social sustainability - santam · underwriters and assessors is being addressed within the broader...

22 SANTAM SUSTAINABILITY REPORT 2012

S o c i a l s u s t a i n a b i l i t y

social sustainability

EMPloyEEs

santaM affEcts a broad rangE of individuals and grouPs and, in turn, is affEctEd by thE concErns and actions of thEsE stakEholdErs.

we are committed to engaging with all of

these stakeholders with respect for their

interests.

These stakeholders are:

− Employees

− Intermediaries and Underwriting Management

Agencies (UMAs)

− Clients

− Communities

− Government (FSB, INSETA)

− SAIA

− Sasbo

− Regulators such as the FSB, FAIS Ombud

− Insurance industry

MatErial issuE: Availability of skills

stratEgy Pillar: Drive efficiency

santaM sustainability fraMEWork itEM:

Human capital o

sustainability kEy drivErs:

Attraction, retention and development of employees with emphasis on equity; Impact of HIV/Aids on our workforce; Employee wellness; Occupational health and safety

Delivering on Santam’s strategy requires a calibre of

employee who is able and willing to implement our strategic

vision. We focus on finding the best people, do our best to

keep them safe, healthy, engaged, and we help them grow to

their full potential.

The short-term insurance industry requires specific

technical skills, industry knowledge and relationships.

Retaining these skills is a challenge in this competitive

industry. The need to attract and retain scarce skills such as

underwriters and assessors is being addressed within the

broader context of Santam’s commitment to transformation.

Santam’s human resources policy aims to achieve the

company’s human capital goals and ensure compliance with

the Employment Equity Act, Labour Relations Act, Skills

Development Act, the Department of Labour guidelines, the

Department of Trade and Industry’s Code of Good Practice

and the Financial Sector Code.

How we manage Human capital

Our strategy is to identify top internal and external talent

and ensure that we offer an employee value proposition that

will attract quality external candidates and retain existing

and new talent in the company. We do this by offering a

combination of competitive benefits, development and

career opportunities and a culture of high-engagement,

diversity, innovation and care. We are focused on increasing

black representation at all levels of the business.

We have two formal national structures that govern

employment equity and transformation issues in the group

(as illustrated in the diagram on page 23):

− The National Employment Equity Forum (NEEF) –

addresses compliance with employment equity and

diversity and is responsible for driving and monitoring

employment equity in the group.

− The Transformation Advisory Group (TAG) – comprises

senior change agents who bring diverse skills and views

to a robust debate on broader company transformation

issues with the Chief Executive Officer.

23SANTAM SUSTAINABILITY REPORT 2012


Consultative employment equity forums comprising

employment equity (EE) champions at business unit level

deal with practical implementation issues and help to drive

a bottom-up approach. We provide guidance and advice to

our subsidiary companies to assist them in implementing

their EE and transformation strategies in a manner which

we are comfortable with.

Overall black representation within the group continues to

rise, reaching 59.8% in 2012 (2011: 56.8%) and achieving

our goal of 59% stated in last year’s report. However,

achieving representation at senior management and

executive committee levels remains challenging. We aim

to address this through:

− A targeted approach to succession planning, career

path planning and mentoring for black employees with

leadership potential;

− Where vacancies arise, preferentially filling these with

black candidates where possible.

We maintained a good black appointment ratio in 2012

although we did not achieve our target of 80%. 46.0%

48.0%

50.0%

52.0%

54.0%

56.0%

58.0%

60.0%

62.0%

BLACK REPRESENTATION

2009 2010 2011 2012*

* Unverified

59.8%

56.8%

54.4%

50.8%

chief executive officer and exco

report

Champions(from each

business unit)

support

support

Divisional forums

Employees

Human resources committee

TAG (chaired by the

CEO)

NEEF (chaired by executive head: people and brand)

TAG (chaired by the CEO)

report

“WE ProvidE guidancE and advicE to our

subsidiary coMPaniEs.”



34%

11%

32%

23%

40%

36%

14%

11%

33%

24%

32%

11%

16%

30%

12%

43%

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

A P P O I N T M E N T S

AFRICAN

COLOURED

INDIAN

WHITE

20102009 2011 2012

35%33%

20%

12%

25%

34%

31%

11%

16%

30%

12%

43%

19%

9%

39%

33%

P R O M O T I O N S

AFRICAN

COLOURED

INDIAN

WHITE

20102009 2011 20120%

5%

10%

15%

20%

25%

30%

35%

40%

45%

24%26%

41%

9%

23%

29%

8%

40%

16%

8%

29%

37%

27%

42%

22%

8%

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

E X I T S

AFRICAN

COLOURED

INDIAN

WHITE

20102009 2011 2012

“WE havE a coMPElling

EMPloyEE valuE ProPosition

that WE coMMunicatE.”

a P P o i n t M E n t s

P r o M ot i o n s

t E r M i n at i o n s *

* Includes exits initiated by the employee (voluntary) such as resignations or early retirements, as well as involuntary exits such as normal retirements, transfers to subsidiaries or death.



Diversity

We continue to roll out diversity awareness and training in

the form of workshops and training modules on effective

management in a diverse workplace. This includes engaging

all employees on the strategic importance of increasing

black representation in the workforce and building an

understanding of what diversity is and why it provides a

competitive edge.

Santam spent 2.66% of the leviable amount on training

and development of black employees in 2012 (2011: 3.7%)

against a target of 3%.

attraction anD retention of employees

We attract and retain employees by ensuring that we

have a compelling employee value proposition that we

communicate to employees. Employees are made aware of

the full range of benefits they enjoy beyond direct salary and

benefits, including:

− Competitive remuneration and financial incentives.

− Career opportunities for employees demonstrating

expertise, drive and commitment.

− Fast-track opportunities for those demonstrating

leadership potential supported by individual coaching,

academic programmes and other targeted development

opportunities.

− Peer recognition programmes to reinforce best practice.

− Study aid and study leave programmes – Santam

invested R2 million in study aid in 2012 (R1.4 million

in 2011).

− Value-added benefits such as access to a concierge

service, employee counselling and wellness

programmes.

skills Development

Managers in our operations identify areas that require

training. This is combined with information about industry

skills shortages from INSETA. We run a range of training

programmes each year facilitated by external trainers.

