CORPORATE PLAN AND BUDGET 2021 - 2022 - Parliamentary Monitoring Group
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C O R P O R AT E P L A N
AND BUDGET
2021 - 2022CONTENTS
1. Introduction and History of Sasria. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
2. Purpose of Sasria. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
3. Core Values. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
4. Mandates.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
5. Operating Principles.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
6. Business Model. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
7. Delegations of Authority. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
8. Governance Framework.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
9. Organisational Structure.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
10. Financial Resources Income. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
11. Dividend Policy. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
12. Borrowing Plan. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
13. Risk Management.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
14. Environmental Analysis.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
15. SWOT Analysis.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
16. Future Outlook.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
17. Vision 2024. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
18. Strategic Framework. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
19. Purpose and Vision. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
20. Mission.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
21. Strategic Pillars.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
22. Strategic Outcome-Oriented Goals. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
23. Key Strategic & Financial Assumptions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
24. Alignment of Strategic Objectives to the National Development Plan. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
25. Supporting Documents. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
26. Strategic Objectives. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
27. Implementation Process. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
28. Key Performance Indicators and Target-Setting.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
29. Corporate Key Performance Indicators. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
30. Departmental Plan Compilation, Review and Integration. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
31. Strategic Objective Ownership. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
32. ANNEXURE 1: SIGNIFICANCE & MATERIALITY FRAMEWORK. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
33. ANNEXURE 2: FINANCIAL PLAN. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
34. ANNEXURE 3: TOP 10 RISK REGISTER. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
35. ANNEXURE 4: FRAUD PREVENTION PLAN. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
36. ANNEXURE 5: DIRECTORSHIPS: M. M. NGOASHENG. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64
3PAR T A
S T R AT E G I C E N V I R O N M E N T
AND RESPONSES1. INTRODUCTION AND HISTORY OF SASRIA
Sasria SOC Limited (Sasria) is a public enterprise listed under Schedule 3B of the Public Finance Management Act No. 1 of 1999. It
is a Short-Term Insurance Company that provides coverage for damage caused by special risks such as politically politically/non-
politically motivated malicious acts, riots, strikes, terrorism and public disorders.
During the 1976 Soweto uprisings, the Short-Term Insurance Industry decided that it could no longer underwrite losses arising from
politically motivated acts of civil disobedience and unrest of the time as the risk was too high and it was difficult, if not impossible,
to purchase reinsurance cover. This resulted in the incorporation of the South African Special Risk Insurance Association (SASRIA) as a
Section 21 Company under the old Companies Act (No. 61 of 1973).
The operational structure of Sasria comprised a membership network pool that included all registered Short-Term Insurance
Companies that underwrite the fire peril.
Section 6 of the Finance Act No. 94 of 1978 empowered the then Minister of Finance to enter into a Reinsurance Contract with Sasria
as a Stop Loss Re-insurer. This Section also afforded a monopoly to Sasria as the only Insurer with authority to underwrite political
perils in the Republic of South Africa. The Reinsurance of Material Damage and Losses Act No. 56 of 1989 had the same effect as
Section 6 of the Finance Act 94 of 1978.
In terms of Section 10 (i) (t) of the Income Tax Act No. 58 of 1962, Sasria was exempted from paying tax from the date of
incorporation. This Section was however repealed, and from January 1996 Sasria became a tax-paying entity.
Financially, Sasria started with a zero base. Due to lack of worldwide reinsurance coverage, it was reinsured to a limited extent by
the Members of Sasria. In addition, the stop loss coverage afforded by Government gave cover in excess of Sasria’s reserves and
reinsurances in an unlimited amount. Initial rates were agreed with the industry as the risks which Sasria covers were actuarially
considered to be uninsurable.
At the time, the mission statement was to underwrite any perils that the conventional insurance market was unwilling or unable to
underwrite. Consequently, the perils of Sasria were expanded and encapsulated in the Reinsurance of Material Damage and Losses
Act No. 56 of 1989 read in conjunction with the Conversion of Sasria Act No. 134 of 1998.
From the mid 1980’s to date, Sasria perils comprised the following:
i. any act (whether on behalf of any organisation, body or person, or group of persons) calculated or directed to overthrow
or influence any State or Government, or any provincial, local or tribal authority with force, or by means of fear, terrorism
or violence;
ii. any act which is calculated or directed to bring about loss or damage in order to further any political aim, objective or cause, or
to bring about any social or economic change, or in protest against any State or Government, or any provincial, local or tribal
authority, or for the purpose of inspiring fear in the public, or any section thereof;
iii. any riot, strike or public disorder, or any act or activity which is calculated or directed to bring about a riot, strike or public
disorder (the term “Public Disorder” shall be deemed to include civil commotion, labour disturbances or lockouts);
iv. any attempt to perform any act referred to in clause (i), (ii) or (iii) above;
v. the act of any lawfully established authority in controlling, preventing, suppressing or in any other way dealing with any
occurrence referred to in clause (i), (ii), (iii) or (iv) above.
Given the monopoly, tax exempt status and low loss history over the years, Sasria accumulated substantial reserves. Accordingly,
in the mid 1980’s it was able to purchase reinsurance coverage in the international markets obviating the need for the insignificant
coverage provided by its members.
