Welcome to Mind Matters weeks of 27 June and 4 July 

Global and local economic news 

Food inflation relief is within sight as crops and crude prices pull back

Four months after Russia’s invasion of Ukraine upended trade flows and sent futures soaring, fear of grain shortages is giving way to optimism that key producers will reap harvests large enough to help replenish war-pinched reserves. That’s critical for the wheat needed to feed the world; the maize to nourish pigs, chicken and cattle; and the oilseeds to process food. 

Bloomberg article of 3 min. This is a worldview, not a local one. 

World Bank funding may come back to haunt us

It should cause South Africans great concern that the government is receiving external funding from the World Bank to support the government’s Economic Reconstruction and Recovery Plan, writes Sindile Vabaza. He is concerned that the loans will become a noose around the necks of future generations, and that the incompetent and hubristic mess that is local government will still be unable or unwilling to direct the money to the areas where it’s needed most: to alleviate food insecurity in the country and ensure that the 78% of grade 4s who cannot read or write for understanding leave high school as functionally literate and numerate.

This is an opinion based on recent experience providing good insight. Solutions lacking. 4 min 30 sec read

Barclays to use its status to attract ‘global Africans’

Contrary to popular belief Barclays Plc continues to invest in its African banking operations. 

Barclays is looking to bank what it calls “global Africans” as it leverages its more than 330-year-old pedigree and status as a British universal bank to tap into new growth opportunities on the continent in the wake of its separation from Absa.

After selling half of its almost 15% remaining stake in Absa for £526m (R10.32bn) towards the end of April 2022, the UK banking giant retains about 7.4% of SA’s fourth-biggest bank, a stake it is now in a position to offload though it has not announced plans to do so as yet.

This article is reserved for Business Live subscribers. Your library may have one which will allow you to access it. It is interesting that Barclays still as a 7.4% share in Absa. 

Insurance and financial services

25 Years: The Journey of Cyber Insurance

This year marks the 25th anniversary of the cyber insurance market

While many industry observers view cyber coverage as a surging phenomenon in response to escalating incidence of random attacks, the first cyber policy was envisioned and crafted in 1997 to address a then perceived risk identified by financial regulators. The journey of cyber insurance launched to protect against a little-known exposure of Internet fraud related to cyber risk is today the hottest, fastest growing sector of the world’s insurance markets.

Trace the history of cyber insurance and consider how it is bringing into focus the elements in that ecosystem. 4 min read

What to Know About Hacktivism and Its Role in Global Conflict

A specific type of cyber threat has made its way to the front of the conversation in the wake of the Russia-Ukraine conflict, and experts say it could play an increasing role in global conflicts even beyond what’s happening in Ukraine.

Hacktivism, a combination of the words “hack” and “activism,” happens when individuals or groups break into a computer system in an act of civil disobedience that is socially or politically motivated, usually in an effort to promote change.

A short written article on hacktivism but a podcast of 19 minutes on this topic by the Insurance Journal. 

White paper: Ransomware: the true cost to business 2022

A global study on ransomware business impact.

You can download this white paper for free from the above site. It is also available for you to read on this site below. 

Advisory intermediaries urged to draw up agreements to limit their liability

The risk landscape in which FSPs are operating is becoming more complex and difficult, and advisory intermediaries should take steps to protect themselves by entering into service contracts that will limit their liability, says Steve von Roretz, director of Leppard Underwriting.

In a presentation at a recent InsureTalk webinar, Von Roretz said FSPs are not in a position, nor can they be paid enough, to guarantee their clients immunity from the expanding list of systemic risks – cyber breaches, climate change, infrastructure failure, to name but a few.

In recent months we had the same story from the American Carrier Management magazine and now it is here in SA on every insurer's agenda, risks that cannot be insured. 3 min 30 sec read. 

Asisa members unite R22.7bn with policyholders, investors, beneficiaries and heirs

The assets were held in 77 790 risk policies, savings and investment policies, annuity polices and accounts in collective investment scheme portfolios.

These unclaimed assets should be distinguished from the unclaimed benefits held by retirement funds, which the FSCA estimated at R47bn in its 2020/21 annual report.

