Financial wellness: the DNA that is MMI Holdings Namibia

June 16, 2015, 11:09am

Financial wellness: the DNA that is MMI Holdings Namibia

MMI Holdings Namibia is one of the leading players in the non-banking financial sector and has since its inception accommodated the low, middle and high- income earners with their numerous risk management and medical aid administration products.

Prime Focus sat down with the Group’s Chief Executive Officer (CEO), Jason Nandago to discuss the Group’s prospects, trials, tribulations as well as milestones.

In rough estimates, how much of the market in insurance and medical aid administration does the MMI banner cater for? 
Before I can answer that question, let me just give a brief background that MMI Holdings Namibia was formed by a merger between Metropolitan and Momentum. As MMI Holdings Namibia, we consist of the following brands: Metropolitan Namibia/Swabou Life, Momentum Namibia, Momentum Asset Management and Methealth Namibia Administrators.

Metropolitan Namibia/Swabou Life provides life assurance, investment and savings needs to the lower
to middle-income market, whereas Momentum Namibia’s offering consists of employee benefits, retirement benefit solutions, life assurance as well as savings and investment products for the middle to higher-income markets. Methealth Namibia Administrators provide healthcare fund administration, while Momentum Asset Management Namibia caters for the asset management needs of our clients. That, in a nutshell, is MMI Holdings Namibia in terms of market share.

If then you want to discuss market share, I think we are the third-largest financial services’ group in the country. In terms of market share according to the information released
by our regulator Namfisa, one can look at the recurring premium income, which is the most sustainable measurement methodology, and in terms of that, we make up for about 26% of the market share. The other way is that of single premium income, and in terms of that, our market share is 19% with that measurement methodology.

What do you think have been the major reasons
why most Namibians do not partake in beneficial engagements, like medical and life cover? 
There are many, but I can probably list two or three
which I believe are major. The first one would have to be affordability. There are a lot of factors contributing to this, such as the fact that our unemployment rate is at around 30% and so on. The second one is the type of products. These, I believe, are the two main factors, and I think there is also a need for consumer education so that people can understand what is being offered, and how that can actually be used to cover themselves in terms of risk.

The medical aid industry is mostly influenced by the employer, as most employers give 40% – 80% of the contribution. So in essence, this becomes a fringe benefit for the employees, so the strategy from a national corporate perspective should be for more organisations to implement health benefits as part of their package offering, which would release pressure on the already burdened State health facilities.

The Social Security Commission is in deliberations for a National Health Plan. If this is implemented, it would assist us in achieving Vision 2030 in terms of healthcare being accessible to all. This should not be seen as a means
to an end; it should supplement the already available. Methealth Administrators is the largest health administrators in the country with over 75% of the Namibian market share. Currently, Methealth administers three medical aid schemes, being Bankmed, which is a closed scheme, NMC and PSEMAS; PSEMAS is the Namibian government scheme with over 250-thousand Namibian lives. This is huge, and government should be applauded for this.

The fact remains that clients see insurance as a luxury and not a necessity, without taking cognizance of the fact that insurance can create generational wealth. The products which are on offer sometimes might be targeting the lower- middle to higher-income bracket, and don’t really look at the lower-lower income bracket, the unbanked, SMEs and self employed.

In very simple terms, we have different products under the MMI Holdings Namibia group. MMI Holdings Namibia itself is not a client-facing brand. It is an investor brand and is listed on the Namibian Stock Exchange (NSX).

As MMI Holdings Namibia, through our client-facing brands, we have always strived to provide financial wellness to our clients with a holistic view of financial wellness advice which is cognizant of the fact that financial wellness is not only defined by wealth, but is defined when an individual has minimal financial stress and ongoing plans which put them on track to reach future financial goals and aspirations, and for that to be attained, it should also speaks to the health of our clients.

Our Metropolitan/Swabou brand purely operates in
the low to medium-income market. We call it the low to medium-income market, and I can confidently say that we are an active player in this market. It is a market, which we will continue to focus on because we believe in uplifting the communities within which we operate, where the values of Ubuntu are at the core DNA of doing business.