In 1998, the Government together with Sasria and its Members reached consensus that the assets of Sasria should be distributed
for the benefit of the people of South Africa. As a Section 21 Company, Sasria was unable to distribute any surpluses generated. To
remedy this situation, the Conversion of Sasria Act No. 134 of 1998 (the Act) was passed and it effectively:
• Converted Sasria to a Limited Company.
• Made the State the sole shareholder of Sasria Limited.
• Allowed an actuarial determination of assets surplus to the needs of Sasria.
• Allowed for the payment of the determined surplus as a special dividend payable to the Shareholder to be used to off-set
interest on State debt.
• Allowed for the privatisation of Sasria Limited.
The Act was effectively implemented and over a two-year period, Sasria was able to pay special dividends totalling approximately
R11 billion, to Government.
6 Part A | Strategic environment and responsesCurrently Sasria functions through a network of agents, the underlying insurance companies. The agents issue the Sasria Coupons
and Policies on behalf of Sasria, permit Sasria to attach to the terms and conditions of the underlying policy and are responsible for
the premium collection.
During 2012, the new Companies Act (No. 71 of 2008) came into effect. One of the requirements was the inclusion of “SOC” in the
company name for all state-owned Companies. Sasria Limited became known as Sasria SOC Limited.
2. PURPOSE OF SASRIA
As a state-owned entity, Sasria has a legislative mandate that governs day-to-day business operations and a broader strategic
mandate to make a positive contribution to transformation within the industry and South Africa.
The principal purpose of Sasria is to provide cover for damage caused by those risks listed in the Reinsurance of Material Damage and
Losses Act No. 56 of 1989, and any other risks which may be deemed necessary or viable by management and board of directors of
Sasria. In addition, it is the purpose of Sasria to research and investigate coverage for any special risk that can be of national interest.
In simplified terms, our purpose is to create financial peace of mind to all those who depend on us: our clients, customers, staff
and suppliers.
3. CORE VALUES
Our values underpin the delivery of Sasria’s vision and mission and are as follows:
• Fairness – we will treat all our stakeholders impartially and with respect, recognising our accountability to them;
• Ethics – we will conduct ourselves in a manner that is transparent and ethical: courageously doing what is right, honouring our
commitments and communicating honestly;
• Service Excellence – in the performance of our work, we will consistently apply our knowledge, experience and best efforts to
deliver relevant and professional service of an exceptional standard;
• Collaboration – we will engage with our stakeholders, assuming positive intent, respecting diversity and working together to
create uniformly positive outcomes.
• Innovation – we will apply thought and creativity to the application of new solutions to our, and our customers’ needs
and requirements.
4. MANDATES
Sasria is the only short-term insurer in South Africa that provides cover against special risks such as civil commotion, public disorder,
strikes, riots and terrorism.
Sasria is accountable to the Minister of Finance via National Treasury. Like all the other insurance companies in South Africa, Sasria
operates within a well-developed framework regulated by the Financial Sector Conduct Authority (FSCA), the non-banking financial
services industry regulator. Sasria is a member of various industry associations.
Sasria has a dual mandate:
• Our legislative mandate as a short-term insurance company is to provide cover for special risk events in terms of the Reinsurance
of Material Damages Act; and
• Our broader strategic mandate as a state-owned company is to make a positive contribution to transforming the financial
services industry in line with the National Development Plan (NDP), in order to create a better and sustainable economic
environment for all South Africans.
Sasria delivers on this mandate in several ways. These range from delivering continued solid financial results, which enables the
company to remain self-funded as a state-owned company, while growing and transforming the insurance market and financial
sector through several initiatives, to Sasria’s Corporate Social Investment (CSI) spend.
5. OPERATING PRINCIPLES
Sasria conducts business in a responsible, disciplined, professional and well-governed way. As a state-owned company, Sasria
plays a meaningful role in society by offering products that will assist in the protection of assets in South Africa against potentially
catastrophic special risk events. The company is proudly South African and passionately committed to accelerating its growth and
business transformation goals. Sasria’s operating principles are:
• To operate with a core staff complement.
• To operate via an outsourced distribution network (agents) comprising other short-term insurance companies.
• To have sufficient reinsurance treaties and covers in place.
• To strive to achieve optimal investment returns.
Part A | Strategic environment and responses 7Sasria also:
• Identifies the insurance needs of the public through research and development.
• Conducts itself in a manner that promotes co-operation, mutual understanding and fosters good relations with relevant third
parties, agent companies, intermediaries (brokers) and end-customers in the same manner.
• Develops and maintains a work environment that encourages employment equity and skills development.
• Establishes a co-operative relationship with employees in order to work towards common goals of profitability and
high performance.
6. BUSINESS MODEL
Sasria’s unique business model enables the company to minimise its operating expenses, offer a very affordable product to protect
the assets of the people of South Africa against special risks, and sustain its solid track record of financial performance.