Although not all tracing efforts would have resulted in a cash pay-out, it was likely that a large portion of the R22.7bn would have been paid to the legal owners of the assets in 2021, said Asisa senior policy adviser Rosemary Lightbody.

6 min read on the complexity of sourcing the beneficiaries and what the law has to say about unclaimed assets. 

Court flags bribery and sets aside takeover of R6 billion ‘blue collar’ workers’ pension fund

Pretoria - Employee benefits company NBC Holdings on Sunday said it feels vindicated after the High Court in Johannesburg reviewed and set aside the 2019 appointment of Akani Holdings to administer the over a R6-billion workers’ pension fund.

"Vindicated" is a big word, what does it mean for NBC in this context? Read more about this case and how well the justice system worked in this case. 4 min read 

‘Instant loans’ sign was sufficient grounds for investigation by the National Credit Regulator

A sign outside a microlender’s premises advertising “instant loans” and an employee’s verbal information that interest of 30% a month was charged on short-term loans were reasonable suspicion for the National Credit Regulator (NCR) to initiate an investigation into contraventions of the National Credit Act (NCA).

This was the finding of the Supreme Court of Appeal (SCA) when it upheld an appeal from the NCR and set aside an order of the Pretoria High Court in favour of Dacqup Finances CC trading as ABC Financial Services.

The appeal centred on what constitutes a sufficient trigger for NCR to initiate a complaint into alleged contraventions of the NCA.

A 4 min read. 

SARB eyes payments ecosystem regulation in SA

The South African Reserve Bank (SARB) has set its sights on regulating the local payments ecosystem.

This was revealed by governor Lesetja Kganyago in the central bank’s annual report published 27 June 2022.

“The SARB needs to regulate the payment ecosystem and ensure financial stability in a world of increasingly innovative and disruptive technology,” says Kganyago.

A 4 min read on why there is a need for regulation in this area.

Investments, including tech and crypto 

Smart Investment strategies stand to significantly reduce execution fees

It’s common knowledge that when you engage in financial transactions a range of costs are incurred. But investors may not fully appreciate the long-term impact of these costs on their total return. Whether a fund is actively or passively managed, you will have to pay to buy and sell securities. These will differ based on whether you’re investing in an actively managed portfolio, which requires ongoing research and analysis to identify and capture attractive market opportunities, or a passively-managed, portfolio, which replicates the performance of a pre-selected index, often by rebalancing (buying and selling) the underlying shares to achieve target exposures of that index.

Insight as to how to reduce fees and what fees can be charged. 4 min read

EU Seeks Agreement on Ground-Breaking Regulations for Crypto Assets

The European Union on Thursday will seek agreement on ground-breaking rules for regulating crypto assets as the rout in bitcoin piles pressure on authorities to rein in the sector.

Globally, crypto assets are largely unregulated, with national operators in the EU only required to show controls for combating money laundering.

Regulating crypto may be just around the corner. Find out what the regulations will focus on. What do you think about regulating crypto assets? A 2 min read. 

Will Reg 28 amendments actually boost SA infrastructure investment?

The chair of the Actuarial Society of South Africa’s investments committee does not expect local pension funds to rush into infrastructure projects because investable opportunities are scarce.

‘A 45% limit on infrastructure investment is meaningless if there is nothing to invest in,’ the chair of the Actuarial Society of South Africa’s investments committee, Andrew Davison, told Citywire South Africa during an interview.

The National Treasury gazetted the Regulation 28 amendments on 1 July, and they will take effect on 3 January 2023.

Some guidance on how to approach Regulation 28 and an opinion on how investors will respond to it. 3 min 30 sec read

Majority of European firms to stop launching non-ESG funds, report claims

More than 60% of European asset managers plan to stop launching non-ESG funds by 2024, according to a survey from PwC Luxembourg.

The PwC survey predicts that the share of ESG assets in European mutual fund assets could expand from 37% at the end of 2021 to 56% by 2025.

Firms that continue to offer both ESG and non-ESG products, on the other hand, could face long-term challenges, PwC wrote in its report.

