Our economic impact

Recreating the Old Mutual brand experience

In response to research and survey findings of the last two years, specific action was introduced in 2004 and continued in 2005 to ensure the Old Mutual (SA) brand retains its relevance in an evolving South Africa. This is despite Old Mutual Life Assurance Company of South Africa (OMLACSA) improving its lead among insurance companies in the Sunday Times-Markinor Top Brands survey in 2005.

Building on the 2004 branding initiative, which was to reflect a company that people can relate to, and a company that people can believe in, Old Mutual (SA) in 2005 implemented the Simple Solutions for Success business philosophy.

This recognises the changing marketplace and the need for a new marketing approach. It accepts that markets are becoming younger, and that customers need products and services that enable them to reach their objectives faster than in the past. Also, the market demand is for a simpler approach to financial planning.

A new visual identity has an internal and an external impact. Externally, it signals to clients that there is change afoot in the company, and that Old Mutual (SA) recognises it has to embrace new realities. Internally, it signals to employees that Old Mutual (SA) is part of a larger group as the brand approach more closely aligns the local entity with the international Group businesses.

Customer service is key to the company brand-building exercise. Overall, the company has made progress in addressing customer service shortcomings identified in previous independent studies, but more remains to be done. The graph alongside, compiled by an independent survey company, shows the customer service performance of Old Mutual (SA) versus the financial services sector.

Customer satisfaction:
Old Mutual (SA) and the South African financial services industry

While the service challenge is being taken up and driven at executive management level, each business unit is also responsible for improving customer services through its own initiatives.

The Retail business segment has created CORE, a philosophy aimed at reducing complexity and deepening relationships with clients by seeking, among other things, to improve knowledge of what customers want, and to exceed their expectations. The segment has, for instance, commissioned research on the cost of lobola and marriage in more traditional and rural areas and has shared this research with all interested parties through the media.

The company’s corporate business initiative Winning In Front Of Clients seeks to create a streamlined distribution model so that clients enjoy one entry point into the entire range of Old Mutual (SA) corporate products. It also seeks to harness the various corporate services to add customer value. The initiative has seen the whole corporate business reduced into three client-facing segments, each with its own head. The first relates to large business clients, the second deals with government and parastatals, and the third specialises in meeting the needs of small and medium enterprises. Each business head takes responsibility for sales and customer services and is supported by a range of experts, key account managers, and the rest of the sales force.

The business segment that “owns” and coordinates customer services, Old Mutual Services, Technology and Administration (OMSTA), under Deputy Managing Director Peter de Beyer, has spent the larger part of 2005 contributing to the overall Old Mutual (SA) brand experience by building on previous years’ learning. A key customer service challenge is to create a sense of “ownership of and responsiveness” to customer service issues. In particular, the customer service divisions throughout Old Mutual (SA) have identified as a continuing weakness the time taken to resolve queries and complaints, while other past problems, such as the quality of problem resolution, have been converted to strengths due to tailored interventions. Customer service dissatisfaction decreased by 3% to 6% in 2005.

The following comparative diagram demonstrates Old Mutual (SA)’s service performance against customer expectations over the last two years using a SWOT analysis.

A key thrust in the customer service turnaround has been the Old Mutual Service, Technology and Administration (OMSTA) Solution Transition.

Using LEAN principals from the manufacturing environment, this significant investment in building service excellence aims to create a process-based approach to client service. This means reducing costs, improving customer satisfaction, and seeking to energise and transform a customer-facing organisation.

The customer service challenge is not only met by improving internal processes. OMSTA has also been upgrading Old Mutual Client Service Centres across the country, recognising the importance of these centres which provide a physical site for the interface between the company and customers. Old Mutual (SA) currently employs approximately 510 customer service experts at 99 service centres around the country, at which an estimated 150 000 customer services transactions are completed monthly.

Another service dimension – the work of the Internal Ombudsman

In 2005, the Old Mutual (SA) Internal Ombudsman, an internal appointment made as part of a wider initiative to improve the resolution of client issues, received a total of 3 334 complaints from policyholders.

Most cases were resolved through internal administrative processes. Of the overall complaints received, 320 cases required adjudication. Of the cases adjudicated, 86 (26.8%) were found to be in favour of the client by the Internal Ombudsman.

During the same period, 244 Old Mutual (SA) matters were finalised by the Ombudsman for Long-term Insurance and of those 93 (38%) were resolved in favour of the client. This figure compares with the 42% found in favour of the client by that office for the industry as a whole.

The Unclaimed Shares Trust

When Old Mutual demutualised at the beginning of 1999, it awarded free shares to all qualifying policyholders who held policies at midnight on 25 September 1998.

Approximately 3.2 million policyholders were allocated free shares. To claim the shares, eligible policyholders were required to confirm their personal details with Old Mutual.

At the time of the company’s listing, Old Mutual had successfully traced and transferred free shares to about 2.6 million shareholders. To protect the interests of shareholders who had not claimed their shares by the time Old Mutual listed, trusts were registered in the five countries in which the company listed.

In accordance with the demutualisation scheme, policyholders were entitled to submit claims for confirmation for a period of five years and 30 days, whereafter the trust would be closed for new confirmation applications and policyholders would thus lose their rights to claim their free shares. The trust was closed on 21 August 2004.

However, to enable the company to extend the period, the directors of Old Mutual plc sought and received approvals from shareholders and the UK courts to establish new trusts in the various territories so that they could continue their tracing efforts and accept confirmations for a further two-year period. The new trust will close on 31 August 2006.

Since listing, and in order to find shareholders, Old Mutual has:

• advertised extensively on radio stations and in the press throughout South Africa;
   
• distributed hundreds of thousands of brochures in the main official languages;
   
• conducted roadshows in communities, at clinics, schools and community centres;
   
• briefed field sales staff who have daily contact with policyholders and have been on the alert to assist in finding shareholders;
   
• conducted presentations to groups like trade unions and various government groups, including Parliament;
   
• contracted tracing agents; and
   
• undertaken tactical campaigns, such as mining updated databases in the wake of recent legislation.

As at the end of December 2005, there were 65.9 million shares remaining in the trust. It is expected that relevant decisions regarding these shares and their future use will be made shortly.

Serving our customers

Serving society and South Africa