Our business model may be explained as follows:
Business process Explanation Stakeholders
Provide special We do not sell our products directly to our end-customers. Instead, we enter into agreements • Customers
risk cover with other short-term insurance companies and intermediaries in South Africa who then, as
agents, represent and sell the special risks cover to our end-customers, be they individuals,
businesses, government or corporate entities. The agents and brokers (intermediaries) engage
with our end-customers on policy administration and collect premiums on our behalf.
Pay fees We pay the agents binder fees for performing administration on our behalf. We also pay • Agents and brokers
intermediaries commission for selling our products to current and new customers.
Pay claims The only contact that we have with end-customers is on the settlement of claims. Customers • Customers
submit claims to the intermediaries or insurance companies, who confirm their validity prior to
submission to Sasria. We receive and verify all claims before payment directly to the customer.
Reinsure risks We buy reinsurance cover to protect and strengthen our balance sheet and pay reinsurance • Reinsurers
premiums to reinsurers. We receive recoveries from reinsurers when the reinsurance treaties are
triggered.
Pay salaries and We incur costs in managing the business, including paying our directors, employees and • Employees
other expenses service providers, as well as suppliers, for goods and services, and benefactors of our corporate • Suppliers
social investment activities. • Community
Pay taxes and fees We pay all the relevant taxes and statutory fees to the authorities. • Authorities
• Regulatory bodies
• Associations
Invest Our premium, after payment of claims and expenses, is invested, whilst ensuring and • Investments
maintaining the adequate liquidity levels for claims payment. Our investments earn good
returns in the form of interest, dividends and capital growth.
Pay dividends We pay our shareholder a dividend from our distributable reserves. • Shareholder
7. DELEGATIONS OF AUTHORITY
The Board of Directors of Sasria derives its authority from the following:
• Companies Act No. 71 of 2008
• Conversion of Sasria Act No. 134 of 1998
• Reinsurance of Damage and Losses Act No. 56 of 1989
• Public Finance Management Act No. 1 of 1999
• Short-Term Insurance Act No. 53 of 1998
• King IV Report on Governance for South Africa 2016
• Licenses as per the Insurance Act No. 18 of 2017
• Prudential Authority and FSCA Regulations
• National Treasury’s Significance and Materiality Frameworks
• Financial Advisory and Intermediary Services Act No. 37 of 2002
8 Part A | Strategic environment and responses8. GOVERNANCE FRAMEWORK
Sasria will continue its practice of applying sound governance structures, procedures and processes during the next financial
year. We consider these fundamental to the effective delivery of our dual mandate, as well as ensuring our company’s
long-term sustainability.
8.1 The Board
The Board is committed to the principles of openness, transparency, integrity and accountability as advocated in the King IV
Report on Corporate Governance for South Africa 2016 (King IV). This commitment to good governance is formalised in the
company’s charters, policies and procedures.
The Board of Directors comprises twelve Non-Executive Directors and two Executive Directors (Managing Director and
Finance Director). The Board meets a minimum of four times a year to review the strategic direction of the company.
Board members have been assigned committee responsibilities in accordance with the Public Finance Management Act No. 1
of 1999, Companies Act No. 71 of 2008, and the King IV Report on Corporate Governance.There are currently no vacancies on
the Sasria Board.
Board members as at 24 June 2020:
Initials Title / Surname Full Name Sasria Designation
M.M. Mr Ngoasheng Moses Modidima • Chairperson of the Board
• Investment Committee Deputy Chairperson
P.O. Ms Mokonyane Priscilla Onkgodisitse • Deputy Chairperson of the Board
• Risk Committee Chairperson
M. Ms Ramoipone Moipone • Non-Executive Director
N.D. Mr Marumo Nakedi Desmond • Social & Ethics Committee Deputy Chairperson
J.M. Ms Maisela Japhtaline Mantuka • Remuneration & Nomination Committee Chairperson
C.J. Mr van Dyk Christiaan Johannes • Non-Executive Director
E.S. Mr Ngutshane Enos Senise • Remuneration & Nomination Committee Deputy
Chairperson
R.T. Mr Haman Reginald Thomas • Risk Committee Deputy Chairperson
S. Mr Gounden Sathiaseelan • Audit Committee Deputy Chairperson
M.M. Ms Phiri Margaret Mosibudi • Audit Committee Chairperson
R. Ms Moletsane Refilwe • Social & Ethics Committee Chairperson
N. Dr Mgoqi-Mbalo Nolwandle • Investment Committee Chairperson
C.M. Mr Masondo Cedric Mnwabisi • Managing Director
B. Ms Mthiyane Bajabulile • Finance Director
Part A | Strategic environment and responses 98.2 Board member Profiles
Names and Preferred Current and or past fulltime
Surname Maiden Name Race and Gender Age
Name Position
Ngoasheng N/A Moses Modidima Black – Male 63 CEO and Deputy Chairman of
Safika Holdings
Mokonyane N/A Priscilla Onkgodisitse Black – Female 33 Discovery Insure – Head of
Strategy