The Momentum brand on the retail side operates in the middle to high-end of the market, and for a brand, which has been operating for less than 8 years, we have made significant strides and continue to do so with our myriad risk products, and our corporate public sector product suite under Momentum funds@work. So in essence, the Momentum brand is targeting the higher net-worth market, which means its products compete directly with companies like Sanlam and Old Mutual to the top-end of the market. Moment Asset Management is an investment arm worth over N$12 billion.

Do you think the non-banking financial sector has opened up reasonably to allow the previously disadvantaged to play a part? 
Yes. The non-banking financial sector has done relatively well in opening up to the previously disadvantaged. If you look at the top management of the MMI Holdings Namibia, we are completely balanced and also gender- sensitive. Although the short-term industry still needs to match.

In terms of embracing transformation, the MMI Group has been at the forefront in the non-financial service sector, in all aspects, be it industry from an ownership perspective or executive management.

One of the best performing private equity firms, Stimulus, was being steered by our first lady, Mrs. Monica Geingos, and she has been at the forefront of bringing women to the centre in this industry.

Last year, you concluded your merger. Do you think the market has received it well? 
Yes, I think the market has embraced it. In addition, MMI Holdings Namibia is not a client-facing brand, so our rebranding exercise was for the client-facing brands like Momentum, Swabou and Metropolitan. For example, as you enter our building, the wall says MMI House, housing Momentum and Metropolitan/Swabou brands. Our branding strategy for our brands operating in the lower end of the market (Metropolitan/Swabou) is a co-branding strategy. These two brands individually are very strong in the market, so by combining these two brands, we have become Stronger as One.

This is because we believe that one size doesn’t fit all. We understand the uniqueness of our individual clients, and in addition also know that as they progress in live so does their needs, and therefore it is very important for us to cater for those individual needs, instead of going for a blanket approach.

Client centricity is how we do business. We are not about dictating to the client the type of product they need. Instead, our DNA is derived from the premise that the client tells us what it is that they aspire to, and we walk together with them to make those financial wellness aspirations and come to realise and therefore our existing clients, our clients have been very positive because they now understand that they are part of a bigger entity, and this ultimately means that their investments will yield better financial results.

What do you think are the major milestones achieved by the MMI Holdings Namibia Group in Namibia? Maybe I can answer this question simply by saying that during the entire process of the merger when we formed MMI Holdings Namibia; we have only lost one, at most two key staff members in both the companies, which we have brought together. The core and key management has remained and are still here, and to me that is a milestone because a merger creates uncertainty and if you don’t manage it well, then your competitors will take advantage of that uncertainty to poach your key employees. So to me, that is a milestone, the fact that we have been able to go through the merger and rebranding process and the core management teams are still in place and intact.

In addition, in terms of our new business, it’s much better than what we expected, and that shows that the merger and rebranding processes were highly successful. The mathematics of this merger have been such that one plus one has given us three.

What in your opinion does Namibia, as a country; have to do to get more of its people in key management positions within the corporate sector?

If I can answer this question, I’d have to do so harshly. Typically, Namibians are not natural-born entrepreneurs. They prefer to be employed rather than taking the risk and starting their own enterprises. So the aim should not be corporate sector, the vision should be that we groom more entrepreneurs.

The efforts, both from the private sector and government, should go into teaching children at schools to be more independent-thinking and creating opportunities for themselves, and not keeping them sticking with the culture of being employed. We need an innovative Namibia that has an entrepreneurial culture. This will help us reach our Vision 2030 aspirational goals.

How do you juggle the challenging responsibility of being a father and a cooperate leader? Life should be about living up to your own expectations, and importantly being yourself. I see so many people trying to fit into society and living up to other people’s expectations, perceptions and opinions about them, that they fall into the trap and stop being themselves because they have allowed other people’s perceptions to manage them. What they in actual fact do in the process is limit their own ambitions and aspirations, because you have lost control of your own life by surrendering it to somebody else. I have chosen to be a father and a family man, and

I have also chosen to be in the corporate world. One isn’t a sacrifice of the other; hence it doesn’t become a challenge to me, as it is a choice.

