Former finance minister Trevor Manuel said this week that, in the context of nation-building, local firms do too little.
“In the late 1980s and early 1990s, when apartheid became such a threat to all South Africans, people had conversations about how to be better. After the first elections and after we adopted the Constitution, people said that ‘it was behind us’, but you can’t deal with things like that. This industry needs to be much better,” he said during a presentation at the Insurance Institute of SA’s Insurance Conference at Sun City.
Since Manuel left government in 2014, he has joined a number of corporate boards, is chair of Old Mutual, is a nonexecutive director of SABMiller and is deputy chair of Rothschild SA.
“If the industry remains as it was, it will not be able to face up to the challenges of the future. The future is very different, the risks are very different and the opportunities are very different ... The industry needs to drive change by leading change,” Manuel said.
“Don’t wait for the mining industry, the construction industry; they have their own problems. Don’t wait for the banks. I think the insurance industry can lead by example.”
He said corruption needed to be dealt with.
“One of the problems in South Africa is that there aren’t consequences. A driver knocks down people – kills them – no consequences. You are a public servant or political office bearer and involved in corruption – no consequences.
“Too few things attach consequences in our country and we have lost self-respect. I think it finds resonance throughout industry and throughout our current experience.
“We can’t tolerate it; we need to deal with it. Root out it. Every aspect of it needs to be rooted out,” he added.
“We need to strengthen the criminal justice system in this country.”
On the transformation front, Reshma Sheoraj, director of insurance at National Treasury’s financial sector policy unit, said transforming the financial sector was an important part of government’s aim to reduce societal imbalances.
“Transformation is at the heart of South Africa’s story. It reflects our collective desire to correct the injustices of the past and the desire to ensure a sustainable future. It is about the road ahead as much as the road behind us. Transformation is inexplicitly linked to inequality. South Africa has one of the most unequal societies in the world,” Sheoraj said.
“Transformation is a way to reduce ... Because of the deep scars of the past, inequality is closely related to gender and race. We need to be frank about the pace of transformation in the short-term insurance sector ... I hear from some insurers about the difficulty of appointing [black] executives.
“The pace of change is very slow and is indeed not reflective of the realities of South Africa. National Treasury has spoken about the very same issue on numerous occasions,” Sheoraj added.
“We have yet to see any concrete plans to tackle these issues. We need material change in the sector’s procurement practices ... I can stress the importance of a team with a diverse set of skills and backgrounds,” she said.
David Harpur, the CEO of the Insurance Institute of SA, said transformation was a process.
“I don’t think you can just press a button. At lower levels, the insurance sector is quite transformed, but this is working through to the senior levels. There is awareness in the industry of the need for transformation,” Harpur said.