Van Dyk N/A Christiaan Johannes White – Male 54 Current: Group CEO Assupol
Past: MD: Natsure CEO:
Momentum Wealth
Marumo N/A Desmond Black – Male 61 Self - Employed
Ngutshane N/A Enos Black – Male 64 Executive Manager Prasa
(current)
Skolo Ramoipone Moipone Black – Female 38 Director PFMA Support
Maisela N/A Japhtaline Mantuka Black – Female 66 Khomolema Consulting
Petro SA
10 Part A | Strategic environment and responsesCurrent Board Membership Qualifications Areas of Expertise
See attached list-Annexure 5 Master of Philosophy Investments
Bachelor of Arts
Sasria Master of Commerce majoring in Governance, Investments, Risk, Actuarial, Recruitment and
Nelson Mandela Children’s Fund Actuarial Science Human Capital
Bachelor of Science with Honours
Sasria BSC Actuarial Science Life insurance Short-term insurance Asset management
Assupol Holdings Investment product & administration Reinsurance Actuarial
Assupol Life ORSA Risk Finances Audit Remuneration Strategy
Assupol Investment Holding
Capcubed Home Finance SA, Namibia, London, Jersey, Guernsey
Capcubed Bridging Finance
Capcubed Investments Previous Board Committee
Kevin Grant Wines SA Guarantee Specialist, C&G Guarantees C&G Engineering
Idille Country Estate Risk Underwriters, Renew Risk Africa)
ICE Riaan K2013155484
Memberships include:
Risk Committee Chair (SASRIA & Assupol) Remuneration
Committee Chair (Assupol) Remuneration Committee
(Subtropico) Audit Committee Actuarial Committee
Investment Committee Social & Ethics Committee
Nominations Committee Growth & Innovation Committee
Sasria Magister Legume with Mercantile Law
Law
Bachelor of Law
Advanced Diploma in Law
Sasria Degree of Master of Public Risk
IRFA Board Chairperson Administration Human Resource
Chairperson of the Commission for Conciliation, Diploma in Administrative Studies Safety
Mediation and Arbitration (CCMA) Investment
Sasria National Diploma Finance Finance and Accounting
Accounting
B- Tech Finance Accounting
Sasria Master of Management Human Capital
Motor Industry Retirement Funds. Which Investment.
comprises of: Social and Ethics
Auto Workers Provident Fund
Motor Industry Retirement Funds. Which
comprises of:
Auto Workers Provident Fund
Part A | Strategic environment and responses 11Names and Preferred Current and or past fulltime
Surname Maiden Name Race and Gender Age
Name Position
Mbalo Mgoqi Codelia Nolwandle Black – Female 49 CEO/
Executive Management at
Standard Bank
Phiri Seoka Margaret Mosibudi Black – Female 46 Director
Senior Manager at AGSA
Haman N/A Reginald Thomas Coloured – Male 46 Group Corporate Services
Officer at Aspen Pharma Group
Sathie N/A Gounden Indian – Male 62 Non-Executive Director of Sci-
Bono Discovery Centre MPC
Moletsane Sehoole Refilwe, Johanna Black – Female 50 Middle East and Africa Head of
Compliance AIG
Masondo N/A Cedrick Mnwabisi Black – Male 53 Sasria Managing Director
Mthiyane N/A Bajabulile Black – Female 47 Sasria Finance Director
12 Part A | Strategic environment and responsesCurrent Board Membership Qualifications Areas of Expertise
Sasria Dr of Philosophy Short Term, Life, Employee Benefits and Asset Management
SIL experience with strategy development, execution and
management
Sasria Chartered Accountant - External Audit
Council for Mineral Technology - Internal audit
- Financial accounting
- Risk Management
- Corporate governance investigations
- Board evaluations
Sasria Masters Business Administration, Services Officer
National Higher Diploma in Aspen Pharmacare Holdings - Chairperson: Audit & Risk
Environmental Health, Committee (Department of Public Enterprises) - Chairperson:
Diploma in Company Direction Department of Sports and Recreation
- Rural Housing Loan Fund SOC - Royal Bafokeng Resources
Properties - Waterkloof Utilities Company - RBR Env Rehab
Trust - Department of Transport (ARC) - Driving Licence
Trading Account - Department of Home Affairs (ARC)
- Risk Management - Business Strategy - Risk Financing /
insurance - Corporate Governance - Internal Audit - Forensic
Audit - Information Technology - HR – Remuneration
Sasria Bachelor of Accounting Science Audit
Sci – Bono Discovery Centre Diploma in Accounting Finance
The Playhouse Company Risk
SARS Governance
NHBRC Fraud and Prevention
Sasria BA Commerce with Honours Governance, Compliance,
SAIA (Alternate Board Member) Regulatory Affairs
The South African Insurance Association BCom (Economics), Short-term Insurance, Reinsurance, Compliance, Risk
FIISA, Management, Strategy
AMP (Oxford)
N/A BCom (Accounting), (Hons),. Finance and Operations
CA (SA),
AMP (Harvard)
Part A | Strategic environment and responses 138.3 Board Committees
The Board has five committees which assist it to drive Sasria’s strategic mandate. These include four statutory committees,
namely the Audit Committee, Risk Committee, Remuneration and Nomination Committee and the Social and Ethics
Committee, as well as the Investment Committee.
8.4 Committee Roles and Responsibilities
The Committees roles and responsibilities and composition are as follows –
8.4.1 Audit Committee
Responsibilities
• Evaluate adequacy and efficiency of the internal control systems, accounting practices, information systems,
auditing and actuarial valuation practices of the company.
