Insurance Guru bares it all

By Sibangani Dube
December 2012 - January 2013
Prime Business
MMI Holdings is gearing up for serious business in Namibia and recently created a Group consisting of five companies covering brands, Metropolitan Namibia, Momentum Namibia, Methealth Namibia Administrators and Momentum Investments Namibia. This will place them as the third largest life insurance provider in Namibia. Marshaling the newly established Namibian insurance giant is a seasoned economist turned insurer named Jason Nandago who has been appointed as the Group CEO. Prime Focus caught up with him recently and shared his nuggets of wisdom with us.

PF: Would you say with your new appointment as Group CEO, you have reached the zenith of your life?

JN: To answer the question directly I will say no; no in the sense that life is full of ladders, you start off by climbing from the bottom until you reach the top. I don’t consider this appointment as the highest I can go; most probably yes within the group, but not in my life. There are other opportunities one may come across as one grows older. They may not be always linked to a position within an organization. Who knows when those opportunities may come up? Maybe one day I will become the Namibian president.

PF: Do you have political ambitions?

JN: Yes…after I have done what I need to do when my contract comes to an end and should I be presented with another opportunity to continue. However, the departure of a senior leader within the organization should not leave a void within the company. Therefore, our brand promise has placed mechanisms in place that ensure the continuity of our business by identifying and molding the potential leaders we have within our company through training, mentorship and skills development.

PF: Why is your industry doing so well, currently?

JN: One needs to understand and take a historical view on that. Namibia is coming from a situation where only a chosen few were included in financial services offerings, whether that was banking or insurance. Therefore, most of the people on the lower end of the market were not considered for financial services products prior to independence.

Post-independence, with the resultant education which most of our children have access to, an expanding middle class is emerging. Products are being tailor-made for the lower end of the market and therefore pricing becomes more affordable for the lower end of the market. What was previously an untapped market is now a contributing factor to the growth of the industry.

PF: In reference to your new role, this is a new chapter in leadership, why not management?

JN: Some people may think management and leadership are the same but they are different. Leadership means giving direction, in the broader term, that’s how I define it. In leadership, you don’t have to be the most intelligent person in the organization. However, you need to be able to influence people in a positive way and bring out the best in them in order for them to assist you to meet the organization’s strategic goals and objectives. People must be able to trust you and identify with your leadership style. Management is a totally different scenario, in the sense that you manage tasks and functions. In leadership you manage people. The role that I find myself in requires a leadership approach, especially considering the magnitude of the companies I have been tasked with leading.

The Namibian Group’s five business entities will be managed by a very seasoned team and my crucial role will be to lead the group within our strategic goals, while living out our organization’s values, shared by all our business units. These are Accountability, Diversity, Excellence, Innovation, Integrity and Teamwork.

PF: Would you say your appointment is a hot seat or you are now relieved?

JN: It’s a hot seat in a way that it is transformation. The first six months will be challenging because we need to pull our strategic imperatives together .Transformation and integration of people, business operations and corporate culture will need to take place. It will become increasingly important to ensure that this transformation process creates synergies and that the businesses are aligned. This in itself presents challenges, as we want to ensure that the process has a minimal impact on the business and our stakeholders.

PF: It has been mentioned that you have an impressive track record in senior management, what has been your guiding principle as a leader beyond text book theories?

JN: It takes vision and planning, and in addition, a measure of charisma. This market, especially the insurance industry, is one area where competition is intense. We have about 17 registered life assurance companies in Namibia.

Looking at a market with a total population of 2 million, an unemployment rate of 51 percent, officially reported and taking into account our younger population, who present a high level of unemployment and a high number of adults who are in retirement, we find the pool of potential clients who possess the purchasing power to participate in insurance products, very small.

In this highly competitive environment, we need to secure the competitive advantage that differentiates our group in presenting a value proposition to citizens of Namibia. As a company with origins going back more than100 years, we pride ourselves as a group that has developed an understanding of the needs of our markets.

PF: Is there something in particular that attracts you to be in the insurance industry, and would you consider a hand in one of the struggling parastatals?

JN: My first job was with the Bank of Namibia where I spent my first five years. We established the bank and transformed it from the South African Reserve Bank, from 1992 to 1997.

If I wanted to be an economist I would have stayed there. However, there is something unique about this industry. The uniqueness of it relates to the challenge of understanding your client base. There is money to be made for shareholders but there is also a lot to gain from being our client.

It goes hand in hand: The client entrusts us with his premiums, we invest it correctly and on reaching maturity, we want our clients to be satisfied that we have generated returns that justify having placed their investments with our company.

