The Old Mutual CFO says that leaders have had to be more deliberate when checking in with people.
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Casper Troskie, the CFO at Old Mutual, believes business can not be entirely separated from personal – particularly after seeing the internal and external impacts of Covid-19.
“In my role you can’t divorce how you’re feeling from what’s happening around you. I’ve seen the impact on my team, we had quite a few people who contracted Covid-19. I am fortunate that none of my immediate family members have been impacted, however team members have experienced loss. It has been a very difficult time for all of us. People are struggling to cope, resulting in sometimes very emotional meetings,” he said.
The big learning from this for Casper has been to cultivate more focused time for connecting with people.
“The people aspect has been massive, and we had to step up as leaders to do more work in deliberately checking in with people. This has had a positive impact and we have seen an improvement in engagement scores with staff,” he noted.
From a business perspective, the negative GDP growth resulted in financial pressure on consumers with Old Mutual recording higher policy lapses on both investment and risk policies. In addition, there was a very large increase in claims volumes on the risk side, which includes funeral cover.
“In the first wave commencing in June 2020 we paid out R1.3 billion in claims due to excess deaths resulting from Covid-19. By year end, we had provided for R5.5 billion in excess deaths, of which we had paid out R3.5 billion at the end of February 2021. We pay out over 90 percent of funeral policies within four hours and can see quite quickly when there’s a spike,” he explained.
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The biggest spike, according to Casper, happened in January and February this year, with the second coronavirus wave having almost double the impact than the first wave across all the company’s businesses which straddles low-, middle- and higher-income population groupings.
Based on this, R2 billion has been set aside for a potential third wave as shown in Old Mutual’s recent results presentation.
“We’ve based it on excess deaths, not Covid-19 deaths. It is not a normal predictive modelling approach. It is a short-term model based on expectations that would arise in a third wave. We have seen elevated death rates between the waves,” he noted.
In line with this data-driven approach, Old Mutual estimates that as much as between 40 and 55 percent of the population have contracted the virus.
This is why the speed of vaccination is of particular interest, with the organisation looking at ways to support the process from a funding and distribution perspective.
“In SA we aren’t able to procure vaccines directly as international companies are only selling to the government. We are, however, trying to play a role through Business Leadership SA as to how we can use our infrastructure. We have a big branch infrastructure that stretches into rural areas, which can help to deliver vaccines if feasible,” he explained.
“If permitted, we would certainly want to try and help pay for vaccines, especially for people older than 60 with the biggest risk of being infected,” he added.
In terms of the future, Casper has also not separated business and personal.
“I joined in 2018 to support the listing on the JSE in that year and the last part of the managed separation and unbundling of the majority shareholding in Nedbank. It also included getting a finance function in place that is sustainable,” he recalled.
Last year, Old Mutual also had to deal with another crisis over and above the Covid-19 pandemic. The company’s stocks were suspended from trading on the Zimbabwe Stock Exchange, which impacted our shareholders invested on that stock exchange.
“There is still work to do on building the finance team and to modernise the finance infrastructure. It was a difficult year-end process as we had to work more sequentially during the lockdown as we were working from home. This impacts substantially on timelines and puts pressure on the teams,” he said.
In addition to a more modern finance infrastructure internally, Casper also sees an increase in digital channels for the business.
“In the insurance business globally where we look at complex sales or products, we still think that most sales will be done through an intermediary. People do a lot of research online and then switch to an advisor before making a final decision. It is important to equip advisors with digital tools to serve and process transactions for clients , both in the mass and middle markets,” he explained.
The resultant effect may result in a change in the model for the company’s physical branches.
“We do still have our branches and are seeing ongoing use of those to sell life and other products. We are seeing less of a need for branch infrastructure in our traditional insurance business. We are also noticing a transition with an increase in non-advised sales, with less complex products being sold by bank agents as opposed to financial advisors,” he added.