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.
Botswana Life, a stalwart in the life business this Tuesday launched its affluent service centre which, according its Chief Executive, ‘opens up a world of investment, growth and security’ to its multitudes of existing and potential clients.
The affluent service centre, which is located at Central Business District, is the first of its kind in the country and provides high-end customer service, including personal visits, to qualifying clients. Speaking at the official launch of the centre, Botswana Life boss, Bilkiss Moorad said exclusiveness in the local insurance industry is new in Botswana, but is fast gaining traction globally. As a leading company, it is not surprising that the company is launching such service platform, she stressed.
“While exclusive and new to our industry, affluent service is slowly becoming a global proposition and gaining traction,” said Moorad at a gathering which included Permanent Secretary to the President, Carter Morupisi. Botswana Life, a company which is owned by Botswana Insurance Holdings Limited is content that it is the first to launch an affluent service centre, a development which further puts them ahead of peers.“We realise Africa is poised to be the next frontier for this kind of service. We have taken the lead as Botswana Life to introduce this model to our local insurance market,” said Moorad who took the leadership from Catherine Lesetedi-Letegele early this year.
Botswana Life, which controls over 70 percent of the life business, constantly thrives to innovate and match ‘our offerings to our customer goals’. Moorad explained the affluent service centre comes hot on the heels of three life products that her company launched. The products are Tapologo retirement annuity, Isago savings plan and Poelo term assurance.
“The launch of these products, and tonight’s launch of our Affluent Service Centre is a clear testimony that Botswana Life has some exciting times ahead,” said Moorad. Speaking at the same event, Morupisi, who is also Botswana’s cabinet secretary commended Botswana Life for coming with such a centre. “In today’s highly competitive industry, participating entities have to always endeavour to provide service that sets them apart from the rest,” said Morupisi. What is setting Botswana Life apart from the rest is that the affluent centre is the first of its kind in Botswana.
Morupisi reminded the company of the importance of quality customer care, which is often found lacking, both in the private and public space. Head of affluence centre, Colleta Simbanegavi told attendants that market segmentation allows the company to know better clients’ tastes, expectations and preferences.
Botswana Insurance Holdings Limited (BIHL) group announced its plans to expand its operating division, Legal Guard outside Botswana.
Presenting the group’s half year ended 30 June 2015 results on Wednesday, BIHL group chief executive, Gaffer Hassam said in the next six months they are looking for market opportunities outside Botswana. “Legal Guard has three percent market share in the insurance industry in Botswana, so it has a lot of opportunities. But in the next six months we will be exploring the market opportunities outside Botswana,” said Hassam. Speaking to BG Business he said they have not yet identified the countries but are looking at Southern Africa. He said 2015 will be dedicated to a continued focus on the recovery phase of the business strategy as well as commencement of activities to exploit a dominant market position and related competitive advantages. “The second half of 2015 will also witness the introduction of new products into the market,” said Hassam.
Following the sale of its general insurance business (BIHL Sure!), which comprised short term insurance and legal aid cover, Legal Guard in 2014, BIHL refocused on Legal Guard business. Hassam explained that Legal Guard is the second major contributor to BIHL group revenue after Botswana Life. He said in this year they introduced a new three-year strategy as a roadmap for guiding Legal Guard business through recovery and consolidation to sustainable profitability. “As part of the recovery phase of the strategy, the first half of the year has seen Legal Guard continuing its efforts to reinvigorate the business by increasing sales, improving the customer service experience and enhancing operational efficiencies,” said Hassam. He said the new strategy has resulted in a marked improvement in financial performance as illustrated by 22 percent increase in revenue compared to the first half of 2014. The new strategy is about growing the market and educating the public about legal insurance.
“We have seen a meaningful growth in profits this year so we want to maintain this growth standard,” he said. “Legal Guard was struggling in profitability but the rebranding has resulted in the positive profit. Its brand identity has also been refreshed to symbolise the rejuvenation of the business,” he said. Since its establishment in 2012, BIHL Sure! was continually recording losses as it registered an operating loss of P27 million in 2014. In the six months ended 30 June 2015 the group has recorded the net insurance premium increase of 32 percent to P1.3 billion and the value of new business increased by nine percent to P78.9 million.
In the first half of 2015, the group rolled out the new five-year strategy for the life insurance, which is focused on steering the company towards sustained growth. Hassam said with the implementation of the new strategy now underway, management firmly believes that the company will continue delivering real sustainable growth on all its key performance indicators despite growing competition and muted economic growth. BIHL group operations include Life Insurance, (Botswana Life), asset management (Botswana Insurance Fund Management) and Legal Guard. It also has associate holdings of 23 percent in Letshego Holdings and 33 percent in Funeral Services Group (FSG).