These programmes include leadership development,

behavioural skills and legislative training (e.g. FAIS).

The group Learning Forum brings together human

resources and skills development teams from across

the Sanlam group. The forum meets monthly to identify

synergies, potential cost savings, best practices, alignment

of strategies and transformation learnings.

The table below shows our progress against our 2012 skills

development targets:

Area 2012 target 2011 target

lEarnErshiP30 black, including

5 people with disabilities

23 black, including

1 person with disabilities

graduatE PrograMME 100%

study aid 65% 74%

sEnior ManagEMEnt dEvEloPMEnt PrograMME 65% 53%

Junior lEadErshiP dEvEloPMEnt PrograMME 65% 64%

learnersHips

Learnerships are an important aspect of our strategy to

bring people into our business at entry level. By making

learnerships available to black individuals, we create a

pipeline of skills that will help us achieve our transformation

objectives.

We combined our learnership programme with the Santam

Black Intermediary Development Initiative (SBIDI) to

increase training efficiencies, improve retention and take

advantage of economies of scale. The combined programme

is now known as the Santam Black Broker Development

Programme (SBBDP) and is discussed in more detail in the

intermediaries and UMAs section of this report (see page 28).

Santam signed a pledge with INSETA in 2012 to stimulate

job creation. This pledge reiterates our commitment to

developing and transforming the short-term insurance

industry.

people witH Disabilities

Santam has a strategy to employ people with disabilities

and disability awareness workshops have been run across

the group during 2012. We continued with our drive to

establish disability representation throughout the business

through use of a declaration methodology, preceded by

extensive communication.

At the end of the year, Santam employed 21 employees with

disabilities, 11 of whom are black (2011: 19 employees, of

whom 10 are black).


employment equity

We revised Santam’s employment equity plan (which

includes bottom-up targets). This is ready for alignment with

Sanlam’s three-year plan which commenced January 2013.

This alignment is required to assist with group reporting

and compliance. We also rolled out a target-setting and

placement tool which assists forecasting by directly

converting placement decisions into a BBBEE score.

Defining anD Driving a performance culture

The InsideOut programme is about looking inwards,

uncovering excellence and then acting outwards. It aims to

drive excellence internally through focusing on:

– the type of culture and leadership practices we wish to

embed; and

– providing all our employees with the environment and

opportunities which will enable them to thrive.

A range of interventions and source and reference material

centred on engagement were made available to the

business. Engagement tracking and management are now

firmly embedded in the performance management process

and Exco scorecards.

The culture and engagement survey was repeated in

November 2012 and overall participation in Santam reached

77%. The results of the survey held relatively steady over

last year, with nearly two-thirds of the workforce showing

that they are fully engaged.

santam’s labour climate

Santam respects the rights of its employees to participate

in collective bargaining organisations and has a mutually

respectful relationship with the financial sector union,

Sasbo. Santam has good relationships with its employees

and this results in few labour-related disputes.

At the end of 2012, 800 employees (28.9% of employees)

were members of Sasbo.


16

8

DISMISSALS

1414

1211

7 7

2009 2010 2011 2012

DISCIPLINARY DISMISSALS

CCMA CASES

0

2

4

6

8

10

12

14

16

18

There were 14 disciplinary dismissals during the year (2011:

14). The number of CCMA cases decreased from 12 to 7.

succession planning anD rewarDs

Our succession planning model focuses on the top three

employment levels and ensures that appropriate skills are

in place to ensure a pipeline of leaders. This approach was

extended in 2012 to junior management in the operations

and sales environments.

Our new rewards strategy identifies mission-critical

characteristics such as technical skills, leadership,

employment equity status, ease of replacement and key

relationships with stakeholders. The identification of key

employees, combined with an understanding of their reward

needs, enables Santam to offer customised reward offerings

which will be geared to enhance motivation and retention.

Part of this rewards strategy is to introduce “job families”

rather than job grades. This gives employees a clearer view

of possible career progress, helps succession planning,

career planning and performance management.



employee wellness

Employee wellness is managed under a joint Sanlam and

Santam strategy aimed at standardising a core offering to

employees. This includes an employee wellness scheme,

preventative health screening and HIV/Aids management.

Our programme, called Careways, continues to be offered to

employees and their families at no cost.

Wellness days are held by our medical aid partners where

screening for lifestyle-related diseases, such as diabetes,

hypertension, obesity and cholesterol were offered. HIV/

Aids testing, lifestyle assessments covering nutritional

habits, stress evaluation and exercise levels, were also

offered. These sessions address the various challenges

our employees have indicated they need help with, such as

building sustainable couple relationships and mental health.

Hiv/aiDs

Research conducted by SAIA determined that HIV/Aids does

not pose a significant risk to the insurance sector. This is

borne out by our experience with our employees. However,

voluntary counselling and testing is offered at our wellness

and health days. We communicate regularly with employees

and conduct various awareness-raising programmes

leading up to World Aids Day. HIV/Aids assistance is

integrated into our employee wellness programme and our

medical aid funds, membership of which is compulsory for

all employees.

occupational HealtH anD safety

We do not believe that the office environment presents

significant health and safety risks. However, we are aware

of our obligations under the Occupational Health and

Safety Act (OHSA) and have initiatives in place to ensure we

comply. At induction, employees are informed of their rights

and responsibilities under the OHSA and sign an electronic

declaration as confirmation.

key HigHligHts for 2012

− We increased our black representation.

− Our study aid contributions increased year-on-year.

− We increased the number of employees with disabilities.

intErMEdiariEs and uMas

Santam is an intermediated business with a network of

over 4 000 intermediaries who add value to policyholders

by offering advice, and by the strong relationships they build

through the insurance lifecycle.

We need to ensure that we treat our intermediaries fairly,

invest in the future of the industry, understand potential

impact on these key business partners and ensure that they

comply with industry standards to keep growing profitably.

Our relationship is built on good corporate governance and

ethical business practices.

MatErial issuE: Ability to enter new markets

stratEgy Pillar: Growth through diversification


A sustained intermediary base k


Maintaining equitable relationships with intermediaries; Grow our black intermediary base; Impact of HIV/Aids on our intermediary base; Intermediary compliance with industry standards and government regulations

aspirations for 2013

− Achieve EE targets as defined in the EE Plan.

