Liberty now hoping for a different kind of extraordinary


We’re greater than a yr and a half into the Covid-19 pandemic and most of the people have misplaced a pal, colleague or cherished one, however it appears to be like like we’re previous the height of the third wave in SA. Hopefully, as the top of the yr attracts close to, the world will return to a extra acquainted lifestyle.

These had been the emotions expressed by Liberty Holdings CEO David Munro when he mentioned the group’s results for the six months to finish June 2021.

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“It has been a interval of maximum challenges,” stated Munro, commenting that the protest motion in KwaZulu-Natal and Gauteng added to the nation’s woes.

“These protests had been characterised by deplorable violence, theft and destruction of property, and are additionally sadly a mirrored image of the desperation of many South Africans throughout these troublesome occasions. Regrettably, these actions have been disruptive to the broader South African society and to the nation’s struggling economic system,” he famous in his commentary to the outcomes.

Nonetheless, Munro expressed the hope that world vaccination programmes and a restoration within the world economic system, in addition to the roll-out of vaccinations in SA will rapidly restore life to what persons are used to.

“The mass Covid-19 vaccine roll-out has commenced in SA and is intensifying, however uncertainty associated to the evolution and influence of the pandemic and related waves stays. Liberty is proud to have opened a vaccination web site to the general public at our head workplace in Braamfontein to help the SA authorities with its vaccination programme.

“Working with Dis-Chem, the centre has vaccinated 6 000 individuals since its opening and greater than 600 vaccinations are administered daily,” stated Munro.

He then stated of the final yr or so: “We now have really skilled a rare time in historical past.”

He paid homage to Liberty staff and brokers for overcoming challenges and nonetheless attaining key objectives, with Liberty producing good outcomes.

The numbers

Normalised headline earnings recovered from a lack of R2.1 billion within the first half of the earlier monetary yr to a revenue of R288 million, whereas earnings per share elevated to R1.07 in comparison with a lack of R8.03 within the comparative six months.

The development was posted regardless of the sharp improve in claims.

Munro highlighted that demise and incapacity claims elevated by 61% towards the primary six months of the 2020 monetary yr, to R8.5 billion.

He stated whole annuity funds to purchasers through the interval had been R4.5 billion, a ten.3% improve on the comparative interval, representing “a important injection of revenue into society to maintain many weak individuals within the latter years of their lives”.

As well as, Liberty elevated its pandemic reserve by one other R1 billion. Supplementary info to the interim figures exhibits that Liberty has used greater than R2.5 billion of its authentic pandemic reserve of R3 billion up to now. The additional R1 billion elevated the steadiness to R1.5 billion.

Notes to the outcomes clarify that the reserve was calculated on a foundation to cowl the anticipated improve in mortality and retrenchment claims (along with increased bills attributable to the pandemic).

Bankassurance

Whereas administration appears proud of the efficiency and expressed their hopes of a “return to normality”, it’s noteworthy that Liberty is altering its methods and repositioning for the long run.

Liberty and Customary Financial institution are boldly shifting again into bankassurance. Liberty shareholders can be requested inside weeks to ratify the acquisition of Liberty by Customary Financial institution, a reverse of the pattern a number of many years in the past when banks and life insurers in SA lowered interlinking shareholdings.

Learn: Standard Bank + Liberty: Is bancassurance back?

The proposed transaction was introduced solely just lately, on July 15. Customary Financial institution is proposing to purchase 100% of Liberty Holdings and combine it extra carefully into the banking group.

This may, topic to shareholder and regulatory approval, result in the delisting of Liberty Holdings and Liberty changing into a completely owned subsidiary of Customary Financial institution. Customary Financial institution Group at the moment owns 54% of Liberty. “It should create the biggest monetary companies group in Africa,” stated Munro.

“It’s a pure extension of our rising relationship with Customary Financial institution and provides strategic advantages to supply full monetary options to purchasers’ monetary wants. Additionally it is a powerful vote of confidence in Liberty’s enterprise,” stated Munro.

Positioning for the long run

Liberty additionally outlined its technique to adapt to a altering world. Just a few fascinating elements stand out, aside from the apparent drive to extend gross sales of life, funding and funeral insurance policies.

Essentially the most putting is Liberty’s transfer to a technology-driven enterprise mannequin.

Apparently, Munro phrases the growing reliance on know-how as a “human-augmented platform”. A complete of near R100 million was invested in rising its digital functionality through the six months beneath evaluation.

Group monetary director Yuresh Maharaj equipped extra info on the technique, and different developments.

Liberty partnered with the worldwide Salesforce to launch its Adviser Workbench to be used by Liberty advisors, which goals to simplify and digitalise processes. The intention is to cut back duplication of effort and expedite the gross sales course of. Over 1 500 advisors have already signed up because the launch in Could, says Maharaj.

Liberty additionally launched a brand new monetary wants evaluation instrument to advisors which digitalises danger and funding evaluation. Greater than 8 000 shopper evaluation studies have been issued because the launch in Could.

Simplification

The second putting change within the operating of Liberty is the simplification of merchandise and the underlying funding portfolios.

“We now have continued to retire legacy merchandise and continued lowering the complexity of recent merchandise,” stated Maharaj.

Some 81 merchandise have been rationalised and greater than 200 000 purchasers had been moved to new-generation merchandise.

Through the first half of 2021, 31 funding portfolios (with belongings of R500 million) had been rationalised and 4 000 purchasers have switched into different portfolios.

Nonetheless, administration expects the SA enterprise and financial surroundings to stay difficult for the rest of the yr. “Shoppers and companies are anticipated to stay beneath stress,” stated Munro.

The following large factor is the completion of the merger with Customary Financial institution, which administration expects can be finalised through the coming six months.

Hear as Fifi Peters chats to Customary Financial institution CEO Sim Tshabalala and Liberty CEO David Munro (or learn the transcript here):

 



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