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  MEETING CUSTOMER NEEDS

As a business we understand that our success hinges on our ability to understand and meet the diverse financial needs of over four million customers. Old Mutual serves what is probably the most diverse customer base of all life assurers in South Africa and our clients are found in all economically viable segments of the market.

Their changing priorities differ and by engaging our customers through personal interactions and market research we have been able to develop and build unique value propositions intended to meet the wealth accumulation and protection needs of different customer groups.

We’ve segmented our market according to monthly household income. Our Private Wealth business looks after high-income customers. Personal Finance serves middle-income customers, while Growing Aspirations focuses on the emerging middle-income segment. Group Schemes operates in the low-income market.

Whether it is through scientific market research, or drawing qualitative insights into customer requirements, constant dialogue informs a host of initiatives. We test new products for fit against customer needs and regularly track our brand performance before feeding results back into the product and distribution businesses to inform strategy development.		  
         
 
 

  
New initiatives in 2002 included:
The formation of our high-income offering, Fairbairn Capital, that unites two of Old Mutual’s investment businesses, viz. Investment Frontiers and Galaxy Portfolio Services.
The introduction of a savings component to the world-leading Greenlight life and disability product.
In August, an international version of Investment Frontiers was launched for South Africans wishing to increase their exposure to international assets.
Old Mutual Healthcare launched its flexible Oxygen medical scheme that incorporates nine benefit options and Oxygen Levels — an innovative programme that rewards members for achieving their own fitness and health goals.
The formation of Old Mutual Bank following the merger with Nedcor’s Permanent Bank brings together the benefits of banking and life assurance for our clients and was a further step in the implementation of our bancassurance strategy.
Old Mutual Unit Trusts brought Four Plus to the market. This product allows the average investor to put discretionary income to work through an affordable, flexible, liquid and understandable investment vehicle.
As a consequence of the merger last year between Nedcor and the Board of Executors Limited (BoE), Old Mutual acquired 100% of the multimanager businesses from the two banks and incorporated them into SYmmETRY Multimanager Portfolios, part of Old Mutual Employee Benefits. This further enhances the group’s multimanager offering.
Following the acquisition of BoE by Nedcor, Old Mutual
acquired 50% of the high net worth businesses of BoE
and Nedcor.
 
         
     
 
Four Plus Greenlight Fairbairn Capital Oxygen
 
     
         
    HOW CUSTOMERS RATE THE OLD MUTUAL BRAND

In the independently conducted Markinor survey (Brand Old Brand New 2002), aimed at assessing consumers’ perceptions of well-known South African brands, 63% of respondents voiced “a great deal” of trust and confidence in Old Mutual. The closest competitor scored 55%.

Old Mutual’s performance in 2002 represents a slight improvement on the positive association of 62% recorded in the previous year’s survey.

The results achieved in the Markinor survey are consistent with those reflected in a similar survey conducted on Old Mutual’s behalf by Kaufman, Levin and Associates (KLA). The latter measures consumer trust in specific brands. In terms of Old Mutual’s commitment to South Africa, 72% of respondents associate Old Mutual with being “involved in the community”, and 68% confirmed that Old Mutual “believes in the future of South Africa”. Both represent a slight increase on the 2001 measurement.		  
         
 

Jerry van Niekerk, Executive General Manager of Old Mutual Client Services.		  

General Manager of Old Mutual Client Services, Heloise van der Mescht (standing), in the Client Services Centre at Mutualpark.		  
         
    CUSTOMER SERVICE

Siyakhula, an ambitious project involving all of our employees in co-creating a refreshed vision and value system for the company, has maintained momentum. This internal transformation programme, embarked on in 2001, committed the company to, amongst others, world-class standards of client service.

Feedback from the process indicated that staff felt the company was falling short on service delivery. Specific criticism included a one-size-fits-all approach, too strong a focus on product, multiple points of client entry that created confusion, and limited structures for rewarding excellent service.

In last year’s report we undertook to:
Consolidate the company’s various service capabilities into a new customer relationship management structure.
Develop a “one response” call centre to replace multiple centres in different lines of business.
Enable customers to evaluate their portfolios and view performance on-line.
Ensure objective non-financial measurement of customer care.

 
 

MD’S AWARD FOR SERVICE EXCELLENCE
Last year we implemented the second cycle of our Managing Director’s Award for Service Excellence, and introduced the Old Mutual Green Card that extends recognition of service excellence across Old Mutual. Green Cards are issued to staff members who have provided excellent customer service, on the recommendation of fellow employees or customers. Winners of the MD’s Award attend the Disney Service Institute. 		  We have made significant progress in addressing these issues, not least with the launch of Old Mutual Client Services in January 2002 that saw the consolidation and integration of key service capabilities. All employees of the new unit were involved in co-creating a shared vision intended to build commitment to non-negotiable service standards and service accountability.

