Namibia: Interview with Tertius Stears

Tertius Stears

General Manager (Sanlam)

Tertius Stears

Sanlam is the leading financial service and insurance company in Namibia. The vision of Sanlam Namibia is to become the “benchmark of excellence” for the financial services industry. Could you give us your thoughts on the evolution of Sanlam activities from its creation to today?

A case in point re the evolution of Sanlam is the chance we have implemented in our vision. It is no longer as you noted, but has evolved to a vision that is much more exact and descriptive of our activities, namely “to be the trusted and dynamic leader in wealth creation and financial solutions” in Namibia.

As concerns your question: When it was established in Namibia more than 70 years ago, Sanlam Namibia used to be a mere branch office of its South African mother company, basically just a clone of the bigger organization. This was good at the beginning, but was in the long run, not acceptable to our board and neither to our management team. We needed our independence, we needed an organization that was agile and quick to adapt to change, could provide in the unique insurance and other financial needs of the Namibian nation, with other words was totally Namibian in all its facets.

We initiated merger negotiations with a number of other players in the Namibian financial services industry some three years ago with the aim to partially consolidate the industry in Namibia. This merger resulted in the creation of Consolidated Financial Services Holdings Ltd, with both local and South African shareholding. We no longer have only South African shareholder (as was the case when we were still Sanlam Namibia proper), but now both local and foreign shareholding. Via this shareholding we have strong Namibian union representation as well, thereby showing our commitment to broad-based black economic empowerment.

Speaking of empowerment, empowering Namibians is one of our key drivers. Not only are our processes and procedures totally Namibian and run by Namibians, so is our infrastructure, our entire modus operandi. We believe in building local capacity, developing the skills and enhancing the knowledge of our country’s citizens.

As part of the CFS transaction we are now also getting fully engaged in so-called bankassurance, being the cross-fertilization and selling of insurance and banking products to the benefit of both customer bases.

So we have definitely grown from a small branch office of a South African life assurer to a fully-fledged Namibian financial services institution serving the entire nation.

Could you tell about some of your company’s key figures for the last year 2005?

There is one figure that stands out above all the rest and that is taken as yardstick to measure success – bottom line. Now being a newly established company (CFS was established July 2004), we obviously have to deal with a great deal of “growing pains”, new business strain being one of the most crucial and hard-impacting in the long-term insurance industry.

Whilst being focused on long-term sustainability and growth of the company, initial years for a long-term assurer are usually hard. Even though it may do well in terms of new business inflows, it doesn’t look good in terms of bottom line profit. The simple reason being that up-front expenses (commission etc) is taken off the bottom-line before the real returns start showing a few years down the line.

Growth on Previous Year
Life APE 161 10%
Non-Life 1 567 mil 19%
Nub EV 6.2 mil
Growth in EV 39%
Total EV (Life) 139 mil

So the key figures would be APE (Annual Premium Equivalent), which is good and EV Growth, which is what we expected for the first years.

The company has undertaken various major Namibianisation initiatives to position Sanlam Namibia as a truly Namibian company. Could you please tell us a little bit more about the main points of this strategic planning process?

Our goal is to be completely Namibian. Our employees are Namibian with the exception of one. And this only because this person is in a field that is so specialised. Other than that, we believe in building local capacity, training and developing Namibians to run the company and take it into the future.

After we Namibianised our organisational structures and populated them accordingly, we moved on to product. We moved away from the South African product platform (IT platform on with we develop and run our products) to a Namibian-run and maintained platform. This was necessary because of our goal to develop and successfully service Namibian products for our Namibian customer base by Namibians off Namibian soil.

I have mentioned the Namibian shareholding – via this shareholding we have strong links to the banking sector as well as the union sector in Namibia.

Sanlam has some well established competition here in Namibia. What are the competitive advantages you have in front of those companies?

Where others are still very much dependent on their South African or other mother companies, we have Namibianised our operations to such an extent that we are independent, with independent, local, immediate decision-making and implementation. This makes our operations and our products custom-made for the local market, not merely an adaptation of the foreign product. We can thus respond directly, immediately and effectively to the needs of the Namibian customer.

Can you tell us more about any upcoming projects the company may have?

We are always open to all possibilities for expansion and consolidation in the market. We are of the opinion that the Namibian market is seriously over-traded and that there are simply too many players in the country, and this is not necessarily to the benefit of the customer.

As far as concrete projects are concerned, we will, for the immediate future, be devoting a great deal of time and energy to rolling out our organic growth strategy and the strategy to regain market share.

Your government has set a goal that you call “Vision 2030” which aims to see the country prospering in many ways (economically, poverty eradicating, attract international investments, etc). How would your company contribute to this?

We have been contributing to the growth of the nation ever since Sanlam established its first branch office in Namibia in 1928. We provide not only cover to individuals as far as death, disability, retirement, funeral and so forth are concerned, we help in fostering a savings culture, to make individuals independent, and not reliant on government hand-outs. We have, since our inception, paid out billions in benefits to our customers who have pumped it back into the local economy.

We provide companies with vehicles to invest their money via our Collective Products platform – via our investment vehicles we, as per government regulation, invest at least 35% in Namibia to contribute to the development and growth of our nation. Our Collective Products platform currently holds 70% of the total Namibian investment market when it comes to Unit Trust and other collective product vehicles. Talking of investments, our asset management company, Sanlam Investment Management (Namibia) is one of the preferred asset managers in the country. We of course invest in the country too via fixed assets, like this building for example.

Not only to we contribute to nation building via our direct operations (namely individual and company insurance and savings) we also do so via our Corporate Social Investment programme, through which we contribute to health promotion, sport development, education, and so forth.

With the new CFS we will thus continue contributing to Vision 2030 in the above fashion by boosting the Namibian economy in the way we have done for years.

Your personal experiences are also of interest to us. Could you tell us about your career up to your promotion to General Manager of Sanlam as well as your greatest accomplishment during your time as General Manager?

I am currently acting in this position. Our previous MD has resigned, and we are in the process of finding a suitable replacement for him. So you’ll excuse me if I do not respond to this one.

We’re here in the Republic of Namibia to promote the investment opportunities of the country. What would your final message be to our readers concerning these opportunities?

Namibia is a country that abounds with opportunity. We have great potential for investment in the mining, tourism, fishing and other industries. Our labour situation is stable, we have peace and stability in our country as far as the political arena is concerned. Our government is committed to growth and development of the nation, dedicated to the eradication of corruption and focussed on maintaining a positive environment for investment and partnership. And, of course, you have great potential partners in Namibia, like Sanlam Namibia for example