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Uncertainty follows Mutual & Federal resignations

02 October 2013 Jonathan Faurie
Jonathan Faurie, FAnews Online Journalist

Jonathan Faurie, FAnews Online Journalist

Following the high profile resignation of Peter Todd in June, the steady ship which was once Mutual & Federal does not seem to be as steady anymore as the company had to come to terms with the resignations of Caroline da Silva, Vuyo Lee, LeRoy Munetsi and Kevin Wright, all of who held important positions at the company.

 

While Mutual & Federal is still regarded as one of the largest insurers in the country, the resignations had led many to question if all is well at the company. This is a particular area of concern for brokers who have a lot of vested interest in the company and rely on its stability to sell its products.

Losing out to competitors

After the company announced Todd's resignation on 10 June, it announced that Raimund Snyders would be taking over as CEO after Todd's departure. And he certainly has not had an easy introduction into his new position. Since his appointment he has had to deal with the resignations of Da Silva, Lee, Munetsi and Wright.

Shortly after Da Silva left Mutual and Federal, it was announced that Da Silva would be joining the Financial Services Board as their head of Financial Advisory and Intermediary Services (FAIS).

It was widely reported that Munetsi and Lee would be leaving the company at the end of September and would be taking up other roles within the insurance industry. The resignation of Munetsi does not come at the best time for Mutual & Federal as the company was in the process of implementing a R5 million African expansion strategy which Munetsi would have headed up.

It is widely reported that Munetsi would be joining Telesure and Lee would reportedly be joining Momentum/MMI Holdings. While Telesure has confirmed the appointment of Munetsi, there has been no confirmation on the appointment on Lee.

Yesterday, it was announced that Wright would be leaving the company on 31 December and that he would be relocating to Cape Town early in 2014.

Wright served as the company's Operations Executive where he made many significant contributions to the organisation which included the implementation of a new Commercial IT system. It may not be a coincidence that Wright's move to Cape Town coincides with the desire of Santam to implement a similar system.

But Snyders assures the FAnews that all is well at the company and that the resignations, while regrettable, are due to better offers to further their careers. "The recent top level resignations are unrelated to each other or company developments; they are the result of executives having been offered career opportunities by other financial services companies,” says Snyders.

Are uncertain times ahead?

When Snyders addressed the media at the official announcement of his appointment as CEO, he was quick to point out that the company has a proud history and has survived both World Wars and both Anglo Boer Wars. This was built on a solid foundation of customer excellence and was driven by leadership which had the capability to offer its brokers and customers a sense of service excellence and stability which has seen the company become synonymous with short-term insurance in the country.

However, one has to question how long this faith in the company can continue given the current resignations, which have all happened in a short space of time. After Todd's resignation, Da Silva resigned on 24 June, Munetsi and Lee somewhere around 9 September and now Wright on 1 October.

This has led to a certain level of uncertainty among the broker community who form a vital part of the company's business model as it is a broker based model. Many brokers have expressed their concerns to the FAnews and there are rumours in the industry that brokers are cancelling their books with the company.

Snyders denies this saying that the business which the company has lost is a result of changing premiums or because of normal business reasons and nothing else.

"We acknowledge that these changes could be concerning for some of our brokers, but we would like to reassure them and our customers that Mutual & Federal remains committed to serving them, and that we have a very strong and experienced management team in place to continue looking after the interests of our customers and brokers. As we speak, we are engaging with brokers from all of our sales regions on a face-to-face basis at our road shows, and having conversations with them about the direction of our business. So far, we have received incredible support and well-wishes from our brokers and appreciate the loyalty they have shown to Mutual & Federal,” says Snyders.

The road ahead

Because of Mutual & Federals reputation, there is a lot of expectation on the company not only from brokers but from its clients and potential clients who look for stability in a company that is trying to come to terms with the changing economic environment post 2009 global financial crisis. How does Mutual & Federal hope to achieve this?

"Just like our current brand campaign slogan of turning our customers' setbacks into comebacks, we are equally committed to turning our business back to profitability and living up to our fullest potential as Mutual & Federal. Our people are committed to this part of our journey which will involve continuing to put the customer at the centre of everything that we do. We look forward to strengthening our position as a leading short-term insurance brand and expanding our capability in the Rest of Africa, where we will work with Old Mutual to expand our footprint.”

"Our heritage will stand us in good stead during this time, we have seen challenging environments before, and we have come out stronger as we continued to remain focused on delivering value to our customers, their advisers, our shareholders and our staff,” says Snyders.

Editor's Thoughts:
Snyders has assured us that all is well at Mutual & Federal and that the company is merely in the midst of a significantly challenging period. He has also given his vision on how the company will overcome this. Under new leadership (mainly from the life industry) in several divisions and at the helm of the company, broker support will remain crucial in order for the company to prosper – do you believe that the company will be able to achieve the vision that Snyders believes is achievable? Please comment below, interact with us on Twitter at @fanews_online or email me your thoughtsjonathan@fanews.co.za.

Comments

Added by Derek Twiss, 05 Oct 2013
I agree with Mielies -- why are all these Long Term Ins and Banking people being brought in to try and run a huge Short Term co. like M&F I have been in the short term industry for 45years and I am still learning -- and I am not a CEO ??????
I can only see more trouble ahead !!!!! Already the service is lacking in a number of areas especially the claims recoveries and legal dept M&F are renowned for trying to "fix things that ain"t broke"
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Added by Mpho Pule, 03 Oct 2013
Stories like these really tear my heart. I owe my well-being in the insurance industry to a reputable M&F. I can only hope that they will push this aside and continue being one of the best brands of our short-term industry. Good luck to the board and senior management team of M&F.
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Added by Lalie, 03 Oct 2013
Yes, no one is denying that M&F is facing a very challenging time, but they have been here before a couple of years ago with the Royal Baf**eng sale/non-sale, and they are still standing. How about supporting the company that we have been in partnership for so long, it could only be to the advantage of ourselves and our clients!!!! If you don't have any value to add, stop bad-mouthing the most trusted brand in the industry in South Africa, as voted by the consumer.
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Added by JAKKIE, 02 Oct 2013
Brokers unless you are stupid, read the direction off the "wind" smell the "s...."
Start to move cleints.
Or you may end up the looser.
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Added by Andrea, 02 Oct 2013
M & F are going downhill in my opinion, especially on the Personal lines section. Lack of educated staff working at the call centre, rating problems, and continuos changes and 'projects'. You can never speak to the person in charge of these ridiculous decisions and there is no one to justify or give a decent explanation. Policies are going to be moved rapidly.
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Added by Mielies, 02 Oct 2013
And what is it with all the Old Mutual and Nedbank appointments within M&F? We are sitting with new M&F management with not a lot of Short Term Experience. Please explain that to us brokers Mr Snyders. Also why are your Broker Consultants visiting end of the line clients/ insureds together with your Old Mutual Consultants that now want to sell Short Terms but as they have no clue and no experience now they take up the time of the M&F Broker Consultants supposed to service real brokers. O and best of all is that most of the M&F Consultants still have not written RE exams as they are not advising the end consumer...or are they?
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