In the retirement-benefits space, two years is decidedly ‘short-term’. But in the modern age of economic upheaval and the COVID-19 pandemic, two years can feel like an absolute eternity. When Kanyisa Mkhize was appointed as Sanlam Corporate CEO in September 2020, she took the helm of a stable business operating in deeply unstable times. What has she learnt since then, and what is her outlook – for Sanlam and for the broader retirement industry – now that the worst of the pandemic appears to be under control?

‘We are really pleased to see the risk and the impact of COVID-19 subsiding, and we are quite optimistic about the future,’ she says. ‘There is, however, still a lot of uncertainty and residual risk. The conversations in the industry have highlighted that pandemics like COVID are going to become more prevalent, due to factors like climate change, globalisation, habitat destruction and increased human-wildlife contact.’

Mkhize echoes widely held concerns that pandemics will appear with greater frequency and severity in the future.  ‘As an industry we need to remain cautious in our product design and pricing to ensure that we remain sustainable and can really deliver on the promises made to our clients,’ she says. She adds that although Sanlam expects the economic outlook to remain tough over the short term, the business is encouraged by SA’s recently announced economic reforms. ‘We believe this could positively impact GDP growth, if implemented over the medium term,’ she says.

In that environment, one of Sanlam Corporate’s key focus areas is – as Mkhize describes it – to ‘really connect with our institutional client base and understand how their integrated needs have evolved over the past two years and post the pandemic. We want to remain relevant and make sure that we provide our clients the peace of mind that they come to us for, empowering them to improve their financial outcomes throughout their lifetime and not just at retirement’.

RESPONDING TO REFORMS 
The ability to predict and respond to a changing environment became clear during COVID-19 – and it continues to drive Sanlam Corporate’s response to the retirement industry’s changing regulatory environment. Partly in response to the economic fallout of the crisis, National Treasury recently announced a set of reforms that will significantly change how South Africans save for their retirement.

‘Our core purpose is to really change people’s lives by empowering them to live and retire with confidence,’ says Mkhize. ‘Sanlam supports the regulatory reforms that have been implemented over the past 20 years. These have gone a long way in encouraging saving, and reducing the costs associated with saving for retirement.

‘New reforms like the proposed two-pot system, which looks to provide some access to retirement savings, will enable South Africans to also save for non-retirement purposes – for example, emergencies – via their retirement funds, while preserving more of their savings for retirement.’

The proposed two-pot system also aims to encourage retirement fund members to preserve their retirement savings, she explains.

‘It makes it more flexible, to accommodate unforeseen pressures that many South Africans face during the span of their working lives. It makes it possible for workers to not take rash decisions, such as resigning from their employment simply to access their retirement funds. It would greatly assist members during a crisis like the COVID-19 pandemic, when many employees faced reduced salaries or were not paid at all for the period.’

BIG PLANS FOR SMALL BUSINESS
Mkhize’s own focus, meanwhile, is on transitioning Sanlam’s people to a post-COVID world and really unpacking what working in a hybrid world looks like.

‘We really want to leverage the flexibility and learnings we got from working remotely without compromising the connectedness, collaboration and innovative thinking we get from physically working together,’ she says. Having said that, however, Mkhize is clear that digitalisation and automation should not wait. ‘We learnt during the pandemic that where there is a will, that change can actually happen very quickly,’ she says. ‘As an industry we need to fast-track our digitalisation journey and actively look for ways to build efficiencies into our capability.’

Small businesses play a key role in that journey. While much of Sanlam Corporate’s business comes from larger employers, SMMEs remain a critical part of the value chain. ‘We recognised SMMEs’ needs for financing and employee-benefits solutions, and have responded through an innovative range of tailor-made and specifically designed financial planning solutions for SME owners,’ she says. ‘These include our small-business provident fund, and we are thrilled to be launching, in October, our Digital Umbrella Plan, aimed at this market.’

Mkhize points to research that indicates that out of 16 million employed people under the age of 65, only 7 million contribute to pension or provident funds. ‘We believe that this is because many of these people form part of the SMME sector, where contributing to a retirement fund is not a priority,’ she says. ‘It’s with this in mind that we’ve decided to make it easier for these members to contribute to retirement savings by creating a fully digital facility for employers to sign up to. It’s a retirement funding facility that is quick, simple and effective in achieving the goal of improving access to a good retirement outcome.’

Sanlam’s Digital Umbrella plan provides options to sign up to fixed rand amount of life cover, disability cover as well as funeral cover, if necessary. The product aims to improve levels of financial inclusion for a segment of the market that makes up the bulk of employment in SA – a segment, Mkhize says, that Sanlam Corporate is committed to well into the future.

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www.sanlam.co.za

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