This article has been selected to emphasise the trend that is becoming evident. 2 min 3o sec read

PODCAST | Mobile app that makes investment accessible to all South Africans

Host Mudiwa Gavaza is joined by Franc’s COO and CEO, Sebastian Patel and Thomas Brennan, respectively

Bringing down the cost of stock market investment is the focus in this edition of the Business Day Spotlight. 

Host Mudiwa Gavaza is joined by Sebastian Patel, Franc’s COO and Thomas Brennan, Franc’s CEO. 

Having attended the University of Cape Town together, Patel, an actuary, and Brennan, an engineer, launched Franc in 2017. 

A 37 minute podcast. It gives you the story of start up Franc and their principles of being successful through relevance. 

AI, technology

Re-imagining medicine’s future with the help of digital technology

Will artificial intelligence (AI) mean the end of some health professionals? Professor Tshilidzi Marwala, vice-chancellor and principal of the University of Johannesburg (UJ), writes in Daily Maverick that AI is merely a useful intelligent tool, just like magnetic resonance imaging. It will not replace radiologists, he says. Instead, it is spawning a new discipline that requires the understanding of both medicine and technology.

In his book Deep Medicine, Eric Topol writes: “Eventually, doctors will adopt artificial intelligence and algorithms as their work partners. This levelling of the medical knowledge landscape will ultimately lead to a new premium: to find and train doctors who have the highest level of emotional intelligence.”

An interesting piece drawing from a range of research showing how AI and humans do and could work together. 5 min read 

An end to underwriters? The challenges of machine learning

Is machine learning a threat to the underwriting practice? Reza Hekmat and Balint Bone consider this possibility and its challenges

In 2016, award-winning computer scientist Geoffrey Hinton stated: “We should stop training radiologists now. It’s just completely obvious that within five years, deep learning is going to do better than radiologists.”

Almost six years later, the UK has a record number of radiologist vacancies. Nevertheless, machine learning and its computer vision subclass have made huge strides since 2016. If Hinton were to repeat his quote today, it would not raise nearly as many eyebrows. Many in the insurance industry have begun to ask whether machines could now replace underwriters.

An article of substance from The Actuary which is the magazine produced by the Institute and the Faculty of Actuaries UK. 6 min read

Tech Giants Pour Billions Into AI, but Hype Doesn’t Always Match Reality

Google, Meta and OpenAI are investing heavily in the technology, which is increasingly capturing the public imagination

After years of companies emphasizing the potential of artificial intelligence, researchers say it is now time to reset expectations.

With recent leaps in the technology, companies have developed more systems that can produce seemingly humanlike conversation, poetry and images. Yet AI ethicists and researchers warn that some businesses are exaggerating the capabilities—hype that they say is brewing widespread misunderstanding and distorting policy makers’ views of the power and fallibility of such technology.

This article from the Wall Street Journal highlights some of the moral, philosophical and religious debates on AI. Be informed so that you can be sure of where you stand as AI takes over more of our lives and work. You will need a subscription for this article, but it is likely your institution will have one. 5 min 30 sec read.  

Health Matters 

Medical aid sector in good shape despite Covid-19 pandemic – Alexforbes

Index concludes that shrunken Discovery Health Medical Scheme membership was counteracted by growth in Gems affiliates.

Health branch head of technical and actuarial consulting solutions at Alexforbes, Paresh Prema, says since the inception of the index in 2006, the company noted that medical scheme uptake increased gradually over the years until 2019, when it remained unchanged before experiencing the 1% drop in 2020.

“The idea is not to ignore the public sector but for the private sector to acknowledge its role in providing a service to those who can afford it, without placing any additional strain on the public sector.”

A 3min read. 

NHI will be phased in, says Phaahla

Health Minister Dr Joe Phaahla has once again indicated that National Health Insurance (NHI) will be phased in based on the funds available.

Earlier this month, Dr Phaahla told a virtual event hosted by Momentum Health Solutions that the government planned to implement NHI incrementally and gradually phase out the role medical schemes play in funding private healthcare services.