As for joining a parastatal, I might have done so should the right opportunity have presented itself earlier in my life. However, running a parastatal comes with its share of challenges as the roles of the government as shareholder, the boards and management are not always clearly defined in practice. Appropriate differentiation between these roles would ensure a more efficient parastatal.

PF: Let’s talk about the numbers. What is the asset base of your companies when you put them together?

JN: Let me concentrate on the two life companies, Metropolitan Namibia currently owns 51% of Methealth Namibia Administrators. In terms of the way that we value life companies, we use what we call embedded value, or what is known as the intrinsic value of the company. In using the intrinsic value of the company by combining Momentum and Metropolitan, we are talking about the value of the company of not less than N$1.35 billion.

So it’s a massive operation in terms of the new merger, positioning us as third largest in the industry. In terms of the market we serve in respect to the lower to middle-income segment, we believe that we will have a larger share as a combined entity.

PF: Doesn’t managing such a big company give you goose bumps?

JN: No it generates a level of excitement within me. At the end of the day managing a company of this magnitude with a significant balance sheet, the scope of our capabilities and strategies, are infinite. It also means that we should be able to offer our clients choices with more financial security.

PF: How do you make sure that you remain relevant, (instead of a cut-and-paste scenario from South Africa) given all the changes that are taking place?

JN: We have a section within the group called Business Intelligence. The main role of Business Intelligence is to conduct market research that evaluates and identifies current potential client needs. We have moved away from being a product house were we develop products just because we feel the market needs them, to a situation where we meet the market needs by listening to people and matching our products to their real needs. The resultant products become relevant on the backend of good market research, thus ensuring solutions for our clients that match their expectations and desired needs.

PF: Structurally, on ownership, how long will Namibia wait until the ‘Jasons of this world’ are the majority shareholders in companies such as this one?

JN: Allow me to put certain things into perspective: the Metropolitan Group in South Africa, for example, was probably one of the biggest pioneers of BEE. In Namibia, Metropolitan was the first company in the financial services sector to embrace the whole concept of BEE. In 2002, Metropolitan sold a 20 percent share to a BEE Company; and at that time the deal was worth an estimated N$74 million. Therefore, we have always and will continue to embrace the concept of BEE through our shareholding and management structures.

PF: Would you say these structural changes and BEE buy-ins are having an effect on the ordinary person on the street?

JN: It is a relevant question; the perception may be that BEE’s have been self-enrichment schemes and the common man never really gets to gain. It depends on how you really want to look at it. If I establish a BEE company and we have 10 people it will mean that we have to share with the whole village.

PF: Let’s look at the labor issues, particularly the industrial actions both locally and beyond. What is the missing link here?

JN: I don’t want to comment on what is happening particularly in countries such as South Africa but all these are similar. I think that somewhere there is a missing link. The missing link is probably the flow of information because there is usually a lot of misconception. The employees think that these employers are making huge profits and these profits are not being shared with the employees, it goes to the capitalists. Sometimes these are just misconceptions, not the truth.

I think one should continuously have dialogue with the employees and the labour unions, these dialogues should be as open as possible; one should be able to raise issues and open books. If that process [was being] handled, currently we would probably have minimum disruptions and labour unrests because people would understand.

If one can manage that process it must be managed in such a way that it will not turn into unrest.

PF: In your career for the past 13 years what have been your exciting moments and the lows as well?

JN: Honestly speaking I never woke up one day with a feeling that I don’t want to go work and I want to move on.

I am a strong believer of not seeing, obstacles, rather, I see challenges - I don’t see a door as closed, I see it as a door that must be opened. I have always been a realistic person, down to earth and when there are issues challenging me I rise to meet them. I always look at the positive side of life; I believe ink that has been the story of my life.

The exciting moments are many. I am a shareholder in Pinnacle Business Investment. A key turning point was in November 2002 when we finally signed the deal. That has been my motivation to wake up every morning and come to work knowing that in as much as I work for shareholders I am one of the shareholders myself.

The task at hand was to elevate this company from a relatively small company when I joined, to the company that it is today. That has probably been my highest point. Every day when I wake up I want to add a little bit more value in meeting shareholders expectations and I have been doing throughout my career.

PF: In your experience what is the value of employing local nationals instead of expatriates in positions such as yours?

JN: The first thing one has to understand is that local nationals have better insight into what is happening in the country, as they understand the politics, economy, market and probably the government policies better. Therefore, taking the external factors into consideration, this will place them in a better position to lead the company.

PF: In a nutshell how can you describe yourself?

JN: I am an ordinary person; success does not go to my head. I am friendly, I like to make friends, I take it one step at a time and I love having fun, and that’s it.

On relaxation, I am a farmer; I spend the bulk of my weekends on my farm, being around animals helps to bring the stress levels down. PF