a matter of importance. Santam has recently established its Skills Development Academy which takes 110 learners and provides them with skills such as underwriting and other skills which are needed in the industry.
“Initially, 20 learners will go through a graduate programme while 90 students will go through learnership programmes. Some of these skills will be brought back into the company where we will nurture the talent that we develop. This is important because younger clients are not only looking at an insurer’s product offering, but also at what the insurer is doing from a corporate social responsibility perspective. It’s about more than profit these days,” said Dilotsotlhe.
Article credit https://www.fanews.co.za/article/company-news-results/1/santam/1048/a-century-of-covering-risks/24314