Transcript Title of Presentation Here

Financing the Risks of
Natural Disasters
World Bank Conference
June 2003
WORLD BANK CONFERENCE
AGENDA
 The market – Why?
 The market – How?
 An emerging market – The informal sector
 Risks and Rewards
 Conclusion
THE MARKET – WHY?
 STRATEGY
 Anticipation of future trends and their applications on society as well as on the
company.
 Understanding of the company’s strategic capabilities that can be leveraged into
these trends.
 TRENDS
 Rapid urbanisation
 Breakdown of the extended family
THE MARKET – WHY?
 STRATEGIC CAPABILITIES
 Low cost admin
 Distribution management
 OPPORTUNITY
 Few players
 Significant growth potential
THE MARKET – WHY?
 About our markets
SA
Commenced Operations
GDP Growth %
Population (m)
Potentially actively employed
Actively employed-Formal
Insurance as % of GDP - Total
Industry Share %
Market Share
Botswana Namibia
1995
1998
3.1
6.5
5.5
43.1
1.6
1.8
15m
500,000
500,000
6.8m
280,000
165,000
18.20
2.90
2.20
3
74
22
16
42
5
Kenya
2000
1.2
30.3
9.2m
1.8m
3.49
18
2.6
Ghana
2000
4.4
19.2
4m
1m
<1.00
10
2.5
Zambia
2002
5.6
10.7
3.4m
476,000
<1.00
N/A
N/A
THE MARKET – HOW?
 Product design
 Product distribution
 Premium collection
 Benefit delivery
 Costs/costs/costs
THE MARKET – HOW?
Product design
 CUSTOMER
 Culturally relevant – wider family
 Affordable – low minimum premiums
 Understandable – pre-packaged
 Re-enforce promise – more claims
 COMPANY
 Easy to administer – underwriting, claims processing
 Manage the risk – wider family, waiting periods, steps sums assured
THE MARKET – HOW?
Product distribution
 Formula driven – doing the basics right
 Mainly into paypoints - work site marketing
 Group presentations - individual sales
 Productivity – great expectations
 Zoning
THE MARKET – HOW?
Premium collection
 Salary deduction – early is good
 Paypoint relationships
 Collection diversification
 Commercial
 Cash
 VDDO
 Technology – simpler, better, faster
THE MARKET – HOW?
Benefit Delivery
“Today's claims payment secures tomorrow’s new business”
 DELIVERY ALLIANCES
 Speed – immediate payment
 Convenience – near the customer
 Seamless service – one call “money or the box”
 SOME INTERESTING FACTS
 Average payout $650
 98% of claims paid by EFT
 95% of claims paid within 24 hours
AN EMERGING MARKET – THE
IMFORMAL SECTOR
 Booklet based scheme through affinity group (usually
Church)
 Weekly paid premium collected through Church
 Cover only continues if “book” stamped
 ALA provides “Insurance Licence”
THE RISKS
 Political
 Economic
 Social
 Aids
 Death Certificates
 Financial
 Currency Risk
 Exchange Control
THE REWARDS
 New Business
-
20% CAGR
 Recurring Premium Income -
35% CAGR
 Total Assets
-
44% CAGR
 Dividend
-
19% CAGR
 Share Price
-
21% CAGR
CONCLUSION
 The need exists
 The need can be met …. and profitably
THROUGH
 Focus
 Passion
 Understanding
Thank You