‘Don’t defy gravity...Make decisions around it.’

They say that when the going gets tough, the tough get going. And at financial services group MMI Holdings, it is the role of finance director Mary Vilakazi to ensure resilience and sustainable growth during difficult economic times. 

Earlier this year Vilakazi, who oversees a team of 400 employees at MMI, was chosen to be a member of the Forum of Young Global Leaders (YGL), a World Economic Forum (WEF) leadership initiative. She was one of 11 leaders from sub-Saharan Africa, and one of two South Africans selected from 50 countries around the world.

“It’s an opportunity to connect with a lot of young people, below the age of 40,” she says. 

Born and raised in the township of Alexandra in Johannesburg, Vilakazi thought she would become a lawyer. This changed in high school when she realised that she preferred to work with numbers, she tells finweek. After receiving a bursary from PwC to study at Wits University, she qualified as a chartered accountant. 

Working as a partner at PwC, where Metropolitan was her biggest auditing client, exposed her to different opportunities. She left PwC in 2008 and took up consulting. She joined MMI Holdings, which was formed from the merger of Metropolitan and Momentum in 2010, as chief financial officer in 2015. 

Adapting in tough times

Volatility in equity markets over the last two years has hampered MMI’s growth, says Vilakazi, and sluggish growth on the continent has forced the group to reconsider some of its expansion plans.

With Vilakazi as finance director, the group has taken on a cost reduction project – MMI aims to save R750m annually by the 2019 financial year – and a client-centric strategy to keep the business resilient and sustainable. MMI continues to invest in growth. One of its growth initiatives is in the short-term insurance business which has improved and is a viable business, she says.

In May, MMI bought out its local partner, United Metropolitan Nigeria Life Insurance. Vilakazi explains that it is important for MMI to maintain a presence in the Nigerian market, even if good returns are still to materialise in the short term.

“We still see growth opportunities in Nigeria, as difficult as it is. In the long term, we cannot have a viable African business without a presence in Nigeria,” she says. Current insurance penetration in Nigeria, which has a population of 174m, is less than 1%. 

However, MMI’s West African expansion strategy may be quite delayed by the commodity cycle, she adds. MMI has also put plans to expand its subsidiary significantly in the UK on hold, due to market conditions. 

Some of the “more ambitious” plans concerning emerging markets have also been put on ice, and the group may look at these options again once things improve, Vilakazi says. 

The group currently has operations in 13 countries, including Hong Kong, Indonesia, United Kingdom and India  and a number of countries on the African continent. With the implementation of a client-centric strategy, MMI identified potential areas for expansion. Expanding into East Africa and gaining traction in Kenya and Tanzania will be a good supplement to the business, says Vilakazi.

“We are on the lookout for opportunities that will give us scale.”  

A client-centric focus

MMI’s client segments include Metropolitan Retail, Momentum Retail, the corporate and public sectors, as well as its presence in Africa and Southeast Asia and the UK. These individual segments help the business to focus on finding solutions and building relationships with clients and helping clients increase their financial wellness, explains Vilakazi. 

Since being implemented two years ago, the client-centric strategy has seen the business grow in volumes, she says. 

According to its latest trading update, for the nine months to end March, new business flows (on the present value of premiums basis) grew by 13%, compared with the same period to end March 2015. 

Vilakazi says the group has worked on improving its client service, for example by limiting the time clients have to spend on the phone when contacting call centres. 

“People are really applying their minds around the ease of doing business and the ease of engaging with clients,” she explains.

The strategy has been paying off. 

The South African Customer Satisfaction Index for 2015, by Consulta, ranked Metropolitan Retail first in the industry with a score of 81.1, and Momentum Retail second with a score of 79.3, for customer satisfaction. Momentum also received the 2016 Financial Intermediaries Association (FIA) award for product supplier of the year. 

Working hard to reduce costs

Vilakazi says through eliminating duplicated systems across MMI’s different client segments, they will be able to cut costs. For example, with Metropolitan Retail having its own legacy insurance books and systems and Momentum Retail having its own systems as well as Africa business, MMI will move to one system for legacy books, and one system for new-generation products and investments.

“We put all these capabilities in one centre.”

She says the programme’s target is not to reduce heads, but with the number of systems being reduced, that will inevitably happen. MMI aims to remain transparent with all stakeholders, including staff members. During the merger in 2010 that brought about MMI, management has learned valuable lessons about handling redeployment, she says.

“Once we learn which people are going to be redundant, we try to place them throughout the company. People are also given opportunities to reskill where that is necessary.”