Namibia National Reinsurance Corporation: Patty Karuaihe-Martin

By Prime Focus Reporter
October 2015
Profile

With an affluent track-record of success in the financial sector, Patty Karuaihe Martin has, for the past year, been sitting in the chair of the Managing Director of the Namibian National Reinsurance Corporation Limited (NamibRe).

This month, she sat down with Prime Focus Magazine’s senior journalist, Honorine Kaze, to discuss the company’s vision and growth prospects.

Prime Focus: Could you please explain the mandate of NamibRe as an organization as well as its role in the Namibian financial sector?

Patty: NamibRe was established to fulfill two objectives, these being:

• that of filling the gap of a reinsurance provider in the country, and
• Contributing towards reducing capital outflows so that capital generated in the Namibian economy through insurance business remains in Namibia to contribute towards the growth of the country’s GDP and to improve the position of the country’s balance of payments.

NamibRe crafted a vision, mission and values to guide the institution’s actions towards fulfilling its mandate. Although established as a national entity, NamibRe has expanded its business to other African countries. While this creates opportunities for business expansion for NamibRe, it also exposes NamibRe to competition from international and regional players within the reinsurance industry.

Prime Focus: What is the relationship between NamibRe and Namfisa?

Patty: The Namibia Financial Supervisory Authority (NAMFISA) is the authority that regulates the activities of insurers and reinsurers in Namibia.

Currently, in order to carry out reinsurance business, a person or entity must be registered to do so. The short term insurance Act 4, 1998 (STIA), prohibits any person from carrying our short term insurance business (i.e. indemnity insurance) unless that person is licensed to do so.

NAMFISA cannot issue a license unless the applicant is a public company incorporated in Namibia. In this sense, NamibRe as a reinsurance entity and falling under the insurance industry is regulated by NAMFISA.

Prime Focus: How does the corporation (NamibRe) work in terms of its organizational structure?

Patty: Our organizational structure consists of the Board of Directors comprising of seven members.

Secondly, there is an executive committee consisting of three members, namely me, the Managing Director; the General Manager of reinsurance and the General Manager Finance & Administration.

We further have three departments: the MD’s office, consisting of four staff members; the Reinsurance Department and the Finance Department.

Prime Focus: What are some of the challenges that the organization has experienced in its quest to carry out the mandate outlined earlier?

Patty: One of the key assets of an institution is its personnel resources. Therefore, having the right kind of people in an organization who possess the right attitude and competencies will largely determine the success of the institution. To this end, NamibRe recognizes that it requires specialized skills. It is constrained by the lack of technical skills within the Namibian market.

Therefore within the implementation of our five year plan, NamibRe would undertake a skills audit to ascertain skills shortage and align jobs with competencies.

Another challenge that we are currently trying to revise is making NamibRe more visible to the insurance market and enable it to connect further with its stakeholders. In this instance, a decision was taken to undertake a corporate re-branding exercise which will entail the development, rollout and management of a new NamibRe brand.

NamibRe is currently the only reinsurance company in the country established in 2001 through an Act of Parliament, Namibia Reinsurance Corporation Act (Act 22 of 1998) to provide reinsurance business in Namibia with the resultant effect of curbing the outflow of capital from the insurance industry from the Namibian economy. Therefore the main challenge is that close to N$688 million on net premiums on short terms while N$ 150 million premiums are leaving the country (over what period?).

Prime Focus: As a State-owned Entreprise (SoE), you are called upon to pay dividends to the government, could you elaborate on the amount that NamibRe has so far handed over?

Patty: NamibRe is wholly owned by the Namibian government. Accordingly, section 3 of the NamibRe act makes provision for the disbursement of dividends to the shareholder at the end of each financial year. Through a consultative process by the board and Ministry of finance, the annual amount to be handed over is determined. Therefore for the Financial Year (FY) 2014/15, NamibRe has paid about N$ 1.8m to the government. To date, NamibRe has paid just over N$4.9m in dividends to government, as its shareholder.

Prime Focus: Could you outline some of the milestones and accomplishments that the organization has garnered since its inception?

Patty: NamibRe has attained sustained growth since its establishment due to a hardworking and committed team. Through NamibRe’s visionary leadership, it has shown that a SoE can give returns to its stakeholders. The business and management are supported well by the shareholders and clients. The relationships are maintained and strategic goals are strived towards at all times.

NamibRe has also made a step forward in its quest to be more visible and understood on the market as it has organized engagement meetings with stakeholders on a regular basis.

Prime Focus: With regards to Corporate Social Responsibility (CSR), what has NamibRe done to give back to the community in which it operates?

Patty: NamibRe understand that the importance of giving back to the community. Hence, just in the course of this past year, we have taken part in a number of corporate social responsibility activities.