• Facilitate interaction between board and senior management, internal auditors and external auditors, on matters
referred to in section 8.1 of Prudential Standard GOI 2.
• Recommend measures to enhance the credibility and objectivity of financial statements and reports on the
insurer’s business.
• Advise the board on any matter referred to the committee by the board.
• Assess the effectiveness of the internal audit function.
• Assess the adequacy if the resources of the internal audit function.
• Promote and maintain an effective relationship with the external auditor.
• Ensure that policies are in place to ensure the independence of the external auditor.
• Oversee development of, and approve the, internal and external audit plans to ensure all risks are considered
and statutory and financial reporting requirements are met.
• Monitor implementation of internal and external audit plans.
• Review all internal and external audit reports and ensure that issues identified therein are managed and rectified
in an appropriate and timely manner.
• Provide input on scope of audit work.
Composition
• The Committee consist of six Non-Executive Directors.
• The Committee has a Chairperson and a Deputy Chairperson.
• One of the members of the Committee is the representative from National Treasury.
8.4.2 Risk Committee
Responsibilities
• Risk strategy development.
• Evaluate effectiveness of risk management system.
• Identify build-up and concentration of risk.
• Identify and monitor all material risks to help board in ensuring its decision-making capability and accuracy of its
reporting is maintained.
• Ensure appropriate segregation of risk function from other operational business line functions.
• Measures to enhance adequacy and effectiveness of the risk management system.
Composition
• The Committee consist of four Non-Executive Directors and one Executive Director.
• The Committee has a Chairperson and a Deputy Chairperson.
8.4.3 Remuneration and Nomination Committee
Responsibilities
• Develop and review appropriate remuneration policy.
• Monitor implementation of the remuneration policy and compliance with the GOI 2 Prudential Standard.
• Make annual recommendations to the board on remuneration of:
- The Managing Director.
- Senior managers reporting directly to the Managing Director.
- Other persons whose activities may, in the committee’s opinion, affect the financial soundness of the insurer
and any other person specified by the Prudential Authority.
14 Part A | Strategic environment and responsesComposition
• The Committee consist of four Non-Executive Directors.
• The Committee has a Chairperson and a Deputy Chairperson.
8.4.4 Investment Committee
Responsibilities
• Ensure that investments are made in terms of the investment policy.
• Ensure that appointed asset managers perform adequately and continue to produce good returns on Sasria
investments under their control.
• Ensure responsible investment is practiced promoting good governance and creation of value by companies
that Sasria invests in.
• Review appropriateness of the investment policy in light of economic and business conditions affecting Sasria
and making recommendations to the Board as appropriate.
Composition
• The Committee consist of five Non-Executive Directors.
• The Committee has a Chairperson and a Deputy Chairperson.
8.4.5 Social and Ethics Committee
Responsibilities
• Social and economic development.
• Environment, health and public safety.
• Oversee labour and employment matters.
• Promote consumer relationships.
• Fair treatment of customers by Sasria and its distribution channel.
• Ensure that accounting authority leads ethically and effectively.
• Reporting to the board and shareholder, at the annual general meeting, on matters falling within its mandate.
• Ensure that the accounting authority ensures that the SOE is and is seen to be, a responsible corporate citizen.
• Ensure that the accounting authority governs the ethics of the SOE in a way that supports the establishment of
an ethical culture.
• Ensure that it compiles and submits is annual report in line with legal requirements.
• Invite members of the executive and senior managers by standing invitation or ad hoc basis to provide
pertinent information and insights in their areas of responsibility.
• Execute its statutory duties and any other duties assigned or delegated to it by the governing body.
Composition
• The Committee consist of four Non-Executive Directors and one Executive Director.
• The Committee has a Chairperson and a Deputy Chairperson.
Part A | Strategic environment and responses 15Current Board and Board Committees Membership
Audit Committee Investment Committee
Name Capacity Name Capacity
Ms Margaret Mosibudi Phiri Chairperson Dr Nolwandle Mgogi Mbalo Chairperson
Mr Sathie Gounden Deputy Chairperson Mr Moses Modidima Ngoasheng Deputy Chairperson
Mr Reginald Haman Member Mr Sathie Gounden Member
Ms Priscilla Onkgodisitse Mokonyane Member Mr Christiaan Johannes Van Dyk Member
Ms Moipoine Ramoipone Member Mr Desmond Marumo Member
Ms Japhtaline Mantuka Maisela Member
Risk Committee Social and Ethics Committee
Name Capacity Name Capacity
Ms Priscilla Onkgodisitse Mokonyane Chairperson Ms Refilwe Moletsane Chairperson
Mr Reginald Haman Deputy Chairperson Mr Desmond Marumo Deputy Chairperson
Ms Refilwe Moletsane Member Mr Enos Senise Ngutshane Member
Mr Christiaan Johannes Van Dyk Member Ms Moipone Ramoipone Member
Mr Cedrick Mnwabisi Masondo Member. Ms Bajabulile Mthiyane Member.