The article has been chosen so that you get familiar with the roll out and what impact it will have on all levels. 3min 30 sec read

Health department will seek to have ‘anti-NHI ruling’ set aside

The Department of Health (DoH) will seek to set aside the Pretoria High Court’s ruling that a certificate of need (CoN) is unconstitutional and invalid, saying the court’s decision has “serious implications” for the implementation of National Health Insurance (NHI), Business Day reports.

The judgment must go to the Constitutional Court for evaluation before the sections of the National Health Act that relate to the CoN – sections 36 to 40 – can be scrapped.

What is your opinion in the matter? Do you think doctors should be able to work wherever they want to or where the need is greatest? 3 min read.

ESG, climate change and impact of human behaviour on nature

Arvana Singh of Nedbank CIB on spearheading sustainable growth

Bronwyn Nielsen spoke to Arvana Singh, head of Sustainable Finance Solutions at Nedbank CIB, about Nedbank’s move towards the and sustainability. These are key on its agenda and recognising the need to move forward with sustainability through mainstream finance is where the bank is setting its resources, focus and expertise.

A video interview of under 7 minutes or a 3min 30 sec read. 

Climate Change Driving Extreme Heat and Flooding in 2022: Report

A team of climate scientists published a study in the journal Environmental Research: Climate. The researchers scrutinized the role climate change has played in individual weather events over the past two decades.

The findings confirm warnings of how global warming will change our world – and also make clear what information is missing.

This article is from the Insurance Journal, another instance of the industry making its stakeholders more conscious of the unknown and increasing risks around climate change. 4 min read

Citywire documentary: Where have all the insects gone?

‘Do I think there’s an insect apocalypse? We’re heading towards one,’ says Dr Erica McAlister of the Natural History Museum in the first episode of Citywire's Restoring Nature’s Tapestry series.

It is so interesting that Citywire is producing documentaries on the natural world and it is a financial magazine - what is the connection? A 9-minute video

About you 

Peter Kaufman on The Multidisciplinary Approach to Thinking: Transcript and recording 

Mr. Kaufman does not normally allow his talks to be on the record, but is making a rare exception in this case.  He believes the message within this talk – that it is possible to succeed in business, yet fail in life – is critical for anyone interested in living a full, meaningful life, with minimal regret in later years.  He hopes that “going positive and going first”, “win/win”, and “going far by going together” are ideas that aspiring money managers will take to heart in their own lives.

For the transcript click on the title above, the recording can be accessed here.  This read is a half hour to 45 minute commitment. It is well worth it!

Four ways to stop thinking the worst will happen when you’re stressed

Imagine you have an interview for a new job tomorrow. Some people might think about what kind of questions they will be asked so that they can prepare, or imagine the interview going well. For others, the thought of an interview will cause them to toss and turn all night thinking of every worst case scenario possible – no matter how outlandish these may be. If you’re someone who has a tendency to do the latter, you are prone to catastrophising.

An easy to read article with good advice in four principles. 4 min read, also available below in .pdf 

Learn to Manage Your Anger

Suppressing your anger could lead to physical and behavioral problems. Instead, learn how to manage it. Yoga may be the perfect solution for exercising while social distancing—and it could improve your mental health. When your emotions get overwhelming, don’t be afraid to cry—even at work. Here are some tips from the experts.

A short article and a reminder of how important it is not to suppress your feelings. 2 min 30 sec read

Gratitude in the Workplace Can Improve Health, Stress Management

Expressions of gratitude in the workplace not only strengthen relationships between co-workers but can also improve stress responses to high-pressure tasks as well as impacting long-term health, according to a recent study from University of California San Diego’s Rady School of Management.

Why wait until you get into the workplace, start practicing gratitude in all your relationships. 2 min 30 sec read

So, You Think You Can Multitask

With all the electronics, smartphones, email and digital stuff that comes at us from every angle in this age of information overload, we not only have the opportunity to try to multitask, but many people think they are more productive by trying to do two or more things at once.

Here’s the bad news: You can’t multitask. Period.

This is so refreshing. Notice how as you give the reading 100% your brain takes in the detail with ease - no stress. That's what you want! 2 min 30 sec read