Welcome to Matters of Mind (MM) 10 March 2023

International and local economic and geopolitical news 

How can our universities help to mitigate disaster risk?

The destruction caused by the earthquake and its aftershocks that hit Türkiye and Syria in February has turned the spotlight on universities’ role in developing earthquake-safer construction practices, building disaster risk knowledge and research, promoting disaster education among academics, and developing disaster-resilient communities.

5 min read.

US, allies in war of words with Russia at G20 meet

NEW DELHI, March 2 (Reuters) - The U.S. and its European allies sparred with Russia on Thursday over the war in Ukraine and urged the Group of 20 (G20) nations to keep up pressure on Moscow to end a conflict that they said had destabilised the world.

3 min read showing the elephants in action!

Economic growth is fuelling climate change – a new book proposes ‘degrowth communism’ as the solution

This article is also to be found under the category of “climate change”.

Insurance and related industry highlights

Allianz Risk Barometer 2023

The Allianz Risk Barometer is an annual business risk ranking compiled by Allianz Group’s corporate insurer Allianz Global Corporate & Specialty (AGCS), together with other Allianz entities, which incorporates the view of 2,712 risk management experts in 94 countries and territories including CEOs, risk managers, brokers, and insurance experts. Respondents were questioned during October and November 2022. The survey focused on large- and small- to mid-size companies. Respondents were asked to select the industry about which they were particularly knowledgeable and to name up to three risks they believed to be most important. It is being published for the 12th time.

These are findings that you should know about to understand the challenges and opportunities facing the industry. Links to the report are available but this article is an 8 min read.

War, Inflation, Polarization Driving Global Increase in Political Risk

Inflation, social inequality, environmental concerns, political polarization and the Russia-Ukraine war are among factors that are leading to an increased risk of civil unrest around the world, according to two reports released by industry analysts in the past month.

A high level account of the Allianz report in the article above, a survey by the Edelman Trust Institute and a report by Verisk Maplecroft on these issues. 2.5 min read.

Flooding sinks insurer profits

This newsletter will delve deeper into a 12-month period that saw an 8% increase in conventional insurance gross written premium (GWP); an underwriting margin decline from 8% in 2021 to just 5.1% this period; and a significant decline in both headline earnings per share and return on capital. To its credit, Santam’s 2022 AFS was not all doom and gloom.

5 min read of Santam’s worst year of claims since inception 104 years ago. Damage and loss of life from the recent (Feb and March) floods along the Orange and Vaal rivers in SA have not yet been quantified.

Investments

Includes Banking, Cryptocurrency, ESG and opinions on investing

Why South Africa’s greylisting didn’t move the rand.

At Prescient, we cautiously monitor economic themes, inflation dynamics, labour market trends and market behaviour based on our deep and point-in-time analysis of massive data sets. These direct us to what we believe to be the most scientifically correct conclusions. We’re hesitant to simply accept the “it’s all in the price already” argument without seeing the evidence that is the case. So, we’d rather dig deeper. If we find it hasn’t been incorporated into the price of assets, we question whether we should have expected a bigger move. The answer to this question in this situation might surprise you since we think it’s a: “No, it wouldn’t have mattered that much either way.”

A 6 min read which helps to balance starkly negative views on our current deep recession.

FSCA to allow Regulation 28 Unit Trusts to invest in hedge funds

A regulation 28-compliant collective investment scheme (CIS) will be able to invest in retail hedge funds if draft amendments to the CIS regulations are adopted. This is one of three changes the FSCA is proposing to make to Board Notice 90 of 2014.

6 min read, providing good context and detail on the impact of the proposed changes. You will learn what a “collective investment scheme” is.  Look out for ETFs and RHFs.  

Regulation 28

Regulation 28 is issued under the Pension Fund Act. It limits the extent to which retirement funds may invest in particular assets or in particular asset classes. The main purpose is to protect the members’ retirement provision from the effects of poorly diversified investment portfolios. This is done by limiting the maximum exposure to more risky asset classes, making sure that no unnecessary risks are taken with retirement money.

Board Notice 90 proposal: Hedge funds on the cards for unit trusts

Following the FSCA’s release of a draft amendment to Board Notice 90, how will balanced funds react to being allowed to invest in alternatives?

Delve a little deeper, especially if you are wanting to understand more about investments. 3 min read.

Old Mutual: A strict ESG code is inappropriate for SA

Old Mutual Investment Group (Omig) believes fund buyers should maintain a pragmatic approach to ESG in South Africa.