– Transition our performance management

process successfully to our shared human

resources platform.

– Complete the job families project.

– Achieve our skills development targets

for initiatives such as the team leader and

graduate programmes.



We compete with other short-term insurers for our

intermediaries’ business. We aim to entrench ourselves as

the insurance provider of choice through:

− Providing products that best suit clients’ needs at

competitive prices.

− Providing superior service, effective risk management

and maintaining excellent relationships with our

intermediaries.

− Delivering excellence in technical underwriting ability,

business acquisition, policy administration, claims

handling and client service.

How we manage relationsHips witH intermeDiaries

Intermediary relationships are managed by the broker

services business unit. The portfolio management and

agriculture business units own their own intermediary

relationship given the specialised nature of their business.

Broker services are split into 14 regions with two heads

managing the north and south respectively. Dedicated

relationship managers interact directly with intermediaries

on a regular basis to update them on product and service

developments and to obtain feedback on their service

experience and market developments. We initiated a project

in 2011 to formalise and improve the management of

relationships with intermediaries. The project has delivered

good results. This includes the improved number and quality

of visits to intermediaries which has contributed to growth

in market share.

Support services are provided through a number of

channels including centralised contact centres. These

services include the provision of quotes to intermediaries,

policy administration, renewals and claims processing for

the personal and commercial business units.

growing a DiversifieD intermeDiary base

We are committed to grow the number of black

intermediaries in our intermediary base to meet the

transformation objectives of the country and to align with the

emerging market for future growth. This is one of Santam’s

material issues in ensuring that it further develops its ability

to enter new markets (including the uninsured).

Our approach focuses on two key areas:

1. Increasing capacity by developing new black talent to

enter the industry through the SBBDP.

2. Increasing the amount of business we do through

existing and new black intermediaries.

Regional managers are set targets to identify candidates

for the SBBDP and black intermediaries who match our

requirements.

santam black broker Development programme

The initiative trains promising black graduates (109 to date)

to become successful short-term insurance professionals

with the long-term view of setting up their own intermediary

businesses.

The core of the initiative is a 12-month training programme

endorsed by the Insurance Sector Education and Training

Authority that covers:

− the short-term insurance industry;

− Santam personal and commercial product lines;

− business skills;

− career planning; and

− workplace experience with current intermediaries that

have been identified by relationship managers.

“intErMEdiariEs arE rEquirEd to

WritE rEgulatory ExaMinations

to EnsurE standards arE

uPhEld.”



Areas2012

(Learners)2011

(Graduates)2010

(Graduates)2008/2009

(Interns)

nuMbEr of intErns/graduatEs startEd 17 31 40 40

nuMbEr of intErns/graduatEs coMPlEtEd 15 31 31 32

hoW Many intErns/graduatEs PlacEd aftEr thE PrograMME at santaM or othEr brokEragEs 11 8 10 12

YeAr-on-YeAr compArIson (2009 – 2012)

intermeDiary compliance witH inDustry stanDarDs anD government regulations

The FAIS Act requires financial service providers to

meet the Fit and Proper Requirements under the act. All

intermediaries and certain client-servicing employees

are required to write regulatory examinations to ensure

standards are upheld in the insurance industry and

consumers are offered professional advice and service.

Santam provides workshops and study materials to its

intermediaries including training, CDs, study materials and

workshops.

All primary employees that deal with clients must write and

pass the mandatory regulatory exam. Our product training

business unit provides external business partners and

intermediaries with training to assist them to become FAIS

accredited.

The deadline for writing the Regulatory Exam 1 (RE1) was

moved from December 2012 to 31 March 2013. At year-end,

65% of client-servicing employees had passed the RE1.


− Segmenting our intermediary base to focus on

differential approaches and sales strategies that match

intermediaries’ needs more closely.

− Refining our multichannel approach to match the needs

of specific intermediaries to specific channels.

− The consolidation of our contact centres.


− Roll out training and development plans for

relationship managers.

− Continue growing our black intermediary base

through our SBBD programme.

− Obtain a 100% placement rate for graduates.



Santam needs to offer products that are relevant to current

and prospective clients’ needs to compete and continue

growing profitably. Retaining our clients requires us to

ensure that we keep them satisfied with our products and

service levels. We also need to ensure that we safeguard

the privacy of client information when it comes into our

possession.

alignment of proDucts, processes anD initiatives witH clients’ neeDs anD expectations

Each client has specific asset protection needs. We believe

there is no one-size-fits-all insurance solution that will meet

these needs. As such, we attempt to align relevant products

with client expectations:

– Client segmentation: By segmenting and researching

client needs and market trends, we gain a clear

understanding of what our clients need and want. We

can then offer the right products at the right price and

meet client service expectations while achieving our

internal value generation targets.

– Product design: Insurance products tend to become

commoditised. Santam has a product design process

that ensures we offer relevant products to our clients.

– Technology: Latest technology systems ensure that we

source, manage our client relationships and process

claims as quickly, efficiently and cost-effectively as

possible. For example, our analytical and segmentation

tools assist us in prioritising claims.

MatErial issuE: Balancing profit and growth in soft market conditions

stratEgy Pillar: Growth through diversification


Sustaining our client base j


Alignment of products, processes and initiatives to client needs and expectations; Client satisfaction, retention and growth; Client privacy and confidentiality

cliEnts



− Access: We have a range of distribution channels that are

designed to give our clients the choice of how to interact

with us.

− Education: We are involved with several client education

initiatives.

− Brand: Our brand positioning helps to differentiate our

offering in the market and communicates the group’s

promise to clients.

Our interactions with our clients are regulated by the

provisions of the Short-term Insurance Act, the Consumer

Protection Act (CPA), the FAIS Act and the FSB’s Treating

Customers Fairly Principles (TCF).

Santam was part of the TCF pilot and identified

requirements so that our policies and procedures align

with the final guidelines. Please refer to our website

www.santam.co.za for more information on the TCF

discussion paper.

How we manage alignment witH client neeDs anD expectations

We align our products with our client needs. Examples of

this include:

– an insurance solution for micro-businesses marketed in

cooperation with partners;

– a product for the student market; and

– our MultiBonus product which offers value for money

and a financial incentive for not claiming.

