Strategic plans & actions

Transcription

1 Strategic plans & actions Themba Gamedze CE, Sanlam EB Where were we in the new business EB market in 2003? Investments 6% market share Punished for long period of underperformance Risk benefits Good solid business to protect Innovation possibilities exist 20-25% market share Administration 20-25% market share Positive contribution in 2003 Better client segmentation required Opportunities from outsourcing trend by mega funds

2 How did we get here I? New business market share history Type 1993 SP 26.3% RP 32.3% % 15.6% % 16.8% Recurring premium business declined steadily to 1998/9 but has shown an improving trend since then Single premium business is more rewarding and more punishing than RP the last five years have been disastrous How did we get here II? Annualized growth rate in SP Subsector Sanlam 5,2% 28,9% -14,2% Rest of market 25,1% 31,7% 13,2% While the rest of the market doubled its SP revenue from 2000 to 2003, Sanlam s SP revenue halved Sanlam has had some difficulty with this business for quite a while although the intensity of the problem has been in the last 5 years or so had a large number of factors working against us

3 Too many things went against us in a time of rapid change I Major distracting corporate events Demutualisation The Metropolitan almost merger The Gensec merger/demerger flip-flop Series of rapid destabilising changes at the top Unfruitful full merger discussions with ABSA Too many things went against us in a time of rapid change II Rise of the specialist asset manager Dominance of gate-keepers in middle market Sustained investment underperformance Shift to multi-management (IS/M3 etc) Unfavourable positioning in new SA Old Mutual s relative speed at adapting Aligning distribution leadership Target market strategy (incl. Negotiated Benefits)

4 What needs to be done in EB Distribution? Mega Funds Institutional Sales Team Leverage off BEE credentials Recruitment of key black executives Strengthen positioning in public/parastatal/unionised markets Create large-case holistic solution philosophy Strategic deployment of specialists and executives Pooling of institutional solution capacity What needs to be done in EB Distribution? Mega Funds Institutional Sales Team Middle market Key Accounts (Specialist EB Brokers) Tackle very low Sandton market share Greater emphasis on technical value-add More active approach to relationships

5 What needs to be done in EB Distribution? Mega Funds Middle market Institutional Sales Team Key Accounts (Specialist EB Brokers) SME segment Individual life distribution Develop an appropriately structured umbrella fund solution What needs to be done in EB Client Solutions? Closer links with distribution Expand range of solutions Commit to a culture of innovation

6 What needs to be done in EB Operations? Extend CRM strategy Extract operational efficiencies Manage out marginally profitable business Drive SRL/SEB cross-selling initiatives Actions required to deliver a 2-year turnaround Aggressive steady outperformance is not enough Viability depends on shock therapy throughout Select recruitment of the very best professionals Distribution critical mass to be established in Joburg Cooperation with other institutional businesses Commitment to innovation through client-centricity Use cost savings in part to fund growth Create a jazzed-up look and feel to EB Institute a formal approach to strategic risk

7 What needs to be done in EB Strategic Ventures? Extract value from BFS Monitor mining of the UBI relationship Scan the market for JV opportunities Improve implementation lead time How is the shock to be administered? Tightly monitored asset retention programme Commercialise investment in administration systems Aggressive move into lucrative Sandton broker market Establish crack Joburg-based specialist sales team Extract value from bancassurance relationship Leverage off UB and BFS into empowerment markets Exploit JV potential in inaccessible segments

8 Targeted outcomes for 2008 Deliverable Single premiums Risk business Administration Net cashflow New EV % 22% 22% -R600m R46m % 25% 25% +R2 000m R250m What are our plans for delivery beyond 2007? Benefit from tied business of JVs Draw product ideas from UBI/BFS links Potential for acquisitions exists Sustain the value proposition Natural market share Acceptable new business margins Positive net cash flows Appropriate net unit costs