An easily accessible article providing a projected timeline for decreasing investment in fossil fuels and associated increase in demands of alternative resources like nickel and lithium. 3 min read.

Investors flooding out of South Africa

International investors have had enough of South Africa and are taking large sums of their money out of the embattled country.

The City Press reports that over R100 billion in South African shares and bonds have been sold by international investors since the start of 2023.

3 min read. Try to find positive articles – what about the one below?

List Eskom on the JSE – Chris Yelland

Chris Yelland, energy analyst and MD of EE Business Intelligence, said listing Eskom’s generation division on the Johannesburg Stock Exchange (JSE) after its unbundling would be beneficial.

He said listing Eskom’s generation unit on the JSE would subject it to more oversight and transparency due to introducing new shareholders.

3 min read – what are your thoughts? Do you think this will make a difference as it did for Telkom?

Fintech, digitisation and AI

Includes Insurtech, blockchain

The road to a digitally enabled insurance industry  

Every participant in the insurance industry is evaluating digitisation as an essential part of their long term strategy.  

In this interview Tony from COVER magazine speaks to Wayne Toms, CEO of Ghostdraft South Africa, exploring the industry’s quest for sustainable digital transformation. 5 min read.

Three AI experts on how access to ChatGPT-style tech is about to change our world – podcast

The technology itself is fascinating, but part of what makes ChatGPT uniquely interesting is the fact that essentially overnight, most of the world gained access to a powerful generative artificial intelligence that they could use for their own purposes. In this episode of The Conversation Weekly, we speak with researchers who study computer science, technology and economics to explore how the rapid adoption of technologies has, for the most part, failed to change social and economic systems in the past – but why AI might be different, despite its weaknesses.

Fascinating interdisciplinary discussion available on most platforms and also on the site above. 41 min listening time.

Diversity, equity and inclusion

Includes women in work, finance and STEM

Transformative perspectives: Women leaders in insurance

In this series of interviews, female insurance executives and McKinsey partners offer a rich tapestry of viewpoints on where the industry stands today and where it needs to evolve to close protection gaps, expand the industry’s market relevance, and continually seek better ways to serve customers and society.

Please click on the names below to gain access to individual interviews with:

1. Caroline Feeney, executive vice president and CEO of US businesses at Prudential, Caroline Feeney has found success by staying true to herself.
2. Ingrid Johnson, president of Sun Life Asia, helping clients achieve financial security starts with building businesses under a common purpose.
3. Alice Liang, chief proposition officer of AIA Hong Kong & Macau offers insights on how products, ecosystems, and planning tools can drive innovation and transform the customer journey.Women in insurance: Leading voices on trends affecting insurers

McKinsey partners offer insights into the latest in insurance—new technologies, services, and customers. Their expertise covers all relevant topics, functions, and lines of business. A feast of experience and knowledge. Each interview is a 6 min read.

Sazini Mojapelo

The digital divide needs to be tackled in order to combat gender-based violence

Bridging the gender digital divide requires more than ensuring women and girls have access to cellphones and the internet. Access to digital technology has become a basic human right that has consequences for widening economic and social inequalities. The theme for the 2023 International Women’s Day on 8 March explores this divide while spotlighting the importance of protecting the rights of women and girls in digital spaces and addressing digital gender-based violence.

Sazini Mojapelo, author of the above article, is Interim CEO of the GBVF Response Fund1, and has more than 20 years’ experience as a social impact executive. She sits on several boards in the nonprofit sector. 3 min read.

Omig close to becoming majority black-owned, claims managing director

Big strides made in the investment group, but asset management still has quite a way to go. Old Mutual Investment Group (Omig) is in advanced discussions to become more than 50% black-owned as part of its transformation initiative, said managing director Tebogo Naledi.

Tebogo Naledi, OMig. MD.                          Busisa Jiya, CEO Asisa           Ann Leepile, Alexforbes Invest. CEO

Climate change

Includes nature and renewable energy

Nature in the balance: What companies can do to restore natural capital

Join us for a webinar series from March 20 – 29 featuring our new Nature in the balance report to understand the critical role that companies can play to counter the depletion of natural capital.

Takealot sees surge in renewable energy system sales

SA’s biggest online shopping site says since December 2020, it has had 3 000% gross merchandise value growth in the sales of generators, inverters and UPS devices.

3 min read.