Santam’s pricing approach is also a significant competitive

advantage. It combines a variety of rating factors to

determine the price at which we are willing to underwrite

a particular risk. This approach takes into account our own

cost structure and the price a willing buyer is prepared

to pay for a product. We arrive at a fair price for each

risk by balancing stakeholder expectations regarding

competitiveness, accuracy, consistency, willingness to pay

and adequacy of cover. Over the past three years Santam

has adopted a more segmented risk profiling methodology

which ensures that premiums are aligned with individual

risk profiles.

We also look for other ways to increase value to clients

without discounting price. For example, Santam expanded

its range of free benefits to personal lines policyholders.

In all, clients can access six benefits through a 24-hour

helpline:

− Route assistance

− Legal advice

− Home-drive assistance

− Medical assistance

− Emergency home maintenance

− Roadside assistance

Innovations such as our award-winning claims card also

add value to our clients through convenience and the chance

to earn cash back should they use the card at a Santam

preferred supplier.

Constantly improving cost-efficiency through refining

processes and supplier management is one of the three

pillars of Santam’s revised strategy. This focus on cost

reduction is one of the ways we ensure our competitive

advantage among our peers in the industry.

Diversifying our distribution channels enables effective

distribution through the most suitable channels to each

target segment. Our clients can access Santam products

in the way that suits them best – through intermediaries,

affinity partners or our direct channels (MiWay).

consumer eDucation

Santam sits on the consumer education committee of SAIA

which runs various education initiatives to communicate

the value of short-term insurance. Our entry-level market

team is active in these committee meetings to ensure that

education takes place in the areas where it is needed to

develop new markets.

Santam also offers information about the industry and its

products through media releases and on its website. Content

videos on our micro-site (www.insurancegoodandproper.

co.za) inform consumers of our claims process, what

to do when they have a claim, the benefits of having an

intermediary and our value added service offerings.



client satisfaction, retention anD growtH

Keeping clients satisfied is key in retaining existing clients.

Satisfied clients help us grow our business through

referrals. Our intermediaries emphasise the benefit of

keeping our mutual clients happy and communicate

intermediary feedback to business units.

One of the ways in which we keep clients happy is by

providing excellent service. Administration inefficiency in

claims handling and fraud are two of the main sources of

escalating costs for insurers.

We add value to our clients’ claims settlement experience in

a number of ways. For example:

− through personal claims handlers; and

− faster claims settlement on certain lifestyle items.

client complaints

Complaints are handled by the client care business unit.

Our goal is to resolve complaints speedily. Client complaints

are also a valuable source of client feedback. We use this

information to improve service, future product strategy and

claims processes.

Contact details for the client care business unit are printed

on each policy, on claims rejection letters, on company

brochures and are available on the Santam website.

Complaints channels include:

− client care contact centres;

− internal arbitrator;

− the Ombud for Short-term Insurance (OSTI) and FAIS

Ombuds;

− the Santam website;

− consumer websites; and

− increasingly through social media.

Performance at our Santam-SOS 24/7 emergency and

claims helpline and Immediate Resolution contact centres

is rated by intermediaries and clients on a scale of 1 to 10.

Agent ratings of six or lower are automatically escalated

and the client is contacted to resolve their concerns.

We measure the performance of our contact centres by

monitoring the percentage of calls answered within 20

seconds. We consolidated our contact centres during the

year, and performance decreased slightly in the commercial

and claims contact centres while the personal lines contact

centre showed an improvement.

A TCF framework is being drawn up and the wording

of letters, schedules and other affected documents is

being revised to ensure that it is easily understandable.

Employees are being trained on TCF requirements.

An internal arbitrator is available to clients who feel that

a complaint was not resolved satisfactorily. Where the

matter is a complex one, clients may choose to escalate

their complaint directly to the internal arbitrator who offers

an experienced opinion on claims disputes. In 2012, 203

complaints (2011: 247) were referred to the arbitrator.

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

75%79% 79% 77% 78%

81%

C A L L S A N S W E R E D I N 2 0 S E C O N D S

2012

2011

PERSONALLINES

COMMERCIAL CLAIMS



The OSTI is the external preferred channel of complaints

for Santam. OSTI experienced an average turnaround time

of 174 days in 2010. Since introducing the Santam internal

arbitrator to support client care managers and the OSTI

on these complaints, the average turnaround time for

complaints through the OSTI has decreased to 139 days.

The internal arbitrator has also become a preferred channel

for the escalation of non-OSTI complaints with a turnaround

time of 10.5 days. This assists clients to resolve their

queries faster and reduces costs for the OSTI.

Santam is represented on the OSTI board and we work with

the Ombudsman to facilitate the improvement of processes

sources of complaints 2012 % 2011 % 2010 % 2009 %

osti 934 21% 986 25% 1 042 44% 1 165 53%

non-osti 3 540 79% 2 998 75% 1 331 56% 1 017 47%

total 4 474 3 984 2 373 2 182

avEragE nuMbEr of coMPlaints PEr Month 373 332 198 182

catEgory

gEnEral sErvicE 702 16% 471 12% 256 11% 224 10%

Policy adMinistration/undErWriting coMPlaints 691 15% 651 16% 297 13% 246 11%

coMPlaints about claiMs 3 038 68% 2 833 71% 1 789 75% 1 684 77%

coMPlaints by intErMEdiariEs/tradE PartnErs 43 1% 29 1% 31 1% 28 1%

total 4 474 3 984 2 373 2 182

to ensure a more efficient resolution procedure in the OSTI

office as this ultimately benefits our clients.

Factors that have contributed to the higher number of

complaints in 2012 include increased client awareness,

the impact of the CPA and FSB Treating Customers Fairly

guidelines and the impact of social media networks. Santam

complaints represent less than 1% of policyholders and 1%

of all claims registered.

Turnaround time on client complaints has improved by

26% since 2011, including complaints received via the OSTI

which go through a much longer process to resolve.



cliEnt Privacy and confidEntialitySantam collects and stores a significant amount of

information in the course of doing business. We have an

ethical and legal duty to safeguard client information.

Failure to do so would put us in contravention of the

Electronic Communications and Transactions Act and the

Protection of Personal Information Bill (PoPI).

