Sanlam Limited · JSE:SLM
Sanlam — Investor Presentation (2020)
83 slides from Sanlam's investor presentation, 2020
Slide 1: Benchmark 2020
Benchmark 2020
Slide 2: Empowering Insights
EMPOWERING INSIGHTS
Slide 3: All About the Individual
ALL ABOUT THE INDIVIDUAL WWW.SANLAMBENCHMARK.CO.ZA
Slide 4: Top Trends
TOP TRENDS Consultant Survey Pre-Covid 25% 20% 15% 10% 5% 0% Technological Member Integrated Flexibility Price Generation Focus on Pre- Capital Indexation Impact Innovation Focus Suite Reductions Shift Retirees Protection Investing WWW.SANLAMBENCHMARK.CO.ZA
Slide 5: Top Trends
TOP TRENDS Consultant Survey Pre-Covid 25% 20% 15% 10% 5% 0% Technological Member Integrated Flexibility Price Generation Focus on Pre- Capital Indexation Impact Innovation Focus Suite Reductions Shift Retirees Protection Investing WWW.SANLAMBENCHMARK.CO.ZA
Slide 6: Top Advice Trends
TOP ADVICE TRENDS Consultant Survey Pre-Covid 20.00% 18.00% 16.00% 14.00% 12.00% 10.00% 8.00% 6.00% 4.00% 2.00% 0.00% Costs of benefits and Provision of financial advice Standard disciplines Prescribed assets More time to be dedicated to services through to members member education WWW.SANLAMBENCHMA
Slide 7: Top Advice Trends
TOP ADVICE TRENDS Consultant Survey Pre-Covid 20.00% 18.00% 16.00% 14.00% 12.00% 10.00% 8.00% 6.00% 4.00% 2.00% 0.00% Costs of benefits and Provision of financial advice Standard disciplines Prescribed assets More time to be dedicated to services through to members member education WWW.SANLAMBENCHMA
Slide 8: Changing Nature of Advice
CHANGING NATURE OF ADVICE Consultant Survey Pre-Covid 25.00% 20.00% 15.00% 10.00% 5.00% 0.00% Member Communication Member Engagement Impact Members Use Data to Impact Members WWW.SANLAMBENCHMARK.CO.ZA
Slide 9: Paradigm Shift
PARADIGM SHIFT Member’s experience of retirement funds Enable better decisions Engagement Data Role of Umbrella Funds Changed expectations of Consultants & Service Providers Reduced complexity > 1,000,000 members joined over the past decade Default Regulations WWW.SANLAMBENCHMARK.CO.ZA
Slide 10: Slide 10
Slide 11: Emotional Impact
EMOTIONAL IMPACT
Slide 12: Under Pressure
UNDER PRESSURE STATS SA ALL TOLD COVID-19 SURVEY 8% lost jobs during the lockdown 26% experienced reduction in income during lockdown 10% increase in persons reporting no income during lockdown 19% indicate that lockdown will have a major impact on ability to meet financial obligations 12% concerned
Slide 13: Member Behavior
MEMBER BEHAVIOR 30% 25% 20% 15% 10% 5% 0% Members’ queries Requests from Requests for Members' queries Digital Member None of the above The utilisation of and/or complaints members to financial advice regarding their engagement from investment retirement on their access portions of from members grou
Slide 14: Financial Relief to Members
FINANCIAL RELIEF TO MEMBERS 35% 30% 25% 20% 15% 10% 5% 0% WWW.SANLAMBENCHMARK.CO.ZA
Slide 15: Temporary Suspension of Contributions
TEMPORARY SUSPENSION OF CONTRIBUTIONS Financial Relief to Members 35% 30% 25% 20% 15% 10% 5% 0% WWW.SANLAMBENCHMARK.CO.ZA
Slide 16: Temporary Increase in Tax Free Amount from R500K to R1M
TEMPORARY INCREASE IN TAX FREE AMOUNT FROM R500K TO R1M Financial Relief to Members 35% 30% 25% 20% 15% 10% 5% 0% WWW.SANLAMBENCHMARK.CO.ZA
Slide 17: Once Off Tax Exempt Withdrawal