Economic growth is fuelling climate change – a new book proposes ‘degrowth communism’ as the solution

I’m often told that degrowth, the planned downscaling of production and consumption to reduce the pressure on Earth’s ecosystems, is a tough sell. But a 36-year-old associate professor at Tokyo University has made a name for himself arguing that “degrowth communism” could halt the escalating climate emergency.

Academics define degrowth as a democratically planned effort to downscale levels of production and consumption in order to lighten environmental pressures. The democratic part is important: the idea is to do this in a way that reduces inequality and improves wellbeing for everyone.

A must read of 4,5 min.

Anthropocene

The current geological age, viewed as the period during which human activity has been the dominant influence on climate and the environment. (Noun, Oxford Languages)

"Some geologists argue that the Anthropocene began with the Industrial Revolution."

Study: Back-to-Back Hurricanes Likely to Come More Often

hat used to be a rare one-two punch of consecutive hurricanes hitting about the same place in the United States weeks apart seems to be happening more often, and a new study says climate change will make back-to-back storms more frequent and nastier in the future.

Read this article to find out if indeed there has been a trend and if not, how scientists can predict if it could start becoming one. 3 min read.

Health care and related topics

Discovery Vitality reveals “ObeCity Index” showing the South African city with the healthiest weight ahead of World Obesity Day; launches Vitality HealthyWeight programme

A fun article which needs to be taken seriously. 3 min read.

Activists flag serious health risks as sugar tax increase is delayed again

This article brings into focus the several areas that a tax increase would affect, both negatively and positively. How would an actuary argue the case and offer some relief to all parties invovled?  This is a great ERM or ARM question. 6 min read.

SA’s worst measles outbreak in 10 years – 600 cases and counting

Measles cases in South Africa had climbed to more than 600 by last week, fuelled by the disruption to routine childhood vaccination programmes caused by the pandemic, said the National Institute for Communicable Diseases (NICD).

Government is carrying out a nationwide vaccination campaign to tackle what’s being described as the worst outbreak in more than a decade.

Don’t leave it there, there may be other reasons if we look closely at those contracting the disease. 4 min read.

Africa’s medical specialist shortage at critical point – experts 

Retaining and securing medical specialists for Africa is a necessity, not a luxury, for quality integrated public healthcare, say experts, who warn that the coming shortage will put the continent’s healthcare progress further on the back foot.

It will also deepen global inequities and ultimately throttle the training pipeline of professionals, believes Eric Buch, chief executive of the Colleges of Medicine of South Africa (CMSA) and a professor in health policy and management at the University of Pretoria.

6 min read.

A woman dies every two minutes in pregnancy or childbirth: UN report

Maternal mortality rates climbed or stagnated in nearly all regions across the world in 2020, according to a report released by United Nations agencies, marking a major setback in global efforts to combat complications during childbirth or pregnancy.

Sobering 3 min read.

Wuhan virus escape probably accidental – US agencies

The debate continues without clear cut evidence either way, could you make a definitive judgement? Read the article and establish for yourself. 3 min read.

Psychiatrists group urges government to spend more on mental healthcare

The South African Society of Psychiatrists (Sasop) has appealed to the government to up its mental healthcare spend, raising concern that mental healthcare was again underfunded in the 2023 Budget, delivered last week by Finance Minister Enoch Godongwana.

Excellent article. 6 min read.

About YOU

The Physiology of Self-Compassion by Dr Kirstin Neff

For the past decade or so I’ve been conducting research on self-compassion and have found that people who are compassionate to themselves are much less likely to be depressed, anxious, and stressed, and are much more likely to be happy, resilient, and optimistic about their future. In short, they have better mental health.

The power of self-compassion is not just an idea – it’s very real and actually manifests in our bodies. When we soothe our own pain we are tapping into the mammalian care-giving system.

An illuminating and uplifting article on Dr Kristin Neff’s site. Scroll to the right for the second page. 5 min read per page. It has practical tips which you can use right now to improve your mental health and wellbeing. I strongly recommend it.

Try this self-compassion break, it is a six minute mindfulness practice session.

Are you a shark or a teddy? How understanding conflict styles can help you overcome fights with friends and family 

In the course of a lifetime, it is difficult to avoid hurting, upsetting, or being in conflict with people we love. It is an inevitable part of most lives and learning how to negotiate it is a more useful and realistic goal than avoiding it. The first step is understanding what makes relationship conflict so difficult and the different approaches people have to it.

Read this article and extend your self-compassion to the realm of conflict. 4.5 min read.