The PoPI is still under discussion and is expected to be

enacted in 2013.

The important aspects of data privacy that need to be

considered are that:

− information is used for the stated purpose it was

gathered for;

− there are strong controls regulating access to, and the

use of, this information; and

− there are measures in place that protect the information

once it is drawn out of the database.

How we manage access to information

Santam’s existing policies and procedures protect

policyholder information. Client information in our system

databases is protected. Our overall controls are being

reviewed against the requirements of the PoPI to determine

if any changes are required.

We conducted a review to identify potential areas of

development for all key business areas. We then developed

a roadmap to address these areas in 2013. A tracking

and monitoring system has also been rolled out across

the company to monitor information and identify possible

breaches.

management commitment anD control

Santam’s information security committee is apprised of the

common law requirements and the PoPI. The committee

approved the planned approach to ensure that we comply

with the Bill once enacted. The information security

committee provides strategic direction for compliance with

protecting client information.

The committee is chaired by the chief information officer

who reports to Exco. The head of information management

is responsible for the protection of information. Overall

access to data and privacy control is managed by the IT

business unit within Santam. Bulk extracts and exchange of

client data with external parties are authorised by a single

senior person within the IT business unit. This ensures

that the data is correctly tracked and that the distribution

of data is monitored. An identity and access management

risk treatment plan and information classification guide are

also in place. This will further improve the controls around

managing access to confidential information.

The corporate legal business unit assists by keeping

management up to date on the laws that apply to them and

offers advice on the best ways to comply with these laws.

Information owners in each division have been identified.

With the head of information management (chair) they form

a forum where issues around data privacy and progress

towards full compliance with PoPI are discussed and

managed.

eDucation

The legal compliance team highlights the sensitivity of

handling client information through:

− articles in our weekly employee newsletter (Today@

Santam);

− Compli-Alert, a newsletter to management;

− the intranet; and

− targeted emails to employees who have access to

policyholder information.

Further training will be rolled out across the relevant

business units during 2013.


− Turnaround time on client complaints has improved by

26% since 2011, including complaints received via the

OSTI which go through a much longer process to resolve.

− Safend tracking and monitoring system has been

installed on all workstations.

− Client complaints have decreased.


− Align with TCF and PoPI requirements.

− Social media training and education.

− Appropriate technology to support client care.



nEW MarkEts and Product alignMEnt

Santam extends the risk mitigation benefits of short-

term insurance to areas where it is needed. We do this by

developing products that meet the needs of underserved

markets at the right price. This assists in social upliftment,

helps the country achieve its development goals and opens

up new growth markets for the company.

How we manage growtH in tHe emerging market

Products are offered at appropriate premiums in the

emerging market. The challenge to further develop the

market still pertains to the chosen distribution channels,

costs involved in product distribution and premium

collection. We believe that the development of our black

intermediary network will provide further access to this

market. However, our business model in these markets

requires high volumes to offset the low margins on

the products.

Our approach, which is to collaborate with various affinity

groups who bring clients loyal to their brand has been

successful. We support our partners with our end-to-end

insurance value chain which includes product development,

marketing collateral and training to ensure that our

approach is easy to understand and transparent. Successful

growth in this market starts with education about

insurance products.

Our main partner in education is SAIA which runs various

consumer initiatives around the country. We also work with

the industry to develop affinity markets responsibly through

active participation in the SAIA Consumer Education, Access

and Micro-insurance committees.

proDucts fulfilling a growing environmental consciousness among consumers

Santam is committed to raising awareness of environmental

issues and developing insurance solutions that align with

this approach. Solutions that consider our long-term impact

on the environment help us to:

– ensure a sustainable client base and operating context

into the future;

– open up new markets; and

– fulfil part of our commitment to insure properly.

However, engagements with clients show that the

environmental positioning of our products is not a high

priority. Nevertheless, we actively continue to explore ways

that we can make a positive difference to climate change

through our product solutions.

How we manage proDucts fulfilling a growing environmental consciousness among consumers

As previously mentioned, the Santam systemic risk

committee works with product development to explore new

solutions which offer an environmental value proposition

across our business. We also monitor trends in the global

insurance market to see where products or solutions may

MatErial issuE: Ability to enter new markets

stratEgy Pillar: Manage the risk pool


Solutions aligned with social and environmental needs

n


Growth in the emerging market; Products fulfilling a growing environmental consciousness among consumers

on tHe move

Centriq’s On the Move community partnership

insurance product benefits the cycling community

in a number of ways. Currently in pilot at a number

of popular on-road and off-road cycle routes in

Johannesburg, the initiative sponsors an ER24 team

and a rapid response vehicle that sweeps the routes

to assist cyclists. Cyclists can use a Move Insurance

wristband which links their personal information to

a PIN which is accessible by emergency services in

the event of an accident.

The community component of the initiative targets

unemployed youth, trains them in basic first aid and

bicycle mechanics and equips them with bicycles.

They are then employed to patrol the cycle routes

and help cyclists in need.



be applicable to our market. Examples of the work that we

are doing include:

– Solar geyser initiative – This project gives clients the

opportunity to replace damaged geysers with solar

geysers, thereby reducing their energy consumption

and carbon footprint. Uptake on the solar geyser

replacement initiative has been slower than expected

due to the high upfront costs involved.

– Agriculture and climate risk – Santam’s agricultural

policy-writing procedures are based on over 80 years

of crop and hail research, and the information we have

gathered from our experimental farm. We believe that

the effects of climate change, especially as they relate

to the agriculture industry, are not well understood

at present and need to be communicated to raise

awareness on the issue.

We have a top agricultural meteorologist in our climate risk

team. One of the benefits of access to “thought leadership”

and depth of research is that we can make our products

more relevant and useful to our clients. We also improve

our underwriting capabilities by involving our in-house team

and precision farming. Our experimental farm allows us the

opportunity to refine our assessment procedures through

testing new cultivars and enables us to show our clients

(intermediaries and farmers) how we assess claims and

why we do not insure certain crops.

“WE suPPort our PartnErs With

our End-to-End insurancE valuE

chain.”

