SAIA Chairman’s Report 2009

Chairman’s Report

Introduction

It is an honour to present my Chairman’s Report to our members for the period under review.

I had served the SAIA for many years, as a Board member, as Deputy Chairman of the SAIA Board in 1999 and then Chairman from 2000 – 2007, at which time I stepped down from the Board when my term as Lloyd’s Representative came to an end. Having thoroughly enjoyed my previous period as SAIA Chairman, I was therefore excited when the SAIA Articles of Association were changed to allow me to again be appointed Chair of the association toward the end of 2008.

I realise that I have taken on an important responsibility in accepting this position at this time, and I am sure that I will enjoy addressing the many issues that our industry has to face in this uncertain and difficult operating environment.

Board priorities

During this reporting period the SAIA Board agreed to add Motor as the fourth area of focus of the SAIA for the reasons more fully set out in the introduction to this review. This is in addition to the three key focus areas of the SAIA strategy as identified in previous years, namely Legislation and regulation, Image and reputation and Transformation. The SAIA management and its activities have been restructured to accommodate the amended strategy. This seems to be working well thus far.

Changes and challenges

The global financial crisis is rapidly starting to have an effect on the economy of South Africa, and specifically the financial services industry, principally because of the fallout from the global credit crunch and the resulting lack of capital availability.

Issues

The issues facing us at present are:

Transformation

The uncertain future of the Financial Sector Charter provides a challenge for our industry. SAIA and its members have adhered to the requirements of the Charter since it was signed in October 2003. This was on the understanding that it would, if implemented correctly, have had a long-term positive effect on our industry. However, the Charter, after much deliberation, has still not been gazetted.

SAIA members are currently required to comply with the DTI Codes reporting, but, in case the Charter gets gazetted this year, we have advised our member companies to also report against the Charter. We are hoping for a quick and positive outcome on this front following the April 2009 elections.

Image and reputation

SAIA has established itself as an association of which our members can justifiably be proud. Importantly, we need to ensure that we continue to position the SAIA as an organisation which can enhance the image and reputation of the industry we serve. We are therefore in the process of drafting a new Image & Reputation Strategy to focus our efforts on adding value to our member companies and the industry at large.

The SAIA Board Committee: Image and Reputation had a facilitated strategy development session during March 2009 where the elements that should be included in the new strategy were identified. These include the promotion of a strong self regulated environment, adding consumers as an important SAIA stakeholder and continuing with stakeholder relationship and public relations strategies and initiatives, developing a targeted publicity campaign, expanding the reach of consumer education initiatives, developing an organised communication campaign which includes effective information sharing and following a targeted approach in building the SAIA ‘brand’/identity. Once approved, the elements of the new SAIA Image & Reputation Strategy will be implemented in the next reporting period.

In line with the new SAIA Image & Reputation Strategy the SAIA Board approved the reviewing of the SAIA Code of Good Business Practice and the new SAIA Consumer Education Strategy at its meeting on 26 November 2008.

SAIA is committed to providing valuable and sustainable financial education to the consumers of short-term insurance products and to the rest of the people of South Africa including lower income earners who have not yet had access to short-term insurance. With this in mind, the new SAIA Consumer Education Strategy enables SAIA, on behalf of its members, to continue with its consumer education efforts whether the Financial Sector Charter prevails or not, as participation in consumer education is now a requirement of SAIA membership. We are looking forward to many more positive results and personal success stories resulting from consumer education projects in future!

Other activities and successes during the reporting period include the establishment of the South African Insurance Crime Bureau as well as other crime and road safety initiatives.

Motor

Of specific concern are the difficulties that our industry is currently facing with regards to the motor insurance business.

The SAIA on behalf of its members have contributed immensely to the fight against crime and specifically vehicle crime in the recent past. Our initiatives led to a significant reduction in vehicle crime and that now needs to be kept under control. However, road safety has become an area of great concern. Arrive Alive reports that every day an average of 36 lives are lost on our roads. Of these, 15 are pedestrians and 3 are killed in taxi-related incidents. We believe that the figures are appalling and that it is high time that government and private industry get together to develop a national initiative to stop this carnage on our roads. South Africa can not afford to continue with the current appalling losses when something can be done to reduce the present unacceptable statistics.

In addition the increase in vehicle accidents and the reduction in new vehicle sales that we are experiencing will mean that motor insurers are facing tough times on their motor accounts.

Therefore we need to put in place initiatives to ensure that motor insurance remains available at an affordable price to the current and future policy holders of South African motor insurance.

Following a SAIA Board decision and for the reasons set out earlier, SAIA will play a role to improve road safety as a fourth strategic focus area. I am proud to announce that in the period under review SAIA and its members have already started to address this important issue by pledging an 8th annual donation to Business Against Crime South Africa to be used for crime fighting as well as to improve the safety on our roads. I believe this will have a positive impact on our industry as well as on the country at large but much work remains to be done to improve the situation.

Legislation & regulation

The Insurance Laws Amendment Act was tabled in Parliament during May 2008 with far-reaching consequences for the insurance industry. A great deal of work is still to be done in formulating regulations during the rest of 2009. We would like to thank our members for assisting us in putting together well-versed responses as our efforts to meet stringent deadlines placed extreme pressure on the SAIA’s workload.

Appreciation

I would like to extend the Association’s thanks to Mr Adam Samie, the previous Chairman of the SAIA Board. It has been a privilege to walk in the footsteps of a man who played such a significant role in the achievements of SAIA and who dedicated his time and efforts to overseeing the process of developing a new strategic focus for the SAIA and provided valuable input in the development of the Financial Sector Charter.

I also thank the SAIA Board members for their dedication, time, and effort, especially during these difficult times.

I believe that SAIA, although a small organisation, has a huge role to play in the wellbeing of the short-term insurance industry in general and its member companies in particular. SAIA’s success in this regard is due to the knowledge, skills and passion of the people of our member companies who sit on our committees and whose efforts often go unappreciated by their peers. I would like to thank each committee member for continuing to ensure the effectiveness of SAIA through active support and technical input.

Lastly, I would like to thank Barry Scott, the SAIA management team and the SAIA support staff members for their hard work, often under particularly difficult conditions in recent months. Without their contribution the SAIA would have been unable to execute its huge task so professionally.

Ronnie Napier
SAIA Board: Chairperson