ONCE OFF TAX EXEMPT WITHDRAWAL Financial Relief to Members 35% 30% 25% 20% 15% 10% 5% 0% WWW.SANLAMBENCHMARK.CO.ZA
Slide 18: Member Data
MEMBER DATA Sanlam RFA Administration Data Fund Value (R’) Proportion Average Average Gross Average Gross Pensionable Contribution Contribution Salary (R’) (R’) (% of APS) < 50,000 50% 107,000 13,000 12% 50,000 – 100,000 10% 205,000 27,000 13% > 100,000 40% 330,000 55,000 17% Total 100% 203,000 31,0
Slide 19: Net Effect
NET EFFECT Tax relief limited in scope Access or Borrowing May not provide enough relief Impact long term outcomes Conflicting needs System not prepared Low preservation rates impact
Slide 20: Applied for Suspension
APPLIED FOR SUSPENSION Survey closed 5 June 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% Consultants Funds/Employers Yes No WWW.SANLAMBENCHMARK.CO.ZA
Slide 21: Expected Duration
EXPECTED DURATION 50% 45% 40% 35% 30% 25% 20% 15% 10% 5% 0% 1 2 3 4 5 >6 Consultants Funds/Employers WWW.SANLAMBENCHMARK.CO.ZA
Slide 22: Reactions of Members
REACTIONS OF MEMBERS 35% 30% 25% 20% 15% 10% 5% 0% Concern regarding their Concern whether they would Concern regarding the loss Gratitude towards the No reactions noted retirement outcomes be covered for COVID-19 of insurance coverage employer related insurance claims Consultants Funds/Employers WW
Slide 23: Communication Mechanisms
COMMUNICATION MECHANISMS 120 100 80 60 40 20 0 Email WhatsApp SMS Other Intranet Webinar Telephone Unsure Social Media Did not communicate Consultants Funds/Employers WWW.SANLAMBENCHMARK.CO.ZA
Slide 24: Awareness of Suspensions
AWARENESS OF SUSPENSIONS 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% Not at all Moderate Fully Consultants Funds/Employers WWW.SANLAMBENCHMARK.CO.ZA
Slide 25: Contact Details
CONTACT DETAILS 70% 60% 50% 40% 30% 20% 10% 0% Yes Partial Yes Partial No No Unsure Consultants Funds/Employers WWW.SANLAMBENCHMARK.CO.ZA
Slide 26: Draft Conduct Standards
DRAFT CONDUCT STANDARDS In respect of EACH MEMBER … Full name Date of membership Date of Birth Employer Pay Number SA ID number or Passport Annual pensionable emoluments and annual CTC number % and amounts of contributions Income Tax Number Split between member and employer contributions Contact num
Slide 27: Has Risk Pricing Stabilized?
HAS RISK PRICING STABILIZED? Consultant Survey Pre-Covid-19 Upward rates revisions No Linked to economic cycle Covid-19 Healthcare Impact Yes Economic Impact WWW.SANLAMBENCHMARK.CO.ZA
Slide 28: Expected Premium Increases
EXPECTED PREMIUM INCREASES 60% 50% 40% 30% 20% 10% 0% < 10% 10% - 20% > 20% No increases anticipated Consultants Funds/Employers WWW.SANLAMBENCHMARK.CO.ZA
Slide 29: Review Disability Income Benefits
REVIEW DISABILITY INCOME BENEFITS 60% 50% 40% 30% 20% 10% 0% Change from flat benefit Increase the waiting Reduce benefit levels Terminate the disability No need to review the Disability income structures to income tax period income benefits policy disability income benefits not available rate scale
Slide 30: Evaluated Insurer Solvency
EVALUATED INSURER SOLVENCY 70% 60% 50% 40% 30% 20% 10% 0% Consultants Funds/Employers Yes No WWW.SANLAMBENCHMARK.CO.ZA
Slide 31: Frustrations with Insurers
FRUSTRATIONS WITH INSURERS Consultant Survey Pre-Covid 30% 25% 20% 15% 10% 5% 0% Underwriting process Steep rate increases Administration burden Claims repudiation Complex benefit None structures WWW.SANLAMBENCHMARK.CO.ZA
