Welcome to Matters of Mind 21 April 2023

International and local economic news

Cost-of-living crisis – SA CPI accelerates to 7.1% in March, food inflation at 14-year high

South Africa’s cost-of-living crisis is worsening as winter looms, with consumer inflation still accelerating and food inflation hitting a 14-year high in March of 14.4%. Adding to the gloom, retail trade sales fell 0.5% year-on-year in February, the latest sign that South Africa’s economy has fallen into a recession.

However, there are glimmers of hope on the horizon with greater crop yields this year. 3.5 min read.

Capitec CEO warns consumers to live within their means as credit impairments climb by 80%

Capitec’s CEO, Gerrie Fourie, says the increase in credit impairments is due mainly to the deteriorating economy and the impact of higher inflation on clients.

Read more about Capitec, their wins and losses and their strategy moving forward. It tells us a lot about the SA economy and its impact on citizens. 3min read.

Insurance and related industry highlights

FSCA report details the deregistration of more than 6,700 inactive retirement funds

The reason for the inordinately high number of dormant or inactive retirement funds dates back to the late 1990s/early 2000s when there was a major switch in the South African retirement fund industry from defined benefit funds to defined contribution funds.

3min read.
FSCA Releases Report on Debarments and Other Regulatory Actions in 2022/23

This article provides a more comprehensive view and an access point to the FSCA report. 4min read.

Sanlam corporate adds top execs to its leadership team

Sanlam Corporate is delighted to announce its appointment of San-Marié Crause as Managing Executive for Group Risk, Lorraine Mekwa as Managing Executive for Client Experience, Wouter Dercksen as Managing Executive for Servicing and Distribution and Portia Mogale as Managing Executive for Human Capital.

CEO Kanyisa Mkhize says the appointments align with the Sanlam Group’s focus on innovation and growth to fuel its purpose of empowering generations to be financially confident, secure, and prosperous.

2.5min read.

Investments

Includes Banking, Cryptocurrency, ESG and opinions on investing

Big jump in profit for Capitec – which counts one-third of South Africans as customers

Capitec noted that the 2023 financial year, which encompassed most of 2022, saw South Africa recover from the Covid-19 pandemic, but then subsequently suffer fallout from the global turmoil created by Russia’s invasion of Ukraine.

3min read.

Why Artemis still likes UK banks after Credit Suisse and SVB

LONDON: The danger of a global banking crisis may seem to have diminished, but the demise of two American banks and Credit Suisse could still have shareholders in UK banks looking nervously at their positions. Has the threat really gone away?

This article answers the question by looking at the recent collapse of SVB and Signature Bank and takeover of Credit Suisse. 4min read.  

Social Impact the Forgotten Child inn ESG Considerations

… it’s time we give “society, social issues and social impact” the focus it deserves – across investment decision-making and capital allocation processes, in our corporate reporting and in our strategic planning on our corporate and State-Owned Enterprise (“SOE”) boards. 

Natalie Anderson tells us how Prescient Investment Management rate social impact on their investment scorecard. 4min read. 

Binance unpacks crypto exchange, traditional bank differences

If you are interested in cryptocurrency but need further clarification, this interview may help. 6min read.

Fintech, digitisation and AI

Includes Insurtech, blockchain

Momentum brings in-app screening to life insurance offering

More than 10 000 screenings have been completed using Momentum’s in-app digital screening tool, LifeReturns, since its debut late last October.

As a result, the life insurance provider is also planning additional features to the in-app screening tool that it expects to go live early next year, says Stephen van Niekerk, executive head of Momentum Myriad.

3.5min read.

Metropolitan sets aside R89m war chest in digital drive

Metropolitan has since publication of this story in August 2022, pointed out the R89 million was invested across all its digital transformation initiatives and not only in artificial intelligence. 

A good accompaniment to the article above. 3min read.

Cyber and cyber security

ChatGPT Poised to Expose Corporate Secrets, Cyber Firm Warns

The fear is that the chatbots could be exploited by hackers to access sensitive corporate information or perform actions against the company. There are also concerns that confidential information fed into the chatbots now could be used by AI companies in the future.

3min read.

Climate change

What Insurers Should Know About PFAS

A perfect storm of PFAS liability momentum is building in the midst of climate change, social inflation and digital accessibility, observes Lauren Angelina, a senior liability underwriter at Allianz Global Corporate Specialty.

Here, she compiles answers to the most common questions insurers have about PFAS, including whether it’s the next asbestos, why PFAS is so hard to underwrite, and what’s next in terms of exposure and litigation.

15min read.

Companies That Form Global Climate Alliances Need Antitrust Guidance: Experts

Global companies that form alliances to help them to tackle climate change need clear “safe harbour” guidelines from governments to allay fears they could be tripped up by antitrust rules, legal experts said.

Follow up with related reading on the Net-Zero Insurance Alliance formed in 2020. The law of “anti-trust” in South Africa is enshrined in the Competition Act of 1998. 3.5min read.

What the Hail? Understanding this Peril is the Key to Improving Loss Ratios in Insurance

As hail risk evolves, insurers need industry innovation to minimize the surprises caused by volatility, reduce their costs, and drive resilience as soon as possible.

The article provides key areas and points to consider in insuring for hail. 4min read.

Health care and related topics

Palliative care conference calls for closer collaboration with medical fraternity

The conference co-organisers state, “Palliative care is holistic care that uses a multi-faceted approach to improve the quality of life of patients and their families and should begin at the time of the diagnosis. The knowledge of what the palliative care sector can provide is critical information for anyone working within the medical profession, as the support that is available is beneficial to not only the patient and their loved ones, but also to the medical practitioner.”

Worthwhile 5min read.

Global report urges more investment in Aids war

The report, titled A triple dividend: The health, social, and economic gains from financing the HIV response in Africa, compiled by UNAIDS, reveals that fully financing the HIV response will not only save lives but also produce substantial health, social and economic gains.

Free access to the report available on the site. Note the impact of the pandemic on slowing down the battle. 3min read.

RAF heads to ConCourt in battle against medical aid payments

The Road Accident Fund (RAF) is now turning to the Constitutional Court after its application to appeal a ruling in favour of Discovery Health was dismissed by the Supreme Court of Appeal.

3min read.

Discovery Life to appeal R25m payment for ‘disability’

Discovery Life has filed a notice for leave to appeal a High Court judgment that ordered it to pay more than R25m to a former stockbroker charged and acquitted of murdering his girlfriend, saying the judgment could potentially have far-reaching implications for the life insurance industry, reports Moneyweb.

3min read.

About YOU

Burnt Out? Here’s How to Cope

Employee burnout is a problem that has been around for a long time. However, due to the pandemic and the increased use of technology, employees are reporting alarmingly high burnout rates over the past few years.  Fortunately, we can use emotional intelligence strategies to understand the contributing factors of burnout and hopefully prevent it from happening.

Although studying at university has specific challenges relating to burnout, the symptoms and EQ skills described for the workplace can easily be transferred to a university setting. 4 min read.

10 Bad Habits You Must Eliminate from Your Daily Routine

You are the sum of your habits. When you allow bad habits to take over, they dramatically impede your path to success. The challenge is bad habits are insidious, creeping up on you slowly until you don’t even notice the damage they’re causing.

Dr Travis Bradberry offers us insight into why we should ditch these ten habits – it’s well worth trying! 5min read.