Crop insurance penetration among commercial farmers is

around 30% but almost zero for subsistence farmers. We

believe that crop insurance subsidies would help to make

subsistence farming more sustainable and support food

security in our country. We have been engaging with the

Department of Agriculture and Forestry on this issue and

are positive about the progress being made.


– Rain index crop cover is available in several African

countries, including Tanzania and Zambia which allows

farming communities to improve food security and self-

sufficiency.

– Continued engagements with government to assist the

agricultural sector to help the sustainability of upcoming

farmers.


coMMunitiEs

CSI initiatives seek to create a stable and prosperous society

by influencing the development of our country’s youth –

specifically their educational development, their future

ability to earn a living and their security.

Helping improve future living standards helps improve

the health, education and productivity of our future

employees and increases the pool of future purchasers

of insurance products. Addressing crime builds stronger,

safer communities and will reduce crime-related insurance

claims.

We also recognise the value of CSI initiatives as catalysts

for employee engagement, enhancing employee morale and

building good working relationships.

How we manage csi

Our approach to CSI is formalised in our CSI strategy

and aligns with the requirements of the BBBEE Act, the

Department of Trade and Industry Codes of Good Practice

(dti CoGP) and the Financial Sector Code (FSC).

Delivery on our projects takes place through partnerships

with non-profit organisations (NPOs), non-governmental

organisations (NGOs) and public benefit organisations

(PBOs). Project management is closely monitored and

all beneficiary organisations have signed Memoranda of

Agreement.


Santam has three broad categories of CSI programmes:

− youth development;

− youth entrepreneurship; and

− youth security.

youtH Development

Our flagship youth development project is the Santam Child

Art programme which celebrated its 49th year this year.

The project comprises an art competition, online exhibition,

a calendar, art classes and educator development. The

emphasis of the programme has shifted from the art

competition to building capacity among art educators with

a view to encouraging and inspiring children to use their

creativity.

More than 6 278 entries were received from more than

250 schools around the country for 2012 – nearly double

the number of entries in 2011. The increase was due to

the successful educator workshops held during the year in

collaboration with the Ibhabhathane Project, an NGO that

empowers people through art and education.

Practical training was presented to 650 Grade 4 to 6 art

educators in the KwaZulu-Natal and Limpopo provinces.

This training focused on the skills and techniques needed

to introduce the new Curriculum Assessment Policy

Statements (CAPS) curriculum, with special emphasis

on arts and culture. Creative art training was extended

to curriculum advisors as well as educators from special

needs schools in Limpopo.

youtH entrepreneursHip

Exposing learners to the concepts of entrepreneurship

introduces them to the skills they will need to build

sustainable futures for themselves and the country. We

sponsor learning materials and training to educators in the

Eastern Cape and North West provinces through the South

African Institute for Entrepreneurship (SAIE). The project

started in the Eastern Cape after SAIE research showed

that more than 50% of matric learners failed their Business

Studies paper in 2009.

The Business Ventures programme provides learners in

Grades 9 to 12 with access to business skills to stimulate

entrepreneurial qualities, help eradicate poverty and ensure

sustainable economic development. The programme

provides extra support to educators teaching Business

Studies. Santam has committed R3.9 million over four years

to this programme.

MatErial issuE: Transformation



Extending influence for the benefit of society

p


Aligning CSI initiatives with social, business, economic and environmental needs; Our broader socio-economic influence on society specifically through stakeholder engagement



Santam-sponsored learning materials and training were

provided to educators from 66 schools in the Eastern Cape

and North West provinces. This assisted in exposing more

than 36 500 learners to entrepreneurial skills. The initiative

also ran a business plan competition, which received

154 entries from 58 schools. During 2012, 236 educators

received training, support and classroom visits.

Feedback from educators has been mixed regarding

entrepreneurial and business knowledge among learners.

However, they have seen improved self-confidence and a

promising ability to apply business knowledge.

youtH security

We partner with the National Institute for Crime Prevention

and the Reintegration of Offenders (NICRO) in the schools

of Mpumalanga, Eastern Cape, KwaZulu-Natal and Western

Cape to reduce crime. The programme offers learners a

safer environment in which to develop and it improves their

chances of developing to their full potential.

The NICRO Safety Ambassadors Programme trains groups

of 20 to 30 learners from each school in assertiveness,

decision-making, socialisation and resilience. These

learners are trained to promote and reassert these values in

their schools so that the programme touches more than the

number of ambassadors trained. These learners are also a

support to Life Orientation educators.

The NICRO Safety Ambassadors Programme was rolled out

to four schools in the Western Cape and KwaZulu-Natal,

in addition to the existing schools in Mpumalanga and the

Eastern Cape. More than 750 Ambassadors have been

trained since the programme was implemented in 2010.

We invested a further R990 000 in the programme in 2012,

bringing our total investment to date to R2.4 million.

MaJor sPonsorshiPs and donationsArea rm value %

Education 4 705 049 46%

arts and culturE 1 876 340 18%

youth sEcurity 1 141 696 11%

hEalth 44 544 0%

social dEvEloPMEnt 210 430 3%

EnvironMEntal 189 400 2%

ovErhEads 1 560 123 15%

othEr 470 377 5%

employee contribution anD volunteerism

Employees make direct monetary contributions (deducted

monthly from their salaries) to the following charities:

− The National Council of the Society for the Prevention of

Cruelty to Animals (SPCA)

− Reach for a Dream

− Wildlife and Environment Society of South Africa (WESSA)

− CANSA

− CHOC Childhood Cancer Foundation South Africa

− The South African Red Cross Society

− The African Children’s Feeding Scheme

− The Ithemba Trust

− Cotlands

− The Desmond Tutu HIV Foundation

More than 300 employees contributed R124 735 for the year

(2011: R135 027).

Many employees are also active within their own

communities. We recognise the value of these initiatives

for community building. Where appropriate, Santam

supports these “community heroes” by contributing towards

the achievement of their goals. This year 17 beneficiary

organisations benefited from this initiative. Projects range

from individual projects to small ad hoc projects that may

be initiated by individual business units as a means of

gaining an understanding of new markets.


aD Hoc projects

Santam has also been involved in or provided support for

a number of ad hoc projects:

maboneng: township art experience – Santam participated

in the Maboneng Project’s inaugural event in the Cape Town

township of Gugulethu, by donating the funding towards

the festival which endorses the development of townships

as artistic hubs and encourages the creation of jobs and

economic opportunities through the medium of arts

and culture.

mandela Day – 19 Santam teams nominated organisations

in their communities for their 67 minutes of charity work.