We have donated funds to various projects such as Oonte Orphans and Vulnerable Children (N$5200), Hockey sponsorship (N$2000) (could you elaborate more on what exactly you sponsor in hockey?)

NamibRe donated floating trophy, sound system, library books and two 4-in-1 printers to the Omuthiya Circuit. We also donated a camera to enable the Music, Arts and Drama Society (MADSOC) students to assist other students with the Oshiwambo language.

Other projects include the donation of maize meal and blankets, together with Namib Mills, to the office of the Prime Minister’s Directorate of Disaster and Risk Management so as to aid the curbing of effects caused by the drought. NamibRe also donated N$5000 to the recent Insurance Investment Summit.

NamibRe has also donated N$3000 and N$5000 respectively to the Community Hope and the STAGS golf event in addition to sponsoring the Pavanga Kaimu Charity Cup to an amount of N$5000.

Prime Focus: Tell us about your background and the path that led to your appointment as NamibRe’s Managing Director (MD)?

Patty: My family has played a big role in the choices and decision leading to my career in the financial and insurance world. My father passed on while I was 12 and coming from a business orientated family, we had to chip in together with my siblings to help our mother in the family business. Thus, I started reading bank statements from an early age and also acquired business skills.

Furthermore one of my teachers at Concordia College motivated me to follow the career I was passionate about. Seeing that her husband was a qualified accountant, they used to share information with me about the accounting profession; I made the decision to enter the accounting world.

From there my academic and professional qualification include an Honors Degree in Commerce from the university of Western Cape and University of Kwazulu- Natal respectively, I also hold a Bachelor’s Degree in Commerce from the University of Western Cape. In addition, I have an Executive Development Programme for partners with GIBS Business School and the Graduate Development Programme with Telecom Namibia in association with SIDA. I am currently busy with an Executive Development Programme (EDP) from the University of Stellenbosch.

On the professional front, I have worked as a partner Director for Advisory Services on Risk and Corporate governance, the Head of Tax reform at the Ministry of Finance; Senior Manager of internal Audit at TransNamib; Regional Manager of Finance and Administration at Telecom Namibia and as a lecturer for Accounting and Auditing at the University of Namibia (UNAM).

Prime Focus: The financial sector is predominantly patriarchal, as a woman, how challenging is it to be the head of an organization such as NamibRe in this setup?

Patty: Women are capable of running institutions successfully, even financial institutions. I just believe Namibian women need more support and mentorship. There are sufficient legislations supported by actions implemented by parliament. This goes to show that Namibia supports the empowerment of women by trusting them to occupy positions of power in society. We, at this stage, need to get more women in leadership positions. As a female executive, I believe that there are ample opportunities for women in Namibia

Prime Focus: Would you say that there is sufficient education about reinsurance and its importance in Namibia and if not what measures can be taken to rectify the status quo?

Patty: We are aware that not many Namibian are aware of the function of NamibRE so we have, over past year, put up educational programs to spread the knowledge about NamibRe. In the same beat, it is the reason NamibRe has started the rebranding exercise to make sure it is more visible.

The need for the rebranding strategy as stated earlier was necessitated by the need to enhance the public profile of the corporation amongst others. Although NamibRe has been in operation for a while, its public profile has remained relatively low. As a result, the purpose and important role played by NamibRe in the Namibian economy is not only known to few people but also not understood by some of the stakeholders.

The rebranding exercise will entail the development, rollout and management of a new NamibRe brand, which is aligned to the objectives of its recently developed five year strategic plan that aims to enhance the public profile of the corporation.

Prime Focus: What is the importance of a reinsurance entity?

Patty: A reinsurance institution provides insurance for the insurance companies. Insurance companies buy insurance for risks they cannot or do not wish to retain fully themselves. Therefore the reinsurance helps provide protection for a wide range of risks including the largest and most complex risks covered by the insurance system. The insurers get to benefit from the capital relief the reinsurers provide and for the insurer’s products development offered of skills.

This is the reason why reinsurance is an important part of the insurance system as it makes insurance more secure and less expensive. This explains why we wish to become more visible and for the population to understand our role.

Prime Focus: Where would you like to see NamibRe in the next five years?

Patty: We would like to see NamibRe fulfill our vision and become the preferred insurance company of Africa. Let’s note that not only NamibRe has a strong mark locally as we are currently the only reinsurer in Namibia but also do business with a number of reinsurers operating in African countries such as Angola, Botswana, Zambia and Zimbabwe.

In the next five years, we would like to also see the fulfillment of our mission consisting of delivering professional and quality insurance services to our clients and maximize shareholder return.

We would like to also grow in capacity and skills needed for the insurance development. We would further want to keep upping the dividend to be paid to government and increase our contribution to the Namibian economy. On the Corporate Social Responsibility side, we want to keep making marks in the financial and insurance sector and give more support to students in those areas.