Welcome to Mind Matters weeks of 19 and 26 September!

A world view

The world’s democratic recession is giving China more power to extend authoritarianism

Over the last decade, the number of countries considered to be liberal democracies has contracted from 41 to 32, back to the same level as in 1989. In the same period, 87 other countries were labelled as closed autocracies or elected autocracies.

A 2021 survey by the Economist Intelligence Unit showed that only 8.4% of the world’s population lived in a fully functioning democracy, this shift is being referred to as a “democratic recession”.

Consider the consequences of handing over your freedom before you walk away from the topic of a democratic recession. This is must read. 5 min.

Local pain spots

Constantia Insurance goes into final liquidation

The High Court in Johannesburg has placed Constantia Insurance Company Limited (CICL) in final liquidation after granting the urgent application brought by the Prudential Authority (PA) and the short-term insurer’s curator at the end of last month

The sad news of an insurer going down is the harsh reality of our times. It won't be the first one this year. In the next paragraph see if you can fill in the missing words. Before going to the article!

The High Court placed CICL under provisional curatorship on 26 July following an ex parte* application brought by the ................... (PA), because CICL failed to meet the .......................... (SCR) and ................................. (MCR) prescribed by the Insurance Act.

Not wishing to reduce the seriousness of this case through a quiz, read this later paragraph and describe the meaning of  "a parlous financial position". 

The PA and the provisional curator submitted, considering CICL’s parlous financial position and the need to protect policyholders and creditors, that little purpose would be served in seeking a provisional liquidation order before obtaining a final winding-up order.

*Ex Parte Definition 

In law, ex parte is a Latin term meaning literally "from/out of the party/faction of", thus signifying "on behalf of". An ex parte decision is one decided by a judge without requiring all of the parties to the dispute to be present. Wikipedia

Consider the role of the actuary in a case where an insurer is placed under curatorship. What would they do to ascertain the financial position of the firm? 

Clarion call for hospital load shedding exemption

There has been a growing, increasingly angry call for an end to load shedding for South African medical institutions, with healthcare providers and professional bodies saying the blackouts are jeopardising patients’ lives and hampering service delivery, and in public institutions especially, adding to the existing burdens of inadequate facilities and crippling staff shortages.

When you are frustrated with load shedding think of the poor patients with their lives literally hanging in the balance because of it. As an insurer, what could you do to mitigate claims on the one hand and support the insured on the other? 3 min 30 sec read

Health and digital health 

South Africa needs more competition in provision of low-cost health benefits

There is no doubt that a significant portion of the South African population will readily purchase affordable private health cover in South Africa if such cover is available.

The routine General Household Surveys from StatsSA show that nearly 30% of the population pays for private primary healthcare on an out-of-pocket basis, yet only 13% of the population are covered by medical schemes, meaning there is a mismatch between the demand for private healthcare services and the affordability level to purchase such private cover.

This a good article providing background to the change in the ruling of 2017 to prevent Insurance companies from offering LCBOs. Paul Cox makes a persuasive argument to amend that ruling and allow for competition to provide an answer. What do you think may be the challenges of changing the law back to what it was before 2017 and the impact on the regulatory bodies? 6 min read

Datacentrix Healthcare Indaba 2022 focuses on urgent requirement for accelerated digital transformation in healthcare

Hybrid IT systems integrator and managed services provider Datacentrix recently held its inaugural Healthcare Indaba at Zebula Golf Estate in Limpopo Province, hosting an event that brought together South Africa’s technology leaders with healthcare industry players to discuss critical trends and insights within the sector.

“The slower rate of technology adoption in healthcare can be attributed to several factors,” he said. “The lack of standardisation across technologies, poor systems integration, highly customised systems and processes, physical on-site limitations, as well as hospital admission and administrative processes that are still largely manual are some that were mentioned.

An important point raised by keynote speaker Abdullah Verachia was that because people have become accustomed to a frictionless and seamless digital experience in everyday life, they expect the same from their healthcare providers.

What are we seeing here? A business to business opportunity (B2B). Note the reference to the health ecosystem. Who do you think are the key players and how do you see them working together? 6 min read

Momentum Health Solutions offers certainty to its clients in an ever-changing healthcare industry

Momentum Health Solutions has announced its healthcare solutions, benefit enhancements and product updates for 2023, with particular focus placed on how it will continue to support consumers amidst increasing costs of living and a healthcare landscape that is undergoing considerable reform.

