Using insurance to uplift our municipalities

27 June 2018 Sharon Mackay Sikhosana, Lion of Africa Insurance

Over the past few weeks a plethora of articles have appeared in the media about the dire situation so many municipalities find themselves in. Challenges faced by municipalities are well documented and include issues such as irregular expenditure, lack of appropriate skills, non-compliance with key legislation, inability to collect debt, as well as shortcomings in the development and maintenance of infrastructure, to mention a few.

Lion of Africa, as one of the biggest insurers of municipalities in South Africa, we are increasingly being asked whether sustainably providing insurance services to municipalities will be possible in future given all the challenges they face. Our answer is a resounding yes. Insurers wanting to conduct business with municipalities and state owned entities don’t only have to ask themselves whether they can provide the right insurance products to protect the insurable interests of their clients. They need to ask themselves “How can we assist this public entity to meet their objectives through the insurance services we provide them with?”

After 24 years of democracy, South Africa remains one of the most unequal societies in the world, where too many people live in abject poverty and few are gainfully employed. As businesses operating in South Africa, we cannot remove ourselves from the vision of the society we are wanting to build which is articulated in our National Development Plan. As the Lion of Africa, we are asking ourselves some the following questions:

• What can we do to encourage leadership at our public entities so that we can work together and solve problems? Do we as the Lion have the right leaders who can engage with public entities to solve problems?
• What can we do to meaningfully support skills development at our public entities?
• How can we build relationships with our public entities to strengthen development, democracy and accountability?
• What is our contribution to building a capable and developmental state?
• How do we unite insurers and public entities so that we all realise that we are dependent on each other for the achievement of mutual prosperity?

Some of the solutions we have proposed at Lion of Africa is to help improve the understanding of how insurance works at public entities. To this end our employees are expressly encouraged to work on SME broker development in the public sector space. This has resulted in successful projects for example where issues of under insurance have been tackled.

At the Lion we are constantly questioning our role as corporate citizens because we realise that it is not only good for society, it is also good for our business.

While we do not profess to have all the answers, we believe our success in the municipal short term insurance market thus far can be accredited to our courage to serve the municipal market through innovation where few competitors have dared to operate.

We are a business which always aims to be profitable and understand that our growth cannot happen sustainably in an environment where unemployment levels are rising and income disparities are increasing, and we are committed to doing our part in uplifting our country.

Quick Polls


Financial behaviour experts suggest that today’s risk modelling methodologies ignore your client’s emotional ability / behavioural capacity. What are your thoughts on spicing up risk profiling tools to make allowance for your client’s financial behaviours


[a] Bring it on; my client’s make too many irrational financial decisions
[b] Existing risk profiling tools are adequate
[c] Risk profiling tools should be based on the model / rational client
[d] The perfect risk profiling tool is science fiction
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