The CSI business units donated R5 000 towards each

charity to enable employees to participate in the activities

they identified. These stretched across a range of initiatives

including foster homes, schools, feeding schemes and

sports clubs.

sapa conference – The CSI team attended and sponsored

the South African Principals’ Association (SAPA) conference

in Bloemfontein. As our CSI projects are mostly focused on

learners, this is an important means of engaging with key

stakeholders in the process.

arts aweh! – Santam funded a youth development

programme at the Infecting the City public arts festival. The

programme aims to raise the cultural awareness of young

people, develop their knowledge of art and grow cultural

audiences for the future.

csi strategy review

The new CSI strategy was developed in consultation with

internal and external stakeholders. The strategy:

– Directly aligns with Santam’s core business of risk

management.

– Is geared to proactively manage systemic risks.

– Addresses issues that threaten Santam’s sustainability.

The strategy focuses on safe and secure community schools

and will be implemented in 2013. The current projects will

continue to be supported apart from the SAIE programme.

This funding cycle ends in 2013.




The revised strategy consists of three pillars:

– Developing capacity at a school leadership level

to manage social risks.

– Setting up after-school extra-mural and recreational

activities.

– Improving physical security in schools.


− Finalised new CSI strategy.

− Doubled the number of entries for Santam Child Art

programme.

− Art educators’ training was extended to Curriculum

Advisors and special needs school educators.

“santaM suPPorts thEsE ‘coMMunity hEroEs’ by

contributing toWards thE achiEvEMEnt of thEir goals.”


− Implement the new CSI strategy on Safe and

Secure Community Schools and align current

programmes.

− Roll out Grade 4 to 6 Creative Art Educator

Training in KwaZulu-Natal province.

− Obtain accreditation of the Grade 4 to 6

Creative Art Educator Training Manual

from the South African Council for

Educators (SACE).



suPPliErs

When a policyholder’s motor vehicle needs to be repaired

or we need to process a commercial claim for goods

destroyed in a fire, we rely on our supplier base to provide

an excellent, cost-efficient service.

Santam’s procurement spending is significant and we

have a responsibility to direct it in a way that develops our

suppliers for current and future requirements. We also need

to ensure that suppliers align their operations with our

approach which includes caring for the health and safety of

their workers and respecting the environment.

We direct our spending to black-owned suppliers who align

with our sustainability aspirations. Through this, we advance

South Africa’s transformation priorities while deepening the

skills base in our industry. The existing supplier skills base

needs to be further enhanced with the appropriate training

programmes for artisans and professionals to cater for the

huge leap in technology in almost all the products we deal with.

How we manage preferential procurement

Santam’s preferential procurement policy aligns with the

BBBEE Act, the dti CoGP and the FSC.

The dti CoGP preferential procurement targets changed to

70% in 2012 as the codes move into the next five-year cycle.

We are realigning our internal targets to ensure that we

reach the revised target as soon as possible.

BBBEE status is a critical element of the supplier approval

process and existing suppliers must produce a BEE

certificate at least once a year. Santam’s operations

and governance unit monitors and reports preferential

procurement progress and non-compliance.

PREFERENTIAL PROCUREMENT SPEND

86.05%

66.64%

44.42%48.10%

2009 2010 2011 2012*

* Unverified

0.0%

10.0%

20.0%

30.0%

40.0%

50.0%

60.0%

70.0%

80.0%

90.0%

100.0%

Our overall strategy is to source mainly from level 4 or higher

BBBEE suppliers. Our current focus is on increasing the

number of black-owned, and particularly black women-owned,

businesses with which we contract as these criteria become

even more important with the current dti CoGP revision.

The group sourcing unit handles procurement for the

Sanlam group. Our challenge is to bring in new suppliers

while ensuring that we meet our price constraints and

maintain high levels of quality. The motor body repair

industry is a difficult industry in which to become

established. This is due to the high capital cost of obtaining

original equipment manufacturer approval and exposure

to foreign exchange fluctuations in the purchase of

replacement parts, most of which must be imported. It is

also an industry with few women-owned businesses.

International supply-chain best practice favours the creation

of supplier partnerships to build sustainable businesses in

the supply chain. We are beginning to see the benefits of the

partnerships forged in the last few years. For example, with

the introduction of alternative glass through our Glass Lab

partnership, our partnership in the towing industry and the

benefits we realise from our incident management partners.

We are investigating other areas in which to set up

similar partnerships. The Santam Resilient Investment

fund was established in February 2013 and will take

these partnerships to the next level. We will target small

businesses that have the potential to impact our business

from a claims ratio perspective and invest in them to help

them grow into medium-sized businesses.




A sustained supplier base l


Preferential procurement; Environment, health and safety in the supply chain



PREFERENTIAL PROCUREMENT SPENDBLACK-OWNED BUSINESSES

5.46%

6.18%

4.80%

4.20%

2009 2010 2011 2012*

* Unverified

0.0%

1.0%

2.0%

3.0%

4.0%

5.0%

6.0%

7.0%

0.92%

1.77%

PREFERENTIAL PROCUREMENT SPENDBLACK-WOMEN OWNED

1.20%

0.73%

2009 2010 2011 2012*

* Unverified

0.0%

0.2%

0.4%

0.6%

0.8%

1.0%

1.2%

1.4%

1.6%

1.8%

2.0%

How we manage environment, HealtH anD safety in tHe supply cHain

Our preferential procurement policy includes clauses

promoting sustainability concepts with suppliers.

Environmental, health and safety concepts are influenced

at a high level with the various representative supplier

associations. At an operational level, these concepts are

enforced in the relevant clauses of the supplier contracts.

Representatives from the quality assurance business unit

review suppliers frequently to assess compliance with

contract terms, including safety, health and environmental

specifications, where there are obvious breaches.