Slide 32: Frustrations with Insurers
FRUSTRATIONS WITH INSURERS Consultant Survey Pre-Covid 30% 25% 20% 15% 10% 5% 0% Underwriting process Steep rate increases Administration burden Claims repudiation Complex benefit None structures WWW.SANLAMBENCHMARK.CO.ZA
Slide 33: A Rough 12 Years
A ROUGH 12 YEARS ! a 1,436,900 100 54 412,40 a 30 14 25,10 wu 414,70 171 136°00
Slide 34: What Does the Future Hold
WHAT DOES THE FUTURE HOLD … V–U-W–L… US Elections Geopolitical Conflict Debt – GDP Future Pandemics ??? … WWW.SANLAMBENCHMARK.CO.ZA
Slide 35: Review Status Quo
REVIEW STATUS QUO Accumulation Time on your side Ride volatility Equity risk premium Pre-Retirement Conservative Less volatile
Slide 36: Member Switching Behavior
MEMBER SWITCHING BEHAVIOR Sanlam RFA Data WWW.SANLAMBENCHMARK.CO.ZA
Slide 37: Investment Defaults
INVESTMENT DEFAULTS Median tenure estimated at 4 years (Stats SA) Preservation a major obstacle Member switching behavior during downturns telling Reconsider investment defaults (11% cons ||16% funds/employers) Allow for volatility protection + Risk Profiled Member Choice Smoothing and/or guarantees
Slide 38: Pre-Retirement Defaults
PRE-RETIREMENT DEFAULTS Most retirement capital available Risk of losses greatest Opportunity to rebuild the least Retirement a once-off event Correlations in diverse asset classes converge in crisis 13% of Consultants & 11% of Employers / Funds considering Relevant post-retirement to mitigate seque
Slide 39: Top Trends
TOP TRENDS Consultant Survey Pre-Covid 25% 20% 15% 10% 5% 0% Technological Member Integrated Flexibility Price Generation Focus on Pre- Capital Indexation Impact Innovation Focus Suite Reductions Shift Retirees Protection Investing WWW.SANLAMBENCHMARK.CO.ZA
Slide 40: How to Rebuild SA's Economy
HOW TO REBUILD SA’S ECONOMY 25% 20% 15% 10% 5% 0% WWW.SANLAMBENCHMARK.CO.ZA
Slide 41: Use Unclaimed Benefits to Help the Poor
USE UNCLAIMED BENEFITS TO HELP THE POOR 25% 20% 15% 10% 5% 0% WWW.SANLAMBENCHMARK.CO.ZA
Slide 42: Infrastructure / ESG / Alternatives / SA Inc.
INFRASTRUCTURE / ESG / ALTERNATIVES / SA INC. 25% 20% 15% 10% 5% 0% WWW.SANLAMBENCHMARK.CO.ZA
Slide 43: What Impact?
WHAT IMPACT? Consultant Survey Pre-Covid 35% 30% 25% 20% 15% 10% 5% 0% Decent work and economic growth Climate action, clean water and sanitation Affordable and clean energy WWW.SANLAMBENCHMARK.CO.ZA
Slide 44: Post-Covid Irrelevance
POST-COVID IRRELEVANCE Individual’s needs Low success rate Cashflow Accessibility Why bother Window of opportunity Employer Value Proposition Connect Attract / Retain / Engage Engage Burden Provide meaning Administration / Complaints WWW.SANLAMBENCHMARK.CO.ZA
Slide 45: www.sanlambenchmark.co.za
WWW.SANLAMBENCHMARK.CO.ZA
Slide 46: Reimagine Our Purpose
| REIMAGINE OUR PURPOSE
Slide 47: Going Viral
'@ Saniam | | | | GOING VIRAL
Slide 48: Y m by
Y m by 2
Slide 49: Professions die and new professions emerge
Professions die and new professions emerge Whole industries die as new industries emerge Possible to rent almost anything so ownership is unnecessary Designs become rapidly obsolete Culture is transient – goods, services & relationships are temporary Disposable goods are commonplace
Slide 50: Shift Happens!