(Managing Director) (Finance Director)
Remuneration and Nomination Committee Board
Name Capacity Name Capacity
Ms Japhtaline Mantuka Maisela Chairperson Mr Moses Modidima Ngoasheng Chairperson
Mr Enos Senise Ngutshane Deputy Chairperson Ms Priscilla Onkgodisitse Mokonyane Deputy Chairperson
Dr Nolwandle Mgogi Mbalo Member Ms Japhtaline Mantuka Maisela Member
Mr Moses Modidima Ngoasheng Member Mr Reginald Haman Member
Ms Margaret Mosibudi Phiri Member Ms Moipoine Ramoipone Member
Ms Refilwe Moletsane Member
Dr Nolwandle Mgogi Mbalo Member
Mr Enos Senise Ngutshane Member
Mr Sathie Gounden Member
Ms Margaret Mosibudi Phiri Member
Mr Desmond Marumo Member
Mr Christiaan Johannes Van Dyk Member
Cedrick Mnwabisi Masondo Managing Director
Bajabulile Mthiyane Finance Director
16 Part A | Strategic environment and responses8.5 The Executive Committee Members
Sasria’s Executive Management comprises the following roles:
• Managing Director
• Finance Director
• Executive Manager: Control Functions
• Executive Manager: Governance
• Executive Manager: Insurance Operations
• Executive Manager: Business Change & Technology
• Executive Manager: People Management
• Executive Manager: Stakeholder Management (Vacant)
Executive Committee Members as at 1 April 2020
Initials Title / Surname Full Name Sasria Designation Qualifications Field of Expertise
CM Mr Masondo Cedric M Managing Director BCom (Economics), Short-term Insurance,
FIISA, Reinsurance, Compliance,
AMP (Oxford) Risk Management, Strategy
B Ms Mthiyane Bajabulile Finance Director BCom (Accounting), (Hons),. Finance and Operations
CA (SA),
AMP (Harvard)
M Mr Mavuso Mziwoxolo Executive Manager: BProc,. Legal, Compliance and
Governance LLB, Company Secretariat
GMP (Gibs)
GEDP(Gibs)
S Ms Harrop-Allin Suzanne Chief Risk Officer BCom (Accounting) (Hons),. Risk Management, Financial
CA (SA), Services, Auditing
S Mr Nkosi Sam Executive Manager: . MSc (Information Systems) Information Systems and
Business Change and Technology
Technology
F Ms Benjamin Fareedah Executive Manager: Short-term Insurance,
Insurance Operations Reinsurance
T Ms Chocho Tshepiso Executive Manager: . BA (Hons) (Industrial People Management
People Management Psychology),
Vacant Vacant Executive Manager:
Stakeholder Management
Part A | Strategic environment and responses 179. ORGANISATIONAL STRUCTURE
The company has an envisaged staff complement of 118 permanent positions in seven Divisions and 24 Department.
for 2020-2021. Interns and temporary positions are not reflected.
18
19Sasria’s business and functional structure for 2020-2021 is as follows:
The Underwriting, Claims, Customer Relationship Management and Actuarial Services Departments represent the core functions
of Sasria.
10. FINANCIAL RESOURCES INCOME
Sasria holds a legislative monopoly on the sale of its current product and its assured source of revenue is through insurance
premiums payable by policyholders. Sasria cover is not compulsory, however; the policyholder must elect to include our product.
Sasria’s other source of income is investments. Asset allocation and benchmarking according to the company’s risk profile is
determined by the company’s Investment Committee, Risk Committee and the Board, which as a targeted return requires
investment performance returns equal to Consumer Price Index, plus an allocated percentage of 2% over a three-year rolling period.
11. DIVIDEND POLICY
Sasria advocates the regular payment of dividends in order to return excess reserves to shareholders, while retaining earnings for
value creation without impairing the company’s financial viability, solvency and future strategy.
Sasria can consider an ordinary or special dividend payment. An ordinary and/or special dividend declaration should be cognisant
of internal and external factors that that should be considered, which may result in dividends not being declared. Sasria might
therefore decide to retain capital for specific strategic objectives due to an increase in appetite, which can include; new product
developments; new markets; business model changes; investments in new ventures or acquisitions and development of operational
efficiencies in the business. Other factors include: the increase in terrorism exposure, the reduction in reinsurance capacity and
significant increases in underwriting risk.
The ordinary dividend to be declared annually equals the product of the profit after tax of the previous financial year multiplied by a
pay-out ratio, which is based on the medium-term return and medium-term growth expectation.
A special dividend declaration could be considered whenever deemed necessary by the Board and when Sasria’s Solvency Capital
Requirement (SCR) coverage ratio exceeds the risk target +10%.
For any dividend declaration, Sasria sustainability should be assessed and Sasria should always maintain liquid and solvent after
any payment.
12. BORROWING PLAN
No Borrowing Plan is included in this document, as Sasria does not have any current or intended plans for foreign or domestic
borrowing. The company is self-funded and sufficiently capitalised.
20 Part A | Strategic environment and responses13. RISK MANAGEMENT
The Risk Appetite Policy and Risk Strategy was first developed and approved by the Board in 2012. The policy was reviewed in
March 2019 in accordance with the FSCA Solvency Assessment and Measurement (SAM) regime, and the nature of Sasria’s business.
