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presented by

John Doe

Date hereSOUTH AFRICAN INSURANCE ASSOCIATION

presented by

Themba Palagangwe

07 February

2020

TRANSFORMATION AND

PROCUREMENT(Non-life Insurance Context)

NON-LIFE INSURANCE INDUSTRY STAKEHOLDER INTERDEPENDENCY

Conduit

Promotes economic inclusion

• Create economically active and sustainable society

• Present employment opportunities through the support of SMMEs

• Reduce of Gini-coefficient = decrease Inequality

Contributes to the country’s global competitiveness

WHY DOES TRANSFORMATION

MATTER?

• Increase business contribution to Gross Domestic Product (GDP) - High velocity of money.

• Improve the Social-Economic Measure – Less dependency on government grants.

• Increase Foreign Direct Investments - Reduced political risks

FINANCIAL SECTOR

TRANSFORMATION JOURNEY

Revised Targets• EME/QSE

suppliers

• BO suppliers

• BWO suppliers

Progressive target setting approach

INDUSTRY TRANSFORMATION

DRIVERS

• National Development Plan

– Development and support SMMEs to drive

economic growth.

– Support of labour intensive industries.

• 1st Parliament Report on Transformation of

the Financial Sector

– Non-life insurance seen as least transformed,

especially in supporting Black supplier.

– Focused on transformation of the motor

insurance procurement.

INDUSTRY TRANSFORMATION

DRIVERS…

• Sector Regulation

– Transformation plans submitted to the regulator.

– Transfer of data between the insurers and the

intermediary.

– Alignment of insurer and intermediaries

transformation strategies.

• Amended FSC

– Higher procurement targets

– Focus on EME, QSE and BO procurement

– Emphasis in Supplier Development under ESD

INDUSTRY TRANSFORMATION

DRIVERS…

• Shrinking procurement work

– New technology

• Safer cars leading to fewer accidents

• Concentration of work allocation due to availability

of technical skills – MBR Accreditation

– Adverse economic landscape

• Reduced disposable income leading to low market

penetration and high policy cancelation.

• Price increase leading to high write-off rate

(industry sustainability)

PROCUREMENT CHALLENGES

MOTOR CLAIMS ANALYSIS - 2018 Procurement Data

The report shows a split of 60:40 between in-warranty and out-of-

warranty claims procurement.

The reports shows that < 50% of the claims are settled though the

repair of the assets.

Allocation of Procurement remains > 50% in both in-warranty

and out-of-warranty claims.

• SAIA Board has identified and approved

Transformation as one of its key priorities.

• Members are encouraged to align with

industry objectives:

– Drive transformative inclusivity within their

organisations.

– Focus on support of SMMEs (Procurement

allocation).

– Development and support of Black MBRs –

ESD Programmes.

SAIA APPROACH

SAIA APPROACH…

Industry

initiatives

Influence the

FSC

Strategic

framework/en

gagements

• Identify

Industry

transformation

objectives and

focus areas

• Engagement

with MBR

industry

Associations

• Engagements

with other

industry bodies

• Industry ESD

Programme

• MBR

Certification

initiative

• Save-a-Car

• 3rd Party

insurance

engagements

• Identify and

incorporate the

industry

priorities in the

Scorecard

• Recommend

suitable

industry targets

INDUSTRY TRANSFORMATION AND SUSTAINABILITY

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presented by

John Doe

Date here

Thank you!

Contact: themba@saia.co.za