As pre-eminent business philosopher Jim Rohn declared: “All good men and women must take responsibility for creating legacies that will take the next generation to a level we could only imagine.” And that is all that I’m doing.

Tell us a bit about what a normal day for an executive like you is like? 
My typical job day is an easy day because I have capable executives. My role would be to plan and review. That’s really my job: to plan and review what my executives have done. That is usually a full-time job, because, the business is big and you have diverse views coming in from different executives, which you need to balance with the business, plan which you have structured. So, my typical job is to look at whether we are on track with what we have set out to do, or if we are failing, and if we are failing, then we will have to address the reason for that failure and get us back on track in terms of our targets and so on.

You also sit on a couple of boards for different companies. Do you think Namibia has done enough to improve corporate governance in the country’s private and public sectors?

Yes, Namibia has done a lot to improve corporate governance in the country’s private and public
sectors. The country has established its own corporate governance NamCode. The NamCode is based on the King III code, and provides guidance to all Namibian corporate entities on various governance matters.

There is no statutory obligation on companies to comply with the NamCode, but rather for companies to ‘apply
or explain’. Directors are accountable to shareholders and other stakeholders, and where directors opt not to implement the recommended practices as set out in the NamCode, they should be able to explain their reasoning and motivation to the shareholders.

As directors are accountable for compliance with their duties towards the company (including the fiduciary duty and the duty of due care and skill), they need to ensure that each and every decision is taken with care. Indeed, every decision counts!

The NamCode confirms the role of the Board as the focal point for corporate governance. In doing this, the NamCode has embraced the term Responsible Leadership, under which it has characterized a model Board of Directors.

Although the directors are ultimately accountable
for adherence to best-practice principles, the direct responsibility of the Board is focused on the design and adoption of adequate policies, inculcating the required culture to adhere to such policies, and the subsequent oversight of the implementation of such policies. Management bears responsibility for the implementation of policies.

In order to ensure the effective functioning of the Board, the NamCode proposes a unitary board structure comprising executive, non-executive and independent non-executive members. The Board should be chaired by an independent, non-executive director.

There is a notion that public sector companies do not have a clear demarcation of roles between boards and management, and sometimes this sacrifices delivery. Do you think this is the same for private institutions?

I would say no because here the governance structure becomes key. There is the role of the board, and there is a role for executive management. Although the board advices management, this means that there are specific demarcations about what roles people play.

Just as boards in the private corporate sector are accountable to shareholders, the public sector should be run on the same premise. A board functions best when it focuses on higher-level, future-oriented matters of strategy and policy, and performs its oversight responsibilities in a rigorous but highly effective manner.

Things are not always easy in the private sector. However, there is a clear demarcation of roles and responsibilities. The appointment of a CEO is based purely on competency, with no political interference, and therefore it becomes a matter of whether as the CEO, you have met the objectives as set out in your performance contract.

A lot has been happening lately with regards to parastatals in Namibia. However, what is reported in the media is not always a true reflection of what is happening on the ground. The media, therefore, also has a bigger responsibility to make sure that whatever it is that they report on is done in a responsible manner, with the primary role to inform the public and Namibians at large of the true facts surrounding any matter. Media practitioners have been and are continuing to be used as pawns by disgruntled employees in the public sector to bring down MD’s and board members alike, and that is a practice that should cease to exist. I am however comforted by the fact that Namibia has a relatively mature media fraternity that is steadfast and sticks to the facts, and we should compliment them.

Any other remarks on the MMI Holdings Namibia, going forward? 
The merger is behind us technically, and now we are geared for growth and ensuring that our customers get the best from the MMI Holdings Namibia Group. We continue to ensure that we put the client at the centre. We would like to thank our clients who have been loyal to our brands, and want to assure them that we will continue to strive to give them the best in being their preferred financial wellness partner.

The best is yet to come, as the entrepreneurial and collaborative culture in our DNA will deliver transformation in the financial services’ sector, and through our client- facing brands will continue to focus on projects which meet the national goals.