SHIFT HAPPENS! WWW.SANLAMBENCHMARK.CO.ZA
Slide 51: www.sanlambenchmark.co.za
WWW.SANLAMBENCHMARK.CO.ZA
Slide 52: World Economic Forum Definition of 4IR
WORLD ECONOMIC FORUM DEFINITION OF 4IR “…fundamental change in the way we live, work and relate to one another. It is a new chapter in human development, enabled by extraordinary technology advances… commensurate with those of the first, second and third industrial revolutions. These advances are me
Slide 53: Digital Revolution
DIGITAL REVOLUTION Drivers Member Centricity Cyber resilience Relevance Operational resilience Security Cost efficiencies Continuity Connections Value for money Individualisation Engagement Customer Experience Satisfaction WWW.SANLAMBENCHMARK.CO.ZA
Slide 54: Cybersecurity
CYBERSECURITY NTT Global Threat Intelligence Report Most attacked sectors in South Africa … Insurance 50% Finance 44% Retail 3% WWW.SANLAMBENCHMARK.CO.ZA
Slide 55: Biggest Risks
BIGGEST RISKS Consultant Survey Pre-Covid 25% 20% 15% 10% 5% 0% WWW.SANLAMBENCHMARK.CO.ZA
Slide 56: So Do They
SO DO THEY … Change to ‘Work from Home’ Appetite for information and news Innovative threat actors Pattern of Life WHO Updates Mandatory email to all staff Safety measures Treatments WWW.SANLAMBENCHMARK.CO.ZA
Slide 57: Cybersecurity
CYBERSECURITY Mimecast ‘100 days of coronavirus’ report 26% increase in spam detections Australia South Africa 30% increase in impersonation detections 35% increase in malware detections Europe USA 56% increase in blocking of URL links UK Sanlam Cyber Resilience Benchmark Figure 5: Rejected Spam Vol
Slide 58: Life Healthcare announces cyber incident
© Sanlam LIFE pane Life Healthcare announces cyber incident 09 June 2020 The Life Healthcare Group regrets to announce that its southern African operation has been the victim of a targeted criminal attack on its IT systems. We acted immediately on becoming aware of the incident and took our systems
Slide 59: New Phrases
NEW PHRASES
Slide 60: Lifesavers
LIFESAVERS WWW.SANLAMBENCHMARK.CO.ZA
Slide 61: Efficiencies – Enable the Human
EFFICIENCIES – ENABLE THE HUMAN Automate the routine Enable the human Robotics Robo-Counselling HR burden Consultant time WWW.SANLAMBENCHMARK.CO.ZA
Slide 62: Connecting Through Lockdown
CONNECTING THROUGH LOCKDOWN 35% 30% 25% 20% 15% 10% 5% 0% Email Telephone WhatsApp Other SMS Intranet Webinar Social Media Did not Unsure communicate WWW.SANLAMBENCHMARK.CO.ZA
Slide 63: Consultants' Toolkit
CONSULTANTS’ TOOLKIT 140 120 100 80 60 40 20 0 Zoom MS Teams WhatsApp MS Skype Webex Linked In None of the above WWW.SANLAMBENCHMARK.CO.ZA
Slide 64: Consultants' Experience
CONSULTANTS’ EXPERIENCE 90.00% 80.00% 70.00% 60.00% 50.00% 40.00% 30.00% 20.00% 10.00% 0.00% Communication to Communication to The operational The Retirement benefits The digital capability Support provided to you from service members from resilience of your appropriateness of counselling provided o
Slide 65: Fund / Employer Experience
FUND / EMPLOYER EXPERIENCE 80.00% 70.00% 60.00% 50.00% 40.00% 30.00% 20.00% 10.00% 0.00% Communication to you, Communication to The operational The ability of services The appropriateness of Retirement benefits your Retirement Fund members / employees resilience of your providers to engage your Reti
Slide 66: Changing Nature of Advice
CHANGING NATURE OF ADVICE Consultant Survey Pre-Covid 25.00% 20.00% 15.00% 10.00% 5.00% 0.00% Member Communication Member Engagement Impact Members Use Data to Impact Members WWW.SANLAMBENCHMARK.CO.ZA
Slide 67: Advice Strategy
ADVICE STRATEGY Consultant Survey Pre-Covid No Unsure Bulk of members do not Strategy have access to ‘Own Advisor’ Own Experienced significant Salaried Advisor benefits of employer vetted Advisors advice structures High Quality Financial Advice adds tremendous value Panel of NB link in Member-centri
Slide 68: Advice Strategy
ADVICE STRATEGY ALL TOLD COVID-19 SURVEY Bulk of members do not have access to ‘Own Advisor’ Experienced significant benefits of employer vetted advice structures High Quality Financial Advice adds tremendous value NB link in Member-centric strategy WWW.SANLAMBENCHMARK.CO.ZA
Slide 69: Does Financial Literacy Training Add Meaningful Value?
