Botswana Insurance Holdings Limited’s subsidiaries Legal Guard and Botswana Life Insurance Limited are undergoing operational challenges, with a possibility of retrenchments.
Although it is not yet clear how many employees may find themselves on the streets after the process, close sources have indicated that all is not well at the Fairgrounds Office Park block A.
Those close to the two companies indicate that the disheartening news from the BLIL side, were delivered at meetings held last month (April 3,4,5th 2017); during which staff members was advised that the Botswana Life Board of Directors, had instructed the Executive Committee to review the company’s operating model to ensure the long term sustainability and success of the business. This is a result of BLIL’s performance not reaching the levels that were targeted, which subsequently resulted in growth expectations not being met.
At the same time the Legal Guard, a company acquired from Letshego some years ago is also reviewing costs and process efficiencies in a desperate bid aimed at improving financial performance and sustainability of the business. In consequence, it may become necessary to make structural changes to Legal Guard as part of the above exercise.
Botswana Life staff members were given notice of possible intention to terminate contracts of employment for operational reasons in terms of the section 25 of the Employment Act, sent on the 12th April 2017. The letter notes that, “pursuant to the said meetings (April 3,4,5th) we now formally give you written notice that it may become necessary to make structural changes to BLIL as part of our above strategic implementation.
In this event, we anticipate that all or some of our employees may be affected in a variety of ways, including but not limited to their positions becoming redundant.”
The notice further noted that, while the precise details regarding the departments that may be affected, the number of positions that may become redundant and the associated number of employees likely to be impacted are yet to be firmed up, the companies nonetheless considered it imperative to give the statutory notice of a possibility of a redundancy and/or retrenchment situation.
This week, on Tuesday 23rd May 2017, BIHL Group CEO, Cathrine Lesetedi-Letegele released a notice to BIHL Staff, regarding the developments at Legal Guard, stating that, “the business anticipates that all or some of the Legal Guard employees may be affected in a variety of ways, including but not limited to their positions becoming redundant.”
According to close sources the BLIL process is anticipated to be completed by July whilst at Legal Guard is next month (June), which the sources allege that at Legal Guard they only learnt about this development a week ago.
The sources have alleged that the group company is spending much money on management salaries, who at the same time many of them, are on the same portfolios. Sources also claim that the company strategies are not delivering to the expected level.
After bringing to close the Sekgantshwane 2014 strategy in December 2014; a three year strategy which was aimed at positioning the company amongst the best life insurers globally, BLIL in July 2015 unveiled a new corporate strategy for the horizon 2015-2020.
The new BIHL CEO, Letegele who took over the reigns from Gaffar Hassam, is working round the clock on strategies to improve the group’s footprints operations for a well diversified insurance outfit within the SADC region. Currently BLIL dominates with an estimated market share of over 75 percent and the group intends to improve and grow its existing offerings.
The group is also pinning its hope on this strategy to turn around the fortunes of the ailing Legal Guard. The company executives attribute this poor performance to additional legal claims and increased operational costs.
In a response to Botswana Guardian inquiry late Wednesday, Letegele said: “I confirm that Botswana Life Insurance Limited (BLIL) and Legal Guard are undergoing a cost efficiency exercise, which may result in some positions becoming redundant.
Discussing confidential matters is not a practice we make a habit of and this decision has certainly not been taken lightly but was necessary to ensure operational efficiencies”.
All staff members have been engaged and management is doing its utmost to ensure the process is managed according to the highest standards of regulatory, labour and HR practice, said Letegele who was out of the country on Wednesday.
She said Botswana Life Insurance Limited continues to be the country’s leading life insurance services provider, with more than 41 years of heritage, while Legal Guard remains the legal expenses business of choice .
“ We remain focused on delivering on our strategy of growing our people, driving excellent service for our customers, growth and returns to our shareholders and making a sustainable impact in communities we operate in. We remain steadfast in our commitment to our customers and indeed all of our people,” she added.