Welcome to Matters of Mind (MM)

May 2024, First Edition

“I think one thing that is a really important thing to strive for is being internally driven, being driven to compete with yourself, not with other people. If you compete with other people, you end up in this mimetic trap, and you sort of play this tournament, and if you win, you lose. But if you’re competing with yourself, and all you’re trying to do is — for the own self-satisfaction and for also the impact you have on the world and the duty you feel to do that — be the best possible version you can, there is no limit to how far that can drive someone to perform.”

— Sam Altman, CEO of OpenAI since 2019, American investor and entrepreneur

Economic matters

McKinsey: Global Economics Intelligence executive summary, March 2024

Fair analysis which offers insight from the recent past; however, it is not a forecast of economic or geopolitical events.

8min read

Financial Services Industry       

That Insurance Talent Crisis? It’s a Global Knowledge Opportunity

The article uses the USA labour market as its proxy but identifies global knowledge process management (KPM) as a potential stop gap. Many South Africans are already filling the gap working remotely or living abroad for a few years. Do you think this practice is sustainable in the long term for the industry? 2.5min read

Diversity and Inclusion

DEI: Redefining the Paradigm for the Property/Casualty Industry

The recent billionaire back-and-forth about diversity, equity and inclusion initiatives is a great opportunity to look at why we’re doing DEI, how we’re doing it — and how we can do it better.

This is an American perspective, so there will be some differences compared to the South African context, but it provides some insight into the benefits of diversity.  3.5min read

Life Insurance

Swiss Re launches Swiss Re Life Guide Scout, a Generative AI-powered underwriting assistant

Swiss Re Life Guide Scout aims to help increase the efficiency and quality of underwriting by generating swift answers compiled from curated expert knowledge in response to questions asked by the underwriter in natural language.

2.5min read

General Insurance

Climate crisis 'pressure pot' prompts insurers to rethink risk strategies

Globally, weather-related events are threatening to cause an insurance crisis; in South Africa, insurers are bracing for impact.

While the country used to be a Catastrophic Event (CAT)-free zone, the scale and magnitude at which disasters have taken place recently means we are now experiencing a dramatic shift in the CAT landscape.

5min read

Podcast: RAF loses around R3 billion annually in opportunistic loss of income claims - ASSA

The beleaguered Road Accident Fund (RAF) could save around R3 billion a year by rejecting opportunistic loss of income claims from individuals who suffered only minor injuries in a motor vehicle accident. Research by actuary and damages expert Gregory Whittaker for the Actuarial Society of South Africa (ASSA) shows that by local and international standards, loss of income compensation from the RAF for non-serious injuries is excessive.

15min interview

Fourways Mall owners cross major hurdle in R1bn Covid business interruption claim

Five insurance companies indemnified the owners of the mall against business interruption, with the pivotal term ‘variously in or out’ of 10 iterations of the contract.

A very interesting read given the experience of BI claims as a result of Covid; the attention to detail in contracts and what is common practice is enlightening. 4min read

Berkshire Wary of “Fashionable’ Cyber Insurance, AI

While Berkshire Hathaway made money on its personal auto insurance business GEICO, and even on a big bet it placed on property-catastrophe reinsurance in Florida last year, one place where the leaders are less inclined to deploy capital is in the cyber insurance line.

This article is well worth a read as it paints a picture of upside and downside risk as far as cyber insurance is concerned, and how one may need to take a view on the risk, even if that is contrarian to the market. It also brings AI into perspective comparing it to the handling of nuclear weapons. 3min read

Health Insurance

Schemes get costlier as reform takes back seat to NHI

In a long wait for National Health Insurance (NHI), medical scheme healthcare reform is in limbo, resulting in members paying 25 to 30 percent more for membership than they could be.

An article which gives you a bit of the history of medical schemes in SA, the start of the NHI and the challenges facing the sector. 5min read

Welcome to South Africa’s NHI era - Moneyweb

This is an interview with Dr Nicholas Crisp (person responsible for the NHI Bill) and Prof van den Heever. It is a very interesting listen as the interviewees present opposing viewpoints.

A heated 27min audio.

NHI will take years to implement, says Treasury

The government’s plans for National Health Insurance (NHI) are likely to take many years to implement as there is limited scope to fund it with higher taxes, a senior Treasury official told the annual Board of Healthcare Funders (BHF) conference on Wednesday.

The above article requires a subscription (or access via your university library). However, you can access more info from National Health Insurance: All you need to know | SAnews  which may answer a lot of your questions regarding the implementation from the government’s perspective.