The focus for 2003 will be to deliver on the service vision. An early delivery under the service strategy programme was the launch of a “one response” call centre for intermediaries.

We will also continue building Old Mutual’s service culture in 2003. To this end, a unifying service theme — Service, make it a life experience (Smile) — and standards have been rolled out across Old Mutual.

Customer service satisfaction in 2002
Old Mutual engages external survey companies to provide objective feedback on customer service on a bi-annual basis. In 2002, customers rated our responsiveness at a 75% satisfaction level, with reliability at 76% and efficiency at 80%.

Internal service measures
2003 sees the implementation of a Quality Service Index. This internal measure of service responsiveness, reliability and efficiency will be consolidated at an OMSA level. We will report on it in the next Corporate Citizenship Report.
Customer retention is another indicator of client satisfaction with standards of service. In this area, our position weakened during 2002 when the retention rate declined from 63% in 2001 to 62%. The economic climate was a major contributing factor with high interest rates impacting negatively on people’s ability to save. Our target for 2003 is 65%.
 
         
    CONSUMER PROTECTION

There have been a number of changes to the legal and regulatory environment in which OMSA operates. Many of these are intended to protect consumers against unscrupulous practices and are welcomed.

Over the past year, we have placed significant emphasis on the formal and structured monitoring of compliance with legal and regulatory requirements. OMSA has appointed a full-time compliance officer, and successfully implemented systems and processes across the business units to ensure compliance with the Policyholder Protection Rules (PPR), promulgated under the Long-term Insurance Act in July 2001.
  		 
 
The first winners of the MD’s award for service excellence, en route to the Disney Service Institute. 		  These rules require disclosure of, amongst others, product details, costs and commissions, guarantees, benefit illustrations and rights to cancel. The PPR also introduced accreditation procedures for intermediaries, whether tied agents or independent brokers.

The Financial Advisory and Intermediary Services Act was passed in November last year. It incorporates a system of registration and licensing for anyone who sells or advises on financial products related to banks, stockbrokers, pension funds, life assurers, short term insurers, unit trusts, linked product providers and medical schemes. Old Mutual has applied for accreditation on behalf of its tied agents.

Old Mutual will also be impacted by Financial Intelligence Centre (FIC) legislation that seeks to deal with money laundering. Our view is that this brings South Africa in line with international practices designed to prevent the flow of monetary gain from criminal activity through the formal financial system.

Given the 30% increase in complaints against the industry being dealt with by the office of the Life Assurance Ombudsman, we have taken significant additional steps to enhance the effectiveness of our complaints resolution process. These include the development of an integrated client services capability, and the appointment of an internal ombudsman with a mandate to impartially resolve complaints based on fairness and good industry practice — an approach being pioneered by Old Mutual. Last year, the increase in complaints was 13% over 2001.
  
         
 

This advertisement forms part of Old Mutual’s campaign to trace owners of unclaimed shares due to them as a result of Old Mutual’s demutualisation. 		  UNCLAIMED SHARES TRUST

At the time of Old Mutual’s demutualisation, qualifying members of the Society were required to confirm their particulars with Old Mutual in order to claim their free shares. The shares of those members who had not confirmed their particulars by the time of listing in 1999 were placed in the Unclaimed Shares Trust (UST).

The Demutualisation Scheme and Trust Deed requires that trustees use their best endeavours to encourage members to confirm their particulars and claim their shares. In terms of the scheme, five years after listing (July 2004), the trustees are obliged to give notice of their intention to sell all the unclaimed shares, in which case members will forfeit their right to the shares, dividends and interest on dividends. The proceeds of the sale of these shares will accrue to Old Mutual plc. However, much is being done to ensure that the owners of unclaimed shares are traced prior to the five-year expiry period.

At the time of demutualisation, there were 584 000 unconfirmed shareholders representing 300 million shares. By the end of December 2002, the number of unconfirmed shareholders had fallen by 45% to 320 000, while the number of unclaimed shares had declined by 61% to 116 million. This represents 3% of Old Mutual plc’s share capital.

In the 12 months to December 2002, 36 000 shareholders were confirmed, releasing 15 million shares from the UST. Initiatives undertaken during 2002 to trace owners of unclaimed shares included:
An update of address details against external and internal databases, followed by two mailings to around 200 000 members. The mailings were supported by advertisements on African language and community radio stations. Awareness interviews were conducted on a number of national and regional radio stations.
An outbound telephone campaign was launched, and print advertising and editorial was published in a wide variety of publications.
Posters were distributed to all Old Mutual branches and announcements were made on all government employee payslips. Notices were also placed on Old Mutual websites.
Presentations were made to a number of trade union groups and fact sheets provided to the business units for use in creating awareness.
 
Based on a review of the results achieved last year, we have decided to focus resources on initiatives that offer the prospect of direct contact with the clients. These have delivered the best results so far in the drive to trace the remaining unconfirmed shareholders. 		 
         
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