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Cape Town – Sanlam Group CEO Ian Kirk said the insurer is aligned with Finance Minister Pravin Gordhan’s inclusive growth strategy and said its association will be engaging with Parliament next week on the topic.
Kirk’s view in an interview with Fin24 on Friday comes as politicians including President Jacob Zuma raise the ante on the vision of radical economic transformation, especially in the financial services sector.
“We understand the pressure (around economic transformation) and we understand it well,” he said.
However, Kirk said there is one thing that is missed when debating goals and targets for transformation.
“The reason why South Africa needs to transform in a broader sense is because it is relevant to the market that we service,” he said.
Referring to himself, he said: “If you just have 58-year-old Irish people running around, you’re not going to be able to service the market anywhere near as effectively as you will do with a diverse employment force.”
“You need diversity of race, of gender, of thought – a broader diversity. That’s what we are after – it’s a good business rationale. It’s not just around compliance to the financial sector code.”
Transformation forms part of the group’s diversification efforts across the territories in which it operates and facilitates Sanlam’s contribution to black economic empowerment and other socio-economic development initiatives in South Africa, it said in its 2016 financial results released on Thursday.
Asisa to update Parliament on transformation efforts
Many of Sanlam’s economic transformation initiatives are run through an association it helped establish – the Association of Saving and Investment of SA (Asisa).
Other members of Asisa include Absa, Allan Gray, Investec, Old Mutual, MMI (Momentum and Metropolitan), Nedbank, Coronation and Liberty.
Asisa will be attending the Standing Committee on Finance in Parliament next week to explain the progress its members have made regarding transformation, Kirk told Fin24 on Friday. “That’s all part of a healthy process,” he said. “We see it positively.”
Sanlam ensures the saving and investment industry line up with the inclusive growth strategy through Asisa. "We at Sanlam support the Asisa initiatives”, such as the Enterprise and Supplier Development programme.
Sanlam aims to service those left out of economy
Sanlam said in its 2016 annual report that ongoing transformation is driven at both a group and individual business unit level. “Transformation includes the group's diversification efforts, but also aims to align the group's demographic profile to the territories in which it operates, and contributes towards black economic empowerment in South Africa.”
Building on this, Kirk told Fin24: “We ensure that in terms of the inclusive growth agenda that our products are available to all segments of the market in an appropriate manner at an appropriate cost to segments that have been left out of the progress in South Africa.
“We are not just servicing the affluent or middle income market.”
Sanlam tracks demographic developments and shifts to transform its employee profile and distribution presence.
This includes the increasing importance of Gauteng as a key metropolitan area due to urbanisation. It has made good progress in penetrating new areas and market segments through employee and distribution transformation, it said in its results.
Kirk: The Sanlam of today is not the Sanlam of 20 years ago
On 1 March 2017, Sanlam again achieved a Level 2 Broad-based Black Economic Empowerment rating as determined by the Financial Sector Charter, it said in its 2016 report.
The restructuring initiatives in different clusters provided an opportunity to improve employment equity profiles to meet the group targets for black recruitment, it explained in its results.
“Good progress was made in senior and middle management appointments. Succession plans also show encouraging signs of increasing the number of black people in key roles.”
Kirk told Fin24: “There is some way to go at the senior management level, which has a lot to do with the availability in talent and the difficulty we’ve had in building that talent internally. We’ve made great progress. The Sanlam of today is not the Sanlam of 20 years ago.”