Damain McHugh, Executive at Momentum Health Solutions concludes, “Momentum Health Solutions remains focused on innovation and problem solving and is committed to establishing holistic healthcare offerings that meet the needs of companies and individuals across the spectrum, uniquely positioning us to provide safe, affordable and seamless healthcare services to our clients and beyond.”

What do you think McHugh means by seamless in light of the preceding article and how do you think they will try and match that description? McHugh also makes the pledge to stand by government in its endeavours to bring about equal access to healthcare for all.  4 min 30 sec read

Considering taking out gap cover? Here’s what you need to know

Healthcare in South Africa is in a state of flux due to a shifting regulatory landscape compounded with the current economic challenges the country is facing.

The above article is from August and the one below is from September. These two articles show that the situation of flux within Healthcare is an opportunity for those with the infrastructure, to leverage off the advantage and assist those situated in a gap and those needing affordable cover respectively.  Each a 3 min read.  

NetcarePlus extends private healthcare to more people with more solutions

According to the Council for Medical Schemes’ 2020 annual report, the number of South Africans on medical aid has progressively reduced over the last decade, with only 15% of South Africans currently covered by medical aid.

Using a range of insights, NetcarePlus, part of the Netcare Group, has stepped in to introduce a range of innovative products, offering clients access to quality, affordable healthcare when they need it the most.

Speed To Market in the Insurance Industry

Speed To Market refers to the business priority of accelerating the opening of new growth channels – new products, markets, and ways to access those markets – and reducing the red tape to unleash this growth.

This article by Wayne Toms, CEO, GhostDraft, puts you directly into this space and you could link these principles to the articles on new products in healthcare for example. A broad overview of how to work within older companies but with agile units that can get to market quickly. 5 min read

Discovery defers contribution increases to April

Discovery Health Medical Scheme (DHMS) announced that its members will only pay more for their membership from 1 April 2023, instead of 1 January 2023. Yet, from 1 January 2023, they will have access to a range of exciting new and enhanced benefits.

How come Discovery can pass on a three month reprieve to its members? What would make this possible in the infrastructure of medical aid companies given the current economic climate? 2 min read

Medical underwriting may be a schlep – but it could save you money!

First answer these questions and then go to the article and see if you're on track! It's a quiz :)

• What is medical underwriting?
• Why is medical underwriting so important?
• What does medical underwriting involve?
• How can medical underwriting save you (members) time and money
• Other advantages of medical underwriting
• How can hiding information cost you?

Investments and patterns of behaviour

How to tip the investing odds in your favour

Focus only on the known information and ignore the unknown.

In most instances, the act of buying and selling results in two reasonably content parties. A person goes to the grocery store for some bread and milk, they purchase them, and both that person and the grocer go on with their days. In select instances, both parties come out of an exchange mutually pleased

This article gives reason for us to reflect on how we view our investments - perhaps we are seeing it more like gambling and if we are - we have a problem! 3min 30 sec read. 

By tackling gambling sponsorships, Mbappé has broken a comfortable silence

The football economy is infected with all kinds of glorified rackets – but confronting the social parasitism of betting would be a good start

The house always wins, the saying goes – but not if Kylian Mbappé is in the house. The French star has broken ranks with virtually the entire football world by taking a stand against the sports betting industry.

What an interesting article to read since we are on the subject of gambling. If we look closely it is very difficult not to align at some point with an entity that has links to gambling. What is your opinion and is this a factor in your choice of investment? 4 min read

Treasury slaps Bain with a ten-year ban from state contracts over ‘corrupt and fraudulent practices’

Bain & Co, the Boston-based global management consulting firm, has been hit with a ten-year ban from tendering for government contracts in South Africa because of its “corrupt and fraudulent practices” at the SA Revenue Service. 

Finally someone is paying attention, thanks to Lord Peter Hain, but what will the consequences be if the private sector also eject Bain from their databases of suppliers? 3 min read 

Does long-term investment planning have a place in an ever-changing world?

I’ve given this question some serious thought recently. My own children are young adults and their views on the world and how they envision their future is literally worlds apart from how I saw the future at their age. How does one plan for a future 50 to 60 years ahead when we have no idea what the world will look like then, and what the demands on us will be?

