The first half of 2020 was an unprecedented period with unforeseeable events ranging from a global pandemic and recession, national and international civil unrest and natural disasters – a “perfect storm”. The COVID-19 pandemic has had a material impact on individuals, societies, families, businesses and countries, in what has become known as the Great Lockdown Crisis. These were the opening words of Chairman, Professor Piet Delport, at AVBOB’s 69th AGM which took place on 18 November 2020 and during which the Society’s financial results for the 2019/2020 financial year were presented. The event was held with a limited number of attendees at the ContinuitySA premises in Midrand, in adherence with current COVID-19 regulations, and online.
Solid organic results
In spite of the challenges experienced, AVBOB delivered solid organic results, mostly due to its rapid and extensive responses to the COVID-19 pandemic. “We focused on customer and employee satisfaction, expanded digitisation, and introduced new innovative services. In these challenging times, AVBOB continues to enhance its initiatives to meet the needs of its members at the most affordable cost possible,” Delport said.
He also attributed the Society’s solid results and growth, in a very difficult economic and operational environment, to its strong leadership.
Because AVBOB is a mutual it takes its role as a corporate citizen to heart. “As a mutual society, we recognise and accept the responsibility to ensure that our activities and operations remain beneficial to our AVBOB family and the communities in which we operate,” Delport explained. He further noted that the Society’s unique mutual model, which has been used successfully for more than 102 years, creates tangible economic wealth and benefits for their members, of which 80% are from previously disadvantaged backgrounds.
In addition to the special bonuses that the Society has declared over the years they have also implemented flexible premium payment terms to assist their policyholders during these trying times. Delport, however noted that the free funeral benefits*, provided by AVBOB Funeral Service, remains their biggest commitment to their members. Furthermore, the Society’s CSI initiatives have improved the lives of a number of individuals in a tangible way.
AVBOB CEO, Carl van der Riet, who has been leading the Group for just under a year, has done a remarkable job in tackling the challenges that have been exacerbated by the COVID-19 pandemic. “The 2020 financial year has been one of the most memorable and challenging in recent history. The year started strong, but the overall performance was overshadowed by the impact of the COVID-19 pandemic in the last quarter,” he stated.
COVID-19 created unprecedented challenges for the business but, conversely, also presented the Group with opportunities to demonstrate the real value it can contribute as a business to its customers and to society. “Our impact confirms yet again the relevance of what we do and our purpose and place in society,” Van der Riet said.
The CEO announced that “despite the difficult operating environment, the Group generated a profit before transfer to policyholder liabilities of R1.2 billion for the year, and this full amount was set aside for the future enhancement of member benefits.” Van der Riet also noted that the Group paid R184 million to their members in respect of their AVBOB Reward Accounts.
According to Van der Riet, the Group also heeded the call by President Ramaphosa for donations to the Solidarity Fund established to mitigate the impact of the COVID-19 pandemic and provide Personal Protective Equipment (PPE) to frontline health workers. “I am humbled by the voluntary contributions from staff which, together with a contribution by the Group, amounted to R4.7 million,” he said.
Van der Riet also made mention of the Group’s well-deserved accolades in a number of areas. The Society was voted the winner of the Funeral Cover category in the 2020/21 Ask Afrika Kasi Star Brands Survey for the third consecutive year in the Township Brands Survey and the winner of the Funeral Cover category in the Ask Afrika Icon Brands Survey for the fifth year.
Van der Riet closed with positive sentiments and noted that even though the world has changed significantly since the Group’s inception in 1918 “the pressure to evolve in order to remain relevant and deliver the value expected by our members and policyholders is ever increasing”.
“Our competitive advantage of being a mutual remains intact and we remain the only organisation that can provide funeral insurance, funeral services and products as a one-stop service.” Carl van der Riet, CEO.
Highlights if the 2019/2020 financial year
- The AVBOB Poetry Project, now in its third year, with more than 30 573 entries.
- The 56th container library was donated in March 2020.
- R150 million was set aside for the development of local suppliers, mainly for funeral services.
- The refurbishment of rural schools to the value of R135 million is progressing well
- R15 million was contributed towards the Sanitation Appropriate for Education (SAFE) initiative.
- Premium income increased by 14.0% to R4.7 billion.
- Policyholders increased to 2.2 million and the number of lives assured to 7.0 million.
- The number of funerals conducted grew by 4.5% during the year.
- Free funeral services and products to the value of R318.7 million were provided to members by AVBOB Funeral Service during the year.
- The Group’s national footprint was expanded by 11 new funeral and insurance offices.
- The Group was successfully certified in 2018, 2019, and 2020 by the Top Employers Institute.
- Surplus from insurance operational activities increased by 37% to R1.8 billion.
- An additional R1.2 billion was set aside for the improvement of policyholder benefits.
Awards and achievements
- WINNER of the Funeral Cover category in the 2019/2020 Ask Afrika Icon Brands Survey
- PMR.africa Diamond Arrow 2019 award in the category Business Sector: Funeral Service and Insurance KwaZulu-Natal
- SECOND PLACE in the Consumer Category: Long- term Insurance – Sunday Times 2019 Top Brands Awards
- WINNER OF THE PLATINUM AWARD in the Best Funeral Plans category and the Gold Award in the Best Long-term Insurance category of the 2019 Daily Sun Readers Awards
- INDUSTRY WINNER in the Funeral/Burial Services category in the 2019/2020 Ask Afrika Orange Index® benchmark
- GOLD WINNER in Die Burger’s 2019 Jou Keuse (Your Choice) competition, in the category Best Funeral Service in the Western Cape
- The AVBOB Poetry Project WON A GOLD AWARD for Best Online Competition at the prestigious 2019 New Generation Social & Digital Media Awards
- The AVBOB Poetry Project and partner agency, the et al GROUP WON TWO GOLD Assegai Awards, in the Social Media and Integrated Direct Marketing Campaigns categories
- The Group was certified as a TOP EMPLOYER through the Top Employers Institute (TEI) for the third year in a row
- WINNER OF THE FUNERAL COVER category as measured in the 2020/2021 Ask Afrika Kasi Star Brands Survey
*Terms and conditions apply. AVBOB is an authorised Financial Services Provider. Funeral benefits only apply if AVBOB conducts the funeral. AVBOB is a level 2 B-BBEE contributor. FSP 20656. www.AVBOB.co.za