Institutional Insights 2014 Home

POPI does not encourage technology-making decisions about people without a human intervention in the process: there must be a human check in the decision. Wonga.com is an example of technology making a decision about whether to grant a consumer a loan. The consumer needs to be able to have a human review the decision to grant the loan.

Generally, no, but it depends on the cover of the specific insurance. Fines given by the Information Regulator are usually not covered. A claim for damages from a data subject might be covered.

Generally speaking, yes. There are conditions which must be complied with to do it lawfully. But it is in the property owners’ legitimate interests to control access and secure the property.

Click here to see John’s video discussing POPI further

Advice processes

Simeka, a division of Sanlam, provides retirement advice to various retirement fund boards of trustees to take into account the impact of increased longevity and human behaviour. This aims to empower retirement fund members to make appropriate decisions via the use of an interactive tool.

Sanlam’s network of advisers are also available to provide individualised and professional advice to empower members to deal with the financial challenges that longevity poses through providing appropriate investment and drawdown advice for living annuities and other nest eggs.

Accumulation (of funds before retirement)

An extended investment horizon means that we will need to carry extra risk (exposure to equities) in our retirement portfolios to generate sufficient returns to compensate for a longer lifetime in retirement. Sanlam provides a range of investment structures to enable members to cost-effectively take on risk-adjusted returns within the confines of regulation 28.

Annuitisation (converting a lump sum investment into a series of income payments at retirement)

Sanlam provides a range of guaranteed annuities that remove or reduce the risk of increased longevity for individuals. More recent products have been launched by Glacier by Sanlam where a guaranteed number of units are paid to the individual for life, with the value of these units determined by the underlying portfolio. In this way, individuals can increase exposure to more risky assets such as equities to increase returns (and therefore future increases) while still having the guarantee of a secured income for life.

We have introduced a phased approach to retirement

This approachproposes that the date on which the lump sum retirement benefit accrues to the individual should no longer be dependent on the normal retirement age, but instead should be the date on which the individual chooses to take the amount as a lump sum or annuity. So now individuals can extend their own date of retirement according to their own circumstances and when they prefer to start receiving their pension benefits, enhancing preservation and improving financial security in retirement. Taking this into account, Sanlam has introduced Sanlam Lifestage, which is a trustees-approved default investment strategy which aims to meet each member’s savings requirements working towards either a normal retirement age or a planned retirement age.

Click here to see Viresh’s video discussing Longevity risks further

Investment in Africa remains low in relative terms globally. Less than 6% of total global Greenfield Foreign Direct Investment comes into Africa, fewer projects came into the whole of Africa last year, than into India in the same period.

There is a danger of a gold rush mentality, but it is important to note that Africa is at a relatively early stage of economic development, sub-Saharan Africa is comparable to East Africa 10 – 15 years ago. In the short term, particularly in the private equity space, the risk is highlighted by too much money chasing too few real opportunities.

Opportunities are emerging but the danger is that the cost of entry is going to be much higher in 5 -10 years, if you are not in Africa now, currently building your portfolio and positions.

The long-term challenge remains that nothing is guaranteed despite the positive trends. The most significant challenge we see is the structural transformation and diversification of African economies, particularly in the manufacturing sector, which speaks to job creation that impacts youth unemployment across Africa, and particularly here in South Africa.

We have seen that companies succeeding in Africa have spread their risk over many geographies reducing risk through the portfolio effect.

Click here to see Michael's video discussing Africa further.