Get more Mail & Guardian
Subscribe or Login

Creating mutual value and growth

This story is sponsored

The mutual and co-operative insurance market has been the fastest-growing part of the global insurance industry in the 10-year period since the global financial crisis between the years 2007 and 2017. 

According to a 10-year review in the Global Mutual Market Share report launched by the International Cooperative and Mutual Insurance Federation (ICMIF), by combining ownership and policyholder roles, a mutual structure can align incentives between customer and insurer, which in many cases leads to an efficiency advantage.  The report states that this could in turn be part of many reasons why mutuals are enjoying significantly greater loyalty from their members. 

With a proud history of over 100 years, AVBOB, the largest mutual assurance society in Africa, has provided solace to families and grieving survivors on the basis of its founding principles of working together with a mutual aim. This started with providing dignified funerals of loved ones during the Spanish Flu in 1918. 

A mutual society, which is an organisation owned by its members, is akin to belonging to a family because, in a family, people share. In a mutual society, it’s no different. The society’s profits are reinvested in the group to help improve services and benefits, and it is given back to its policyholders. This is unlike traditional companies where external shareholders expect dividends. There are a multitude of funeral and insurance providers in South Africa, from big banks to smaller operators. 

The funeral insurance market is, however, highly competitive and continues to grow as a sector. According to the Centre for Financial Regulation and Inclusion (Cenfri), about 11-million South Africans have some form of formal funeral insurance, and a large majority of South Africans have cover through stokvels.  The premium income of the global mutual and co-operative insurance sector between 2007-2017 grew by a total of 30% compared to 17% growth of the total global insurance industry, according to research published by ICMIF highlights.

Making a difference

Carl van der Riet, chief executive officer of AVBOB, explains that the organisation has adopted a shared value business model — rooted in its mutual status — which means that the benefits of everything it does are given back to its members in the form of free benefits.

“We do this not to gain a competitive advantage or to improve our corporate image, but because shared value and mutual benefit is simply who we are. It has given us the capacity, capability, and infrastructure to support the AVBOB family throughout life until the end,” Van der Riet explained.

Making a difference is a key focus at AVBOB. The company has donated 56 container school libraries and invested R135-million in the upgrade of rural schools as well as a further R15-million in the Sanitation Appropriation for Schools project. Its extensive corporate social investment (CSI) programme includes a popular annual poetry competition, now in its fifth year. 

The poetry competition, by the end of 2020, had attracted more than 80 000 entries in all 11 official languages. The poems, themed around love, hope, death and birth, are aimed at supporting and comforting bereaved families during their time of mourning. 

Driving mutual solutions

AVBOB recently responded to a plea for mutual support by Nelson Mandela Academic Hospital in the Eastern Cape, which didn’t have sufficient space in its existing mortuary facility. The pandemic has overstretched the public hospital, which serves five district municipalities in the Mthatha region.

The container mortuary — which is converted from refrigerator “reefer” containers, with its own cooling system and modified to include mortuary racks, lighting, a ramp and a standby generator — has the capacity to accommodate 40 deceased. 

The innovative container mortuary solution has been helping the Group’s funeral branches boost the capacity of their mortuaries, enabling them to cope better with surging Covid-19 mortality rates in hot spot areas. 

As a mutual society, AVBOB believes it has a societal duty to help its members and indeed South Africa as a whole. The effect of the Covid-19 lockdown has laid bare numerous challenges in South Africa, most notably, gender-based violence (GBV) – a silent pandemic that has been a national crisis for many years. 

The fight against GBV has gained a new corporate partner. AVBOB has taken a stand against the alarmingly high rate of violence against women and children with its 365+ campaign. To launch the campaign in 2020, AVBOB donated R210 000 to seven NGOs across the country that are involved in assisting victims of GBV. 

Recognising the deep-rooted challenges created by poverty and inequality in the country, AVBOB remains committed through its shared value strategy to sustainable economic partnerships and community development initiatives.

Mutuals offer an important safety net for the less fortunate in society, the report by ICMIF highlights. It further states that this is becoming increasingly important as governments in many parts of the world retreat from social insurance provision. 

For more details, visit https://www.avbob.co.za/

About Mail & Guardian Sponsored Stories

The Mail & Guardian’s sponsored stories are produced in association with paying partners. We work closely with our partners to ensure all stories meet our standards of editorial quality, and offer information of value to readers.

If you would like to speak to our team, please contact us at this email address.

Related stories

Advertising

Today's top stories

Ice skating champion shows off the Cape Flats talent at...

A young ice-skating champion has beaten the odds and brought home a national gold medal

Study finds too much salt can damage immune cell function

The study investigated how sodium intake affects human cells by giving participants 6g of salt in tablet form each day for 14 days, while they continued with their normal diets.

New plan to tackle marine pollution

The environment department’s Source-to-Sea initiative will create 1 600 work opportunities

Gigaba insists he faced sinister threat, slams court ruling on...

The former cabinet minister told the Zondo commission he cannot see how the court concluded there was no evidence of a plot to kill him

Gigaba questions high court ruling on wife’s arrest

The former cabinet minister told the Zondo commission he cannot see how the court concluded there was no evidence of a plot to kill him
Advertising

press releases

Loading latest Press Releases…

×