Keeping the Momentum going

FAnews spoke to Nicolaas Kruger, CEO of the Momentum Group, about the state of the industry and his vision for the future.

Nicolaas Kruger started his career at Momentum in 1991 and qualified as an actuary in 1992. His rise within the organisation was impressive. In 1997, he became the chief actuary, and following a number of years in this role, he was appointed as CEO of Momentum's group business (healthcare and employee benefits), a position he held for two years before being appointed as Chief Financial Officer of Momentum Group in 2007.

In January this year, at a very difficult time in the financial cycle, Nicolaas took over the reigns as CEO of Momentum Group.

Trying times

"We are experiencing the worst recession of many decades. The negative economic conditions have resulted in pressure on the disposable income of consumers, in turn resulting in slower new business growth and deteriorating persistency," notes Nicolaas. "Equity values have reduced dramatically, leading to a decline in the fees that insurers and financial advisers derive from the assets under management. Although there are signs of a recovery, the ability to manage the impact of the financial crisis remains our biggest challenge."

In addition, says Nicolaas, there are growing challenges in terms of the environment and crime, among other risks affecting all companies Nicolaas says "I believe these risks to be very real and that we should personally, and as a company, be involved in finding solutions to reduce the risks. Momentum has started with a few initiatives, for example, the retrofitting of the lights in our head office, which will achieve a significant energy saving. To assist in curbing crime in the vicinity of Momentum's head office, we have donated a number of bicycles to the South African Police force to patrol the area, especially during the Gautrain construction period."

Industry insight

"In addition to the impact of the global financial crisis, South Africa has its own unique challenges," comments Nicolaas. "We have to comply with increasing regulatory changes and need to ensure that an appropriate balance is struck between protecting consumers and leaving sufficient room for companies to innovate. The envisaged National Health Insurance and Social Security Reform are good examples where financial services companies should play a constructive and supportive role, to assist government in developing solutions to achieve the goal of increasing access to healthcare and financial services products in South Africa.

"A shortage of skills, due to the complexity of the financial services industry, remains a challenge in South Africa. There is a great demand for specialist and managerial skills. The ability to attract and retain the right people therefore remains a key priority for Momentum."

In terms of the negative consumer perceptions surrounding the industry, Nicolaas says that change can only be achieved from within the industry. "Perceptions of the industry depend on the experience of it. At Momentum, we accept responsibility to make sure that all our clients always have a positive experience when interacting with the company. Such a positive experience goes beyond providing excellent service, and should extend to providing appropriate products that are relevant for the consumer and offer good value for money. In addition to this, products have to adapt to the changing environment and changing needs of the consumer. We should encourage clients to retain and increase their savings and life insurance products so that they benefit from saving sufficiently and have adequate protection."

Positioning Momentum

Nicolaas describes Momentum as a company with a long history, achieving its growth through a combination of acquisitions and organic growth. "During our growth path a dynamic culture emerged, which is now one of our key differentiators. What I enjoy most about working for this company is the fact that Momentum has an informal environment where motivated people with a positive attitude can truly make a success of life.

"For Momentum employees, I think the culture that exists in Momentum sets us apart from other typical financial corporates. We have a flat management structure, are much less formal than other companies, we value the individuality and contributions of all our employees and our management is very accessible."

Priorities for the future

"I want to see Momentum grow from a successful organisation to a significant one. To achieve this goal we have to make significant progress in implementing our core strategy. There are a number of key focus areas," explains Nicolaas.

"We want to further entrench a values-based culture throughout the entire organisation. Our values determined through a consultation process with employees are innovation, awesome service, integrity, accountability, teamwork and growing people.

"In addition, we need to strive to a leadership position in the market in all our product houses, through the provision of innovative and value-adding products. We are committed to build a much stronger brand for Momentum.

"Momentum also needs to proactively engage our clients and intermediaries, particularly in the current challenging economic environment. We intend to build on our successful historical partnerships with financial advisers, which have always been key to our strategy."

Engaging brokers

Nicolaas emphasises that meaningful relationships with financial advisers have always been part of Momentum’s DNA. "We cannot take our relationships for granted and need to earn the respect from intermediaries. We believe that we should support our strong relationships with product and process innovation, and in particular, service excellence. This enables financial advisers to serve their clients better."

Facing the challenges

Less than a year at the helm, Nicolaas has relished both the challenges and opportunities of leading Momentum into the future. "The fact that the buck stops with me has been something new to get used to," says Nicolaas. "However, I am fortunate to be surrounded by an exceptionally talented team of people that provide tremendous support.

"I particularly enjoy and appreciate having the opportunity to build on Momentum’s successes of the past years and to take the organisation to the next level. I have been with Momentum for a very long time and it has become a large part of my life. Growth for the company and taking it from strength to strength is not just a business imperative, but a personal goal as well."

Up close and personal

One person you would love to have lunch with: Barack Obama.

What keeps you awake at night? I am fortunate that I have the support of a very experienced and knowledgeable management team, so I sleep very well at night.

Your favourite holiday spot? Plettenberg Bay.

What are you reading at the moment? Crucial conversations by Stephan Covey. I also enjoy magazines like Landbou Weekblad and Weg.

How do you stay up to date? I read local publications like Business Day and Financial Mail, and The London Financial Times for an international perspective.

Your favourite music? Everything from pop music (dating back to the 1980’s when I was in high school) to classical music.

Your pet hate? Being late for an appointment.

Your life philosophy? Aligned with the Momentum philosophy, "Believing in people who believe in themselves".