Now is the time to think about these things as you enter the world of work and you start earning a salary.  This article is also linked to the COVER mag which gives you a host of industry related articles to read. 3 min 

'The secret in investing is guessing who the judges will pick in a beauty contest'

In the latest series of interviews with industry veterans, Stephen Cranston talks to Liston Meintjes, co-founder of Foord & Meintjes and former CIO of Metropolitan Asset Managers.

This is great interview. It gives you a bit of the changing landscape of investing over the years and ends with what regulators should be focused on for the future to ensure that investors can invest in these relatively new assets with confidence. Can you think of two assets currently not regulated by financial institutions in the West? 3 min read

Financial institutions may hold far more than R88bn in unclaimed assets

An estimated R88.56 billion in unclaimed assets are held by institutions across the financial sector. However, the FSCA says the amount might be far higher because there is no common understanding of what an unclaimed asset is, and reliable data is lacking.

This article is a 3 min read. It is saturated with figures worth wading through to understand that in the challenge of finding the rightful owners to these unclaimed assets lies an opportunity to take our processes into the 4IR.  Imagine you were an entrepreneur how would you raise capital to solve this problem and ensure sustainability?   If that doesn't fit your risk appetite, how would you go about getting stakeholders to define an unclaimed asset?  

DFM head: ‘There’s no such thing as one optimal portfolio’

Anton Turpin, managing director of MiPlan, emphasises the importance of creating a sustainable competitive advantage, and that requires differentiation.

This article shows how actuaries have come to be in this space historically and have had to change focus as the era of defined benefit funds has become less pervasive in a turbulent economy. With discretionary fund managers DFMs the actuary works with the financial adviser in search of a solution bespoke for their client. The 3 min read. 

About YOU

About YOU and Exams

It is a highly pressurised time heading for exams and that’s no secret. The thing we grapple with is how to remain calm knowing the stakes are high coupled with complexity of knowledge, great volume of work and limited time. If only we had time you may argue, but I suggest that you remove the expectation of having to do well and simply do your best – time will materialise if you stop fixating on the mark and you will have a better chance to do well.

Being obsessed with obtaining good marks raises tension and reduces your capacity to think clearly. Be knowledge driven and plan your time to study the concepts you don’t know first. Practice as you are grappling with the concepts so that you can assess your understanding and pick up false assumptions early. Do not wait until you feel comfortable that you know everything before you evaluate your knowledge, which is a false comfort zone and you will end up with little time to practice.

We do not have control of the outcome, but we do have control of the process. It is here that you should place your energy, time and attention. Avoid the chatter in your head that starts “But what if?” Just get on with what is in front of you and you will free up more time to study.

Managing ourselves to manage the situation

I was speaking to a student the other day who called me in a panic. They were beside themselves with worry about a close friend who was meant to call them and hadn’t. The friend had not been happy of late and the loadshedding and mobile phone challenges were not helping the two of them stay in contact since they lived far from each other. The fact that the student who called me had a test the next day didn’t help their anxiety either. The wonderful thing, however, is that they called. I had the opportunity to walk them through the breathing pattern that is an antidote to panic and this then allowed them time to consider the practical issues of what could be done in the circumstances.

The first thing we did was to slow down the breathing, particularly the exhale as this reduces adrenaline in the blood stream and the metered slow breath sends a signal to the amygdala the seat of our emotions in the brain through which all stimuli must pass, to say that we are fine. The effect was remarkable. They began to calm down and were able to rationalise the situation. In reality there was a reasonable explanation for the loss of contact between the two friends which was fortunate and we were able to reach a place of calm logically before contact was made.

What we can learn from this scenario:

• Do not panic in isolation, call a friend or family member and purposefully slow down your exhale. Your breath is your friend.
• Be confident about the science that the breath is a powerful antidote to panic which you can use in exam situations too.
• Always get to know your neighbours or housemates and ask if you can give their number to your close friend or family member who may call them if they cannot reach you.
• Tell your close friend or family your movements or your general pattern of behaviour. Make this a feature of your relationship.
• Get enough sleep and make every meal count as a meal on its own - not at your desk. Fatigue and hunger can distort our emotions.

Adrenal fatigue has been on the rise since the pandemic and it was already high for actuarial students before then, so please be more aware of how you are responding to situations.