DOES FINANCIAL LITERACY TRAINING ADD MEANINGFUL VALUE? Consultant Survey Pre-Covid Unsure Overwhelming support No Execution Generic Information Empowering Opt In for Advice Feedback Loop Yes WWW.SANLAMBENCHMARK.CO.ZA
Slide 70: Generations
GENERATIONS 60% 50% 40% 30% 20% 10% 0% Baby Boomers Gen X Millennials Gen Z WWW.SANLAMBENCHMARK.CO.ZA
Slide 71: Generations
GENERATIONS 60% 50% 40% 30% 20% 10% 0% Baby Boomers Gen X Millennials Gen Z WWW.SANLAMBENCHMARK.CO.ZA
Slide 72: Millennial Views
MILLENNIAL VIEWS Sanlam Benchmark Focus Group Lived experience of parents Balancing act of spending on education … children’s needs takes priority Property due to influence of parents Lack of focus on emergency savings … make a plan!!! Request more than paper statements Need help with Debt Access to
Slide 73: Individualised Member Support
INDIVIDUALISED MEMBER SUPPORT Information at Critical Points Withdrawal Pre-Retirement Written / Electronic / Telephonic / F2F FinTech Apps Portals WhatsApp SMS WWW.SANLAMBENCHMARK.CO.ZA
Slide 74: Proactive Counselling
PROACTIVE COUNSELLING Market downturn due to Covid-19 Increase in switching activity Engage members to inform them of risk of switches Living Annuity Drawdowns Engage annuitants electing to increase Inform them of impact WWW.SANLAMBENCHMARK.CO.ZA
Slide 75: Member Switching Behavior
MEMBER SWITCHING BEHAVIOR Sanlam RFA Data WWW.SANLAMBENCHMARK.CO.ZA
Slide 76: ICAS Findings Over Lockdown
ICAS FINDINGS OVER LOCKDOWN 100% increase in requests for debt counselling 300% increase in request for will drafting and estate planning
Slide 77: Credit Management
CREDIT MANAGEMENT WWW.SANLAMBENCHMARK.CO.ZA
Slide 78: Will Drafting Through Existing Member Engagement Platforms
WILL DRAFTING THROUGH EXISTING MEMBER ENGAGEMENT PLATFORMS WWW.SANLAMBENCHMARK.CO.ZA
Slide 79: Telemedicine
TELEMEDICINE WWW.SANLAMBENCHMARK.CO.ZA
Slide 80: Now Is the Time to Act!
NOW IS THE TIME TO ACT! WWW.SANLAMBENCHMARK.CO.ZA
Slide 81: Disconnected
DISCONNECTED Members & Decision Makers Financial circumstances Education level The age of decision makers millennials are more than 50% of membership Joint forum / Trustee representation is <10% WWW.SANLAMBENCHMARK.CO.ZA
Slide 82: March 24 Address
MARCH 24 ADDRESS “It is now in your hands” WWW.SANLAMBENCHMARK.CO.ZA
Slide 83: Benchmark 2020
Benchmark 2020