Internationally recognised certifications such as OHSAS

18001:1999 (Occupational Health and Safety Assessment

Series) or ISO 14001:2004 (International Organisation for

Standardisation) and their local South African Bureau of

Standards (SABS) equivalents are too expensive for most

SMEs. In such cases, Santam requirements are adapted and

aligned without compromising quality and service levels to

the policyholder.

In health-related areas, our approach is to research the

prevalence of HIV/Aids policies in our supplier base and

inform them of the benefits of such policies where relevant.

We share our policies with our suppliers with a view to

assisting them in adopting these in their own businesses.

key HigHligHt for 2012

– Increased black women-owned supplier base.


− Promote the appointment of black-women

and black-owned suppliers.

− Consolidate the supplier base across the

respective business clusters within the

Sanlam group to identify capable black

suppliers in one area to grow the supplier in

other areas.

− Build key partnerships with strategic

suppliers to ensure a sustainable supply.



transforMation

Transformation is a key strategic driver for Santam. In

supporting the principles underlying transformation, we

contribute to social upliftment, bring in the skills needed for

future growth, develop intermediaries, affiliates and portfolio

managers that align with these markets and extend our

influence to suppliers, business partners and government.

Raising the standard of living in the country should also

help reduce crime, break-ins and robberies and reduce the

number of man-made risks we cover.

How we manage transformation

Santam’s transformation strategy is implemented by the

transformation committee. This committee comprises

senior change agents that address broader transformation

issues and is headed by the CEO. The transformation

advisory group reports to the transformation committee

which is assisted by the NEEF that is responsible for driving

employment equity in the group.

The executive head of people and brand oversees the

transformation management function for the SES

committee.

The transformation strategy aligns with the requirements of

the BBBEE Act, the dti CoGP and the FSC.

Transformation progress is tracked during the year and

independently verified in terms of the dti CoGP once a year.

ownersHip

Approximately 10% of Santam’s shares are held in a special

purpose vehicle. These shares are held for the benefit of

three key black stakeholder groupings – communities,

business partners (including intermediaries) and employees.

emtHunzini bbbee community trust

Santam’s CSI team provides administrative support to

the Community Trust, managing grant allocations and

monitoring the progress of funded projects. Beneficiary

organisations are also supported by an external consultancy

that teaches them how to develop targets and monitor

outcomes. All funded organisations meet once a year to

share their learnings.




Transformation including ownership and control

q


BBBEE in line with dti CoGP

“transforMation is a kEy

stratEgic drivEr for santaM.”



project nature of programme

ProJEct gatEWay Various community development projects including healthcare, socio-economic upliftment and education.

Early lEarning rEsourcE unit (Elru) Increases access to and improves quality in early childhood development services and programming.

businEss adoPt-a-MuniciPality Helps municipalities build capacity for service provision.

intErnational WoMEn's fund Aims to educate, empower, nurture and mentor the next generation of women leaders in South Africa.

coMMunity chEst WEstErn caPE Various community upliftment projects.

WoMEn on farMs Strengthens the capacity of women who live and work on farms to claim their rights and fulfil their needs.

univErsity of north WEst – school of agriculturE (dEPartMEnt of aniMal hEalth)

Community outreach programme that focused mainly on primary animal healthcare.

school @ thE cEntrE of coMMunity Mobilises business, government and civil society to collaboratively meet the educational challenges facing South Africa.

EMthonJEni fountain of lifE Supports people suffering from HIV/Aids.

The approved community projects are:

emtHunzini bbbee business partners trust

Allocations to strategic business partners, intermediaries,

the Sanlam Business Partner BEE Staff Trust and non-

executive directors were made in August 2010. Allocations

to non-executive directors were made in 2011. No further

allocations were made in 2012.

emtHunzini bbbee staff trust

Units were allocated to new employees and those promoted

during the year.

management anD control

At 31 December 2012, the Exco comprised 11 members,

three of whom were black. The continued intention is to

increase the black representation at Exco level.

Santam’s approach to improving senior management

representation is to develop strong internal candidates

through talent identification and succession planning

programmes.

Succession and talent management are discussed at formal

quarterly Exco discussions. All executive performance

contracts include a weighting for progress against

“skills dEvEloPMEnt is iMPortant With

a Particular EMPhasis on

lEadErshiP dEvEloPMEnt

training.”



Trust allocations Business partners employees community

sharE in santaM’s bEE schEME for allocation 49% 26% 25%

allocation yEar on yEar

Portion allocatEd as at End 2012* 68% 69% 5%

Portion allocatEd as at End 2011 71% 78% 5%




Portion availablE for futurE allocation to nEW PartnErs 32% 31% 95%

transformation targets, including mentoring of a specified

number of black managers on the senior grid. The CEO

and executive head of people and brand discuss issues

of development and succession within the context of the

broader Sanlam group with the Sanlam CEO.

employment equity

Our EE score decreased to 5.13 (2011: 7.53). This remains

the area we have had the most difficulty in addressing. Our

approach to EE is discussed in the Employees section on

page 22.

skills Development

Skills development is an important focus area for the

company with a particular emphasis on leadership

development training. We believe that this will address the

transformation challenges we currently experience at senior

management level. Our skills development approach and

initiatives are discussed in more detail in the Employees

section on page 22.

preferential procurement

We allocate our procurement spend to companies that have

made significant progress in transformation, environmental

and health and safety. Transformation status is a critical

part of our supplier selection basis and we review supplier

BEE certificates annually.

More information on our approach to preferential procurement

can be found in the Suppliers section on page 43.

enterprise Development

Santam, together with Centriq, established Ground Up

Community Cycling Initiatives (Pty) Ltd (“Ground Up”), an

entity that will employ, train and equip EE personnel to

provide safety and security services at selected cycling

events. Refer to page 36 for more on Centriq’s On the

Move initiative.

broker Development

Our enterprise development initiatives centre around the

SBBDP which is discussed in the Intermediaries and UMAs

section on page 27.

corporate social investment initiatives

Our investment programme supports disadvantaged

youth and contributes to the future of our country. Our CSI

initiatives are discussed in detail in the Communities section

on page 38.


– Santam maintained a BBBEE level 3 status for 2011

(verified) and for 2012 (unverified).


– Align our BBBEE processes and systems to

the Financial Sector Code.

* Includes units forfeited to date.

social sustainability - santam · underwriters and assessors is being addressed within the broader...

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