Santam is known for being South Africa’s leading short-term insurer. So why then, is the company spending millions on projects like installing fire alarms in vulnerable communities, educating children about water safety or equipping and upskilling fire departments?
Simon Morrilly, Senior Manager: Stakeholder Programmes at Santam, explains Santam’s involvement in initiatives like these under its Partnership for Risk and Resilience (P4RR) programme.
Q: Why was P4RR established?
A: An increase in disaster-related risks is a world-wide phenomenon. This, coupled with concerns about the capacity of municipalities in South Africa to provide satisfactory municipal services, presents a threat to the resilience of people and companies in the face of disasters. There is a need for municipalities and insurance companies to better understand disaster-related risks and engage in actions to mitigate these risks. The objective of P4RR is to reduce risk and build capacity in municipalities and local communities. A secondary benefit of the programme, however, is for Santam to reduce our own commercial risk. If we can help municipalities reduce their risk it has a potential knock-on effect of reducing our own risk exposure. We do this by forming partnerships with district municipalities; we agree on their key risks and what projects are needed to reduce these and improve their service delivery.
Q: How do you identify the municipalities you partner with?
A: We apply two criteria when selecting partner municipalities. Firstly, we determine which municipalities are on The Department of Co-operative Governance’s list of municipalities that it is concerned about. Secondly, we overlay this list onto the list of municipalities in which our own Risk Services department deems that Santam has significant risk exposure. Municipalities that are common to both lists become candidates for partnership with Santam.
Q: But what does Santam know about disaster management?
A: We aren’t disaster management expert, but what we do is we bring in the expertise, as service providers, where necessary to support partner municipalities. For example, with the smoke alarms we worked with the Western Cape Disaster Management Centre and they offered their expertise even in other district municipalities. We also work with entities like the CSIR and other consultants to understand the risk in a municipality, not just for the municipalities but also to better understand our own commercial risk.
Q: What value does P4RR add to Santam?
A: From a corporate citizenship perspective, we see ourselves as a company that supports South Africa as a developing country. This means that we contribute resources and expertise, and work with willing partners to ensure South Africa grows and builds a strong economy. There are many ways this can be done, with our choice being to focus on the disaster management functions of municipalities. The theory is if we can support municipalities to provide proper disaster management services, we not only contribute to a reduction in loss of life and damage to property, but should see a reduction in our risk exposure and insurance losses. So on the one had we are supporting South Africa as a development state in building capacity for disaster management while on the other is the commercial value for Santam is around better understanding our risks and work at reducing our risk exposure in municipalities. Another reason we undertake this work is, if you look at “wicked problems” facing the world, be it climate change, poverty, poorly performing economies or an increase in disasters happening, companies need to work in partnership, you cannot face these challenges alone. You need local government and various partners in your value chain. Sometimes you even need your competitors to work with you to achieve a mutual goal.
Q: Apart from funding, what does Santam contribute towards the initiatives?
A: Where we are able to we transfer skills such as risk management, networking and project management. A skill we have developed through our work, is that of networking and facilitating relationships between stakeholders. When you work with complex problems you have to be able to work across boundaries. Much of the work we do touches on different public sector departments that naturally operate in silos. We’ve been successful in bringing people together, not just municipalities but also different government departments and, private sector partners. The ability to forge relationships to achieve a goal and getting people to work together to achieve that goal is a strong value-add that we bring in addition to the financial investment.
Q: Which of the projects thus far would you say have had the biggest impact?
A: The smoke alarm installations have seen some positive results in reducing the damage to property and loss of life as a result of fire. But the funding of fire equipment for fire stations and firefighting training is a change that is immediately very visible. There are municipalities where more than half of the firefighters don’t have any formal training, let alone accredited training. In Sarah Baartman Municipality for example, we funded accredited training that brought the skill level of every firefighter in the district (about 35 of them) up to fire officer one. Another highlight is our work in supporting the creation of a Geographic Information Systems (GIS) in two municipalities thus far. The GIS system is a decision-support tool that helps municipalities identify high-risk areas, for example when heavy rain is predicted, and proactively take steps to reduce the impact and plan adequate response. Most municipalities have the hardware and software available to do this, but don’t necessarily have the knowledge or skills to use it. We bring in skills to help take what they have and build capability to view the data in the GIS system and make more effective decisions.
Q: What’s in store for the year ahead?
A: Firstly, we are entering into a partnership with the Cape Winelands District Municipality. Secondly, we will soon publish a research report on the Knysna fires of 2017, that we commissioned the CSIR and University of Stellenbosch to do. The recommendations in the report will hopefully influence legislation and by-laws as it relates to wild fires as well as the insurance industry to reduce the fire risks that the country faces. Thirdly, we are also working with the Gauteng Provincial Disaster Management Centre, focusing on incident command management following the devastating Bank of Lisbon building fire last year in which three firefighters lost their lives. Fourthly, we will continue to execute projects that we are running with our current partner municipalities.
Those are the key projects for the year ahead, but disasters can’t be planned so whatever else comes up, we will see whether we are able to respond appropriately and within our means to do so.