Calls for single network to boost healthcare connectivity

Connectivity will be a crucial part of creating South Africa’s proposed National Health Insurance (NHI), says Dr Denisha Jairam-Owthar, group CIO for the Council of Medical Schemes.

How do you think a single network could be integrated into the creation of the NHI? 2.5min read

Our nurses, our future: Addressing the critical issue of sustainability in SA’s healthcare sector

With only 22,090 nurses to serve the country’s public health sector of more than 50 million citizens, urgent intervention is required to bolster their numbers and protect the wellbeing of our nation.

In what ways do you think Health Insurance could play a part in boosting these numbers? 3min read

Banking

Standard Bank sees clientele increasingly go digital

Standard Bank’s digitally active clients in South Africa now stand at the 4.1 million mark out of an active base of 11.4 million. This comes as the big-four bank witnesses a continued surge in digital transactions.

2.5min read

R53 billion blow to South Africa’s big banks in 2024

This is according to the Major Banks Analysis report by PwC for the period ended on 31 December 2023, which was compiled after South Africa’s four largest banks published their full year reported financial results last month.

2min read. You can access the report: Major Banks Analysis here.

Investments

How much you would have if you invested R1,000 in Capitec, FirstRand, Nedbank, and more in January

Capitec, South Africa’s biggest bank by customer numbers, is the best-performing JSE-listed banking share so far in 2024, followed by Nedbank, Absa, and FirstRand.

The two biggest JSE-listed banks—FirstRand and Standard Bank—saw their share prices drop by double-digit percentages between 1 January and 24 April 2024.

2.5min read

Why do you want to invest offshore?

Navigating the murky waters of financial markets, especially with the looming uncertainty that the upcoming elections create, leaves many of us with two pivotal questions: Will our local equities continue playing second fiddle to offshore markets, and what’s the deal with the rand? Will it continue to weaken? These questions drive many individuals to invest offshore, but should they be the main reasons to do so?

4min read

Podcast: Delistings from the JSE has elevated investor concerns about the outlook for local shares

In this episode we reflect on the transformation of the JSE over the past three decades, highlighting significant changes in its composition and market dynamics.

Locally relevant and worth listening to. 20min interview

Invest in the future of farming

Agriculture in South Africa is growing. The primary agricultural sector has increased by an average of 7.5% per year since 2008, outpacing the total economy, which grew by 6.6% on average per year over the same period.

Read more about this refreshing approach. 3min read

Retirement / Pensions

Two Component Checklist for Retirement Funds

The following are a few key aspects that need to be considered in ensuring a smooth transition that will serve the best interests of fund members.  

6min read

Two Pots: resist the urge to access your RA savings unnecessarily

While the catalyst for allowing early access to one’s retirement savings was the economic hardship caused by the Covid lockdowns, utilising this option will be costly. It should ideally be reserved for periods of genuine financial hardship.

This article urges investors to be fully aware of what the implications of early access will mean for their eventual retirement. Very clear and accessible 5min read.

About YOU

It is now commonly believed that environment plays a huge part not only in surviving but in achieving success.

"Species that are more responsive to change can gain a relative advantage over the ones they compete with and increase the odds of survival. In the short run, these small gains don’t make much of a difference, but as generations pass the advantages compound." The Red Queen

This quote resonates with our struggle to keep on top of our game, leading us into the article below on epigenetics. Is there an intellectual similarity between the concept of advantages compounding over time by being responsive to change and taking care of one’s health and mental wellbeing?

What you eat could alter your unborn children and grandchildren’s genes and health outcomes

Would this knowledge encourage you to take better care of yourself?

5min read

Finding our voice by Dr Kristin Neff

There are so many areas of our lives where it is essential to find our voice and speak up, whether it's at work, in our relationships, with our families, or in the political realm. And our message will be conveyed so much more effectively when it's authentic and coming from a place of compassion. I'm including a practice called the Protective Self-Compassion Break that will help you tap into brave, empowered clarity when you're in a situation where you want to find your voice and speak up. I hope you find it useful in your life.

If you would like to find out more about self-compassion, the interview below would be a very good starting point. It is just over on hour, but you can do it in sections.

Dr Kristin Neff | The Science of Self-Compassion | Talks at Google

Dr Kristin Neff discusses the impact of self-compassion on mental health and wellbeing. She will share the science behind self-compassion and provide tangible strategies for practicing self-compassion, which can be especially helpful during times of change.