The Risk Appetite Framework document provides details for development and application of the risk appetite as referred to in the
Enterprise Risk Management Policy.
Enterprise Risk Management (ERM) enables management to effectively deal with uncertainty and associated risk and opportunity,
enhancing the capacity to build value.
Effective risk management is crucial to the company’s continued growth and success and this can only be achieved if all three
elements of risks – namely threat, uncertainty and opportunity – are recognised and managed accordingly.
In executing its business strategy, Sasria is exposed to a range of risks which need to be managed within its risk appetite and
tolerances. This assists the Board and Management in achieving its business goals and objectives.
Sasria aims to align strategy, processes, people and technology for the purpose of evaluating and managing the uncertainties that
are faced by the company.
Value is maximized when management sets strategy and objectives to strike an optimal balance between growth and return goals,
and related risks, and efficiently and effectively deploys resources in pursuit of the entity’s objectives.
ERM policies and processes are updated on a yearly basis to include new legislation and regulatory requirements (especially
regarding SAM). The policies form part of Sasria’s governance framework.
A table of Sasria’s top 10 key risks is attached in Annexure 3. The Chief Risk Officer and Operational Risk Manager meet with the
risk champions from each business Division on a monthly basis. Quarterly meetings are held with the Executive Managers of
all Divisions.
Sasria also applies the Own Risk and Solvency Assessment (ORSA) as defined by the Prudential Authority (PA) as the entirety of
processes and procedures employed to identify, assess, monitor, manage, and report the short- and long-term risks an insurance
undertaking faces or may face. It also defines the process to determine the own funds necessary to ensure that insurers’ overall
solvency needs are always met and are sufficient to achieve business objectives.
The regulatory balance sheet is currently projected once a year as part of the ORSA stress testing and risk budgeting process.
Projected regulatory capital requirements are considered together with the risk appetite, to ensure that Sasria’s business is managed
within the risk appetite on an ongoing basis.
A key part of Sasria’s ORSA process is to evaluate the potential adverse impact to the current and future financial condition of the
company resulting from changes to key risk factors from unexpected events.
Sasria is in the process of finalising the ORSA report for 2020/2021, which will be submitted to the PA. Sasria is currently in the
process of further embedding the ORSA process into the business for the next business cycle, and preliminary ORSA results
which are based on the financial budget for the business planning period were submitted to the Executive Risk and Compliance
Committee during November 2020.
14. ENVIRONMENTAL ANALYSIS
Since its inception, Sasria has always been directly affected by environmental pressures, largely by definition. Historically, the
emphasis has been on pressures of a political, economic, policy and legislative nature. In the light of recent developments, however,
technology and the environment must now be added to this list of key drivers.
Owing to the growing diversity of strategic drivers, we have adopted an abbreviated high-level PESTLE format for our environmental
analysis. We have also, for the purposes of this document, necessarily summarised the main issues rather than deal with them in detail.
Insurance Industry Trends and Drivers1:
South Africa’s insurance industry faces an increasingly challenging short-term outlook. The country continues to contend with the
coronavirus pandemic and the associated disruption will push the economy into negative territory in 2020/21. South Africa was
already dealing with high unemployment rates and the public health restrictions imposed to contain the spread of the disease will
lead to further heavy job losses. As a result, we now expect premiums written in the non-life sector to contract in 2020.
1 Fitch Solutions South Africa Insurance Report Q4 2020 (August 2020)
Part A | Strategic environment and responses 21From a political perspective:
Abbreviated PESTLE political analysis:
• Political volatility and perceived lack of credible direction persists.
• Visible success in reduction of corruption, but largely systemic.
• Increasing polarisation of opinions – populism a growing issue.
• Issues around supporting consistently under-performing State-Owned Entities.
• Sovereign debt repayment concerns on the horizon.
From an economic perspective:
Abbreviated PESTLE economic analysis:
• Deep contraction in GDP – recessionary environment and significantly reduced demand. Largely pre-existing but amplified /
accelerated by the COVID-19 pandemic.
• Troubled economic sectors, including construction, manufacturing, mining and tourism.
• Multiple downgrades experienced and low business confidence.
• Growing revenue gap will necessitate Government cuts and new taxes.
• Employment landscape deteriorated significantly (business closures and job losses).
• Infrastructural issues, especially electricity and water security / supply. Rising energy costs.
• Decline in “ease of doing business” – Foreign Domestic Investment (FDI) unlikely to be forthcoming.
From a social perspective:
Abbreviated PESTLE social analysis:
• Severe knock-on effects of political and economic issues.
• Disruptive impact of COVID-19 pandemic on society at large. Potential for extension or further pandemics.
• Rising unemployment figures.
• Economic downturn will drive social unrest and protests.
• Significant impact on education.
• Downward pressure on prices and margins. Weaker employment = reduced demand.
From a technological perspective:
Abbreviated PESTLE technological analysis:
• South Africa most technologically advanced country on the continent.
• Despite being widespread in society, significant digital inequality exists. This impact negatively on education. Digitalisation
impacting industry operations and workforce.
