The Brief (TB) caught up with Old Mutual Namibia Group Chief Executive Officer, Tassius Chigariro (TC), to discuss the impact of COVID-19 on the business, developments in the insurance sector and opportunities going forward. Below are excerpts of the interview.
TB: It has been a year since you assumed the hot seat at Old Mutual Namibia, what’s your view of the business and its position in a highly competitive market?
TC: Old Mutual Namibia has for many years been one of our biggest businesses in the continent and indeed operating in a highly competitive market. I was very aware of the significance of the role of Old Mutual Namibia CEO, reality has proven that I underestimated the extent of the challenge particularly as a result of the pandemic impact. The COVID-19 pandemic caused massive disruption to our business and for most businesses in Namibia. Some of our colleagues succumbed to the pandemic, others lost very close family members, exacerbated by a large number of our dear customers who lost lives – therefore, my first year was very stressful.
The journey thus far has required myself and the Old Mutual business to learn, unlearn and relearn to improve ourselves collectively and continue being trusted by our customers, employees and regulators during a time of need. Despite all the challenges, there have also been positive outcomes through this crisis. There is now a strong drive to collaborate both internally, within our different businesses and externally with regulators and competitors in order to help our communities to fight the pandemic.
This year has reminded us to always put customers first in our decision-making and we have realised the importance of integrating technology and digital solutions into our operating model so that we become more agile as an organisation. The battle of COVID-19 is not yet over, but I remain optimistic that both Namibia and Old Mutual will come out stronger and wiser.
TB: Considering the deleterious effects of COVID-19 and a struggling economy, how are you positioning the business to ensure it retains its market share and continues to write new business?
TC: Our business is set up with long-term reserves to sustain the impact of pandemics, Old Mutual Namibia is therefore here to stay for a long run. A pandemic of the strength we have experienced will affect a company’s solvency and ability to continue doing business, I am proud to say Old Mutual remains well capitalised and defending its market share. Old Mutual launched a digital platform called Old Mutual Protect (OMP) to enable us to continue doing business digitally in a changing world.
Old Mutual aims to remain the household brand trusted by our customers as their lifetime partner and we are passionate about helping them achieve their financial goals. Through our personalised product offering, Old Mutual gives our customers the flexibility to build funeral or illness insurance that suits their unique needs. Earlier this year, we launched the Core Growth Portfolio (CGP) proposition, a new competitive retirement savings product. Combined with responsible investment in our investment group business, responsible lending in our lending business and ensuring peace of mind of our customer through our short-term insurance business, I am optimistic that we can continue to deliver our promise while exploiting new growth opportunities.
TB: How much in terms of COVID-19 claims were paid out by Old Mutual Namibia, in terms of life cover, funeral cover and business cover for loss of business due to the pandemic and what measures have been put in place to cushion the business going forward?
TC: As a business, Old Mutual offers a variety of insurance products including life insurance and short-term insurance. The number of death claims significantly increased since the outbreak of COVID-19 compared to pre-COVID-19 levels. At the peak of the third wave, our business was paying ten-fold the death claims it normally receives. Old Mutual Namibia is honouring, through the assistance of our Reinsurers, all valid business interruption claims by our customers.
Old Mutual has gone through good and rough seasons over the last 101 years we operated in Namibia and we have remained anchored as a financially strong, well-capitalised and well-governed business with capabilities that position us well to meet the changing needs of our customers.
TB: What’s your view about consolidation that is taking place in the local insurance market, where we have seen mergers and acquisitions taking place, and the likely impact it has on Old Mutual?
TC: The impact of COVID-19 on the insurance industry has been severe, and it exposes companies not well capitalised to acquisitions, it is the nature of economic dynamics. Consolidation in a formalised market like Namibia is not a negative outcome and we will possibly see more of such mergers and acquisitions going forward. At this stage, Old Mutual Namibia is focused on ensuring operational efficiency in order to meet our customer needs and carry our service to top quality, to widen our distribution channels while contributing to financial inclusion and market development.
TB: Earlier in the year, we saw the Old Mutual Investment Group acquiring a controlling stake in a solar plant. What was the value of the transaction and does Old Mutual plan to remain invested in the business?
TC: Old Mutual Investment Group (OMIG), a subsidiary of Old Mutual Namibia, is an institutional asset manager with a range of investment mandates from Namibian institutional investors including pension funds. OMIG acquired a controlling interest in a 5MW solar PV plant for a purchase consideration which cannot be disclosed for reasons of confidentiality through the Expanded Infrastructure Fund (EIF) trust, a fund it manages.
Old Mutual Investment Group manages investment portfolios for pension funds who are long-term investors, at this stage our view is that this solar plant is a long-term investment to meet the needs of our investing customers. The investment will be managed by OMIG (Namibia) in accordance with the fund’s investment mandate. The asset management process is aimed at optimising returns for the fund’s investors – a broad base of Namibian pensioners.
TB: Can we expect more acquisitions from the investment business going forward and how much has been set aside for attractive investments that fit into the group’s investment strategy?
TC: As mentioned above, Old Mutual Investment Group (Namibia) manages a range of investment mandates covering a broad spectrum of asset classes including unlisted property, infrastructure, and private equity. We have developed an exciting pipeline of investment opportunities in sectors including energy generation, education, healthcare and land servicing and affordable housing that we expect to close in the short- to medium-term. Of course, all Investments are done on a case by case basis and evaluated on its own merits, when acquired or sold which support the mandate and overall objectives of the said Funds that we are managing on behalf of our investors.
TB: Finally, how key is innovation when it comes to the group and its product offering, including the use of new technology?
TC: A key lesson COVID-19 has taught us is that convenience is no longer an option but obligatory. We have therefore embarked on numerous initiatives across our business to automate our processes with a view to improve efficiencies. Additionally, there are some exciting new developments in the pipeline that will enhance our service offering and widen our distribution channels, so I encourage you to keep following Old Mutual developments.
