AVBOB AGM: Group is well-positioned for further growth
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The period under review was marked by the unprecedented spread of the global Covid-19 pandemic, which resulted in both second and third waves in South Africa.
As a business operating on the frontlines of the pandemic, the AVBOB Group experienced first-hand the bereavement of countless families and communities in the country.
The challenges that South Africans have had to face and overcome since the outbreak of the pandemic reflect the breakneck speed at which the world has changed. These were the opening words of Chairman, Mr Jannie Venter, at AVBOB’s 70th AGM where the Society’s financial results for the 2021 financial year were presented.
The event, which took place on 17 November 2021, was held with a limited number of in-person attendees at the ContinuitySA premises in Midrand, in adherence with current Covid-19 regulations, and online.
“The 2021 financial year was unprecedented in many ways. The COVID-19 pandemic and associated regulatory responses created a volatile and rapidly evolving operating environment. Apart from the economic and environmental impacts, the loss of life has been devastating,” Venter said.
During the past financial year AVBOB Funeral Service provided R497 million of free funeral service and products to their members, and R18 million of free personal protective equipment (PPE) used by their undertakers and frontline staff conducting funerals.
The Group delivered exceptional results for the year under review, setting multiple records in all three operating units – insurance, funeral service and manufacturing. “We placed increased focus on our digital transformation journey and on employee wellness and support. The business is well-positioned for further growth in a new post-Covid-19 paradigm,” Venter said.
Despite the strong investment market performance during the past year, volatility has increased, and future growth prospects appear to be under pressure. The effect of these economic pressures will be managed with empathy for members.
The Group’s shared value mutual model is the cornerstone of their unique value proposition, which creates tangible economic wealth and benefits for its members.
Venter emphasised that it is vital that the Group contributes to the sustainability of the world we all share to manage the relationship between business, society and the environment.
AVBOB CEO, Mr Carl van der Riet, explained that during the hard lockdown in the last quarter of the previous financial year, the Group invested in its distribution channels by providing financial support to its employees who were unable to sell policies. The Group also invested in the development of digital platforms to enable intermediaries to sell policies with limited human contact.
“These investments paid off significantly as evidenced by record sales production across all our distribution channels. Our funeral service and manufacturing operations again exceeded all our expectations and the personal commitment of our teams, dealing with increases in monthly demand of up to 300% at the height of each wave, cannot be overstated,” he said.
During the year under review the Group generated a profit before transfer to policyholder liabilities of R4 billion, of which R3,7 billion was set aside for the future enhancement of member benefits.
HIGHLIGHTS OF THE 2021 FINANCIAL YEAR
- Premium income increased by 9.6% to R5,2 billion.
- New business annual premium income increased by 44.9% to R1,9 billion.
- Policyholder benefits increased by 42.2% to R2,7 billion.
- Total assets increased by 32.3% to R28,3 billion.
- R3,7 billion was set aside for the future enhancement of member benefits.
- Statutory solvency cover ratio maintained at 2.6 times.
- The number of policyholders increased to 2,4 million and the number of lives assured to 7,6 million.
- The number of funerals conducted grew by 45% during the year.
- R41 million was invested in training interventions.
- R96,7 million was paid to members in respect of their AVBOB Reward Accounts.
- A container mortuary was donated to the Nelson Mandela Academic Hospital in Mthatha in May 2021.
- The 57th container library in the series of 60 pledged was donated to a primary school in the Western Cape.
- The Tears Foundation, through their partnership with AVBOB, assisted a total of 99 039 victims of gender-based violence.
- The Group employs 96% African talent and has a female staff complement of 70%.
- The Group maintained its level 2 B-BBEE contributor status.
AWARDS AND ACHIEVEMENTS:
- Winner of the Funeral Cover category in the 2020/2021 Ask Afrika Icon Brands Survey – July 2020.
- PMR.africa Diamond Arrow 2020 award in the category Business Sector: Funeral Service and Insurance KwaZulu-Natal – August 2020.
- Industry Winner in the Funeral/Burial Services category in the 2020/2021 Ask Afrika Orange Index® benchmark – October 2020.
- Gold Winner in Die Burger’s 2020 Jou Keuse (Your Choice) competition, in the category Best Funeral Service in the Western Cape – October 2020.
- The AVBOB Poetry Project and AVBOB’s partner agency, the et al GROUP won leader awards in three categories of the Assegai Awards – November 2020.
- In November 2020, the Group was certified as a Top Employer through the Top Employers Institute (TEI) for the fourth consecutive year.
- Winner of The Funeral Cover category as measured in the 2020/2021 Ask Afrika Kasi Star Brands Survey – June 2021.