• Data affordability an impediment to low-cost voice and text substitution.
• Need for greater technological inclusivity.
• Data breaches and cyber security are growing risks.
From a legal and regulatory perspective:
Abbreviated PESTLE legal and regulatory analysis:
• Land expropriation a “defining issue” but little short-term threat to property rights. The key risk is “land-grabbing”.
• Little incentive to invest, despite Special Economic Zone (SEZ) policy (incentives, location, productivity, infrastructure,
competitive advantage).
• High tax levels (personal and corporate), stringent exchange controls and prescriptive labour regulations an impediment.
• Arguably a highly over-regulated environment.
From an environmental perspective:
Abbreviated PESTLE environmental analysis:
• Several critical drivers including global warming / climate change.
• Expected increases in incidence of fires, droughts, windstorms and rain. Weather patterns are changing and becoming
more extreme.
• Pollution needs to be arrested (emissions, waste management and toxic chemicals).
• Over-utilisation of natural resources increasingly problematic.
• Environmental impacts on communities are expected to be progressively more severe.
• Potential for cooperation between local authorities and insurers to reduce systemic risk and limit losses.
22 Part A | Strategic environment and responses15. SWOT ANALYSIS
Sasria’s ability to deliver special risk insurance in terms of its mandate depends, in part, on understanding relevant market dynamics,
customer needs and the regulatory environment while balancing these drivers against its internal capacity and capability in the
context of acceptable levels of risk and shareholder value expectations.
To review its positioning against these requirements, Sasria routinely performs SWOT (Strengths, Weaknesses, Opportunities and
Threats) analyses at both a Departmental and consolidated level. The company’s SWOT status as at October 2020 following a Board
strategy session, is reflected in the following graphic.
It is important to note that i) many of the weaknesses and opportunities raised before have been addressed in the interim and ii)
that our external threats remain largely similar:
Part A | Strategic environment and responses 2316. FUTURE OUTLOOK
Considering the country’s economic and inflationary analysis, the non-life sector has also been impacted negatively by COVID-19.
Insurers are now confronting a new reality in which the COVID-19 pandemic is a long-term disruption to their customers,
employees, and suppliers.
The decline in economic growth will result in consumers cutting their budgets, thereby potentially cutting their insurance cover.
Small, Medium and Micro Enterprises (SMME) are vulnerable to poor economic growth, which will lead to businesses closing, thus
having a negative impact on industry’s premium.
Premium volumes are also falling in aviation, marine, construction, and some insurers have stopped writing new travel business.
This calls for insurers to come up with innovative initiatives to retain their clients, recover new business, and design
relevant products.
Our business model at Sasria also leave us susceptible in this pandemic period due to our premium performance being dependent
on the outlook of the economy, inflation and the non-life sector at large. As consumers and SMMEs will be cutting down their
insurance cover and closing their businesses, this could have a direct impact on Sasria’s premium growth. Some of the industry
sectors have also been forced to halt their operations, which will reduce our premium thereby impacting negatively on Sasria’s
premium growth. This forces Sasria to assess the way in which the company deals with unprecedented crisis and to come up with
agile approaches to serve our policy holders and stakeholders in time of strain.
The socio-economic impact of this crisis will result in worsening unemployment levels, higher levels of poverty, and inequalities. In
addition, collection of revenue by SARS is expected to be negatively affected, and this will result in Government unable to provide
services as expected to its citizens. The wage negotiations and discussion on retrenchments will be widespread. All the above will
drive our claims to levels higher than in previous years. We expect riots to be widespread. The damage to properties after lockdown
is expected to rise and we expect massive increase in claims numbers.
Already one of the most developed markets in the region, South Africa’s short-term insurance industry continues to offer growth
potential, but the challenges are significant. These industry challenges, among others, are:
• Low insurance penetration in the lower LSM and SME segments of the population;
• Market competition resulting in soft market prices;
• Low growth economy – due to the slow economic growth new markets are not opening;
• Lack of skills in the industry – the industry skills base is ageing, and not enough new entrants are entering the
insurance industry;
• Slow pace of transformation in the insurance industry; and
• Global warming, resulting in extreme weather.
Insurers have a limited influence on macro-environmental conditions and need to focus internally on what they can control. This is
generally a function of managing the cost of doing business to drive improved margins.
17. VISION 2024
In our 5-Year Strategic Plan, we have identified areas of focus. These areas of focus provide opportunities to various stakeholders and
specifically address the risks that the government, insurers and Sasria face. With all challenges facing our country, sector, and our
company, the most important considerations under Sasria’s control are likely to be:
Digitalisation:
The adoption and leverage of fit-for-purpose technologies to:
• Manage or reduce costs through the automation of repetitive processes;
• Create a sound basis for analytical and predictive capabilities;
• Explore new data monetisation opportunities;
• Create targeted distribution platforms;
• Mitigate risk.
Customer-centricity:
• The development of a segmented portfolio of relevant, affordable and accessible products, incorporating, as appropriate,
dynamic pricing models and bundled offerings, as well as relevant products for “new” economic sectors, such as agriculture;
• Ensuring that Sasria’s people are aligned with customer needs within an enabling organisation structure and culture.
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