BEE careful?

“Although procurement includes all spend on goods and services, the biggest spend in the short term insurance industry lies with claims and therefore also represents the biggest challenge”, says Keith Kennedy, executive GM of claims, at Mutual & Federal.

“There are currently just not enough claims suppliers available that are BEE compliant.

"The challenge therefore,” he says, “is to source more of these suppliers and encourage non-compliant suppliers to move towards a BEE accredited status.”

Note:

In terms of the Financial Sector Charter, financial institutions have committed to the implementation of a targeted procurement strategy aimed at enhancing BEE.

The target for the value of all procurement from BEE accredited companies was set at 50% by 2008 and at 70% by 2014.

In addition, financial institutions need to provide support to small and medium black enterprises (SMEs) to enable them to benefit from these procurement programmes, and to promote early payment for services rendered.

Mutual & Federal spends around R4bn on claims annually, of which one third is spent on the actual replacement of commodities, says Kennedy, and this is where the need for suppliers comes in.

“Mutual & Federal's motor book takes up a huge component of its claims spend. Again, the challenge lies in finding BEE compliant suppliers within these specialist areas,” says Kennedy.

Over and above the sourcing of compliant suppliers, the insurer also has to uphold excellent service and quality. “Policy holders expect the best and they deserve the best,” says Kennedy.

“Therefore, although we fully support the Financial Sector Charter, we need to do so responsibly without compromising the quality of the products and services we offer.

“Having a motor vehicle claim can be a traumatic experience for a policyholder and we must ensure that the repair process is absolutely painless.

Kennedy warns however, that the fears of traditional suppliers need to be taken into consideration.

“Many of them believe that if they are not compliant, they will lose their work, which means a loss of livelihood.”

It’s also important to note that the suppliers of the short-term insurance industry operate within the medium to smaller sectors of the economy which means that many of our suppliers are owner managed.

“So, while on the one hand it’s not easy to source compliant suppliers, we know that when we do, we are making a real difference,” he says.