Nelson Mandela Metropolitan University (NMMU) Business School today hosted a panel discussion with US and South African economists in academia to unpack the impact of recent developments in foreign, trade and economic policy.
The discussion comes at a critical point when anti-trade, protectionist and anti-globalisation movements and rhetoric continue to shape the global politico-economic landscape.
NMMU Business School visiting Professor of Economics and President of Saint Cloud University, Minnesota, USA, Prof Ashish K Vaidya said “a great degree of uncertainty currently exists in relation to changing global conditions.
“To sum it up, the last 12 months have been a very unusual period for the US and certainly unexpected on many levels. There is a great deal of uncertainty which has emerged from the new administration. On the one hand we have Trump and on the other hand we have a Republican Congress. In some cases, we have alignment between the two and in others we have disagreement.
“What people are trying to understand is where the alignment is between President Trump’s agenda and Congress’s agenda,” he said.
Related: Watch Out For These Trade Nightmares
Prof Vaidya went on to explore the possible impact of alternative economic and trade scenarios in the US.
“Most experts agree that corporate tax cuts and tax reform are imminent. We predict there will also be a more business friendly approach to labour, with policies allowing more flexibility.
“Proposed infrastructure spending is a big topic of debate in congress at the moment with $1 trillion being set aside for development projects which will have a powerful multiplier effect.
Commenting on the impact of these developments, NMMU Deputy Dean of Business and Economic Sciences and Professor of Economics Hendrik Lloyd highlighted both the negative and positive economic and trade implications for South Africa.
“The US is moving into an era of expansionary fiscal policy which leads to corporate tax cuts and a tighter monetary policy which could see an increase in interest rates. Since the benchmark rate for corporate tax could be decreased there should be greater opportunities for the expansion of private domestic funding of infrastructure. This together with a more protectionist approach to foreign policy will have a significant impact on emerging and frontier economies, including South Africa,” he said.
“Protectionism is the new way of thinking about the global economy. Whether you are looking at the US or France, or the UK and Brexit, it seems to be a trend and tendency,” he said.
“Approximately 40% of multinational corporations headquartered in the US operate in emerging economies such as South Africa. Repatriation of capital is a possible concern for the South African economy if US businesses take advantage of corporate tax cuts. What we will then see is the flow of capital away from South African markets.
Related: Minimising The Risk Of Trade
“In terms of foreign and trade policy, the recent pronouncement related to the renegotiation of NAFTA highlight the US’s unwillingness to be dictated to when it comes to their sovereignty.
“How will this influence trade agreements such as AGOA? This is something that South African economists will have to grapple with in coming months,” Prof Lloyd said.
On the other hand, he believes an increase in infrastructure spending in the US could have a positive spin-off for South Africa and other emerging economies in terms of boosting resource spend.
When asked whether local economic protectionism could advance the South African economy, Prof Vaidya was unconvinced.
“I don’t think so. Economies with protectionist barriers have not always succeeded. Economies of the world have become so entangled that a retreat from globalisation will not be easy,” he concluded.
Uber-like Insurance Platform Is Revolutionising The World Of Insurance Claims
the 4-Sure platform, which was launched two short years ago by actuary Shalen Moodley and a collective of seasoned tech gurus, is to provide value-added services that benefit the financial services industry. All partners had substantial success across Africa introducing loan origination platforms for leading banks before deciding to tackle the problems existing in the insurance claims fulfilment process.
A multi-sided, digitally-driven business platform that has been wholly-developed and launched in South Africa is ‘uberising’ the local short-term insurance industry by transforming the traditional claim fulfilment landscape.
Developed locally by Insuretech sensation 4-Sure and headed up by actuary-turned-entrepreneur Shalen Moodley, the 4-Sure platform seamlessly connects the claims ecosystem consisting of the customer, broker, insurer, service providers and suppliers and manages all complex interactions and sequencing required to deliver superb customer experience, optimal claim cost and fast turnaround times.
“The new system, which eliminates virtually all the manual processes and “waste work” involved in dealing with a claim, also provides enhanced opportunities for small businesses to compete for insurance claim work traditionally only available to a select few. Simultaneously, it reduces the fraud risks associated with the manual allocation of claims, and reduces costs across the board”, says Moodley.
“There are several weaknesses inherent in the appointment of the traditional insurance panels, “says Moodley. Relationships between the insurer’s agent and supplier base can result in some contractors being favoured above others. The payment of “incentives” by service providers as a reward for getting work can also skew the allocation process and drive massive cost inflations. Furthermore, costs can vary for similar jobs and the use of assessors for approval of routine jobs results in time delays and increased administration costs.”
“Most seriously for most insurers, is that contact with the customer is lost during the claim fulfilment process – they are disintermediated. Often, the result is dissatisfaction on the part of the customer, disrupted processes, unnecessary delays and often the possibility of an unhappy customer withdrawing their insurance and other investments with the associated brands of the insurer.
After extensive discussions with the industry regarding problems faced with settling claims, 4-Sure concluded that reformation of the system should be based on shorter, effective communication structures, the ‘democratisation’ of the panel system and the strategic use of technology to improve customer delivery and satisfaction levels.
The answer was the building of an entire ecosystem based on the use of sophisticated regressive algorithms that made the ‘Circle of Service’ between insurer and claimant transparent and frictionless. Creating an extensive database, making software available to service providers and connecting suppliers of raw materials as well as early payment mechanisms completed the service circle. As well as speeding up claim response times, the process was also efficient and fundamentally more effective.
Taking inspiration from the concept launched by the Uber transport system, the insurance platform includes a vastly increased list of qualified and rated service providers. As in the ride-sharing service, becoming listed requires that several stringent criteria are met by service providers. When a claim is registered – including the time when the customer requires assistance – it drops into the platform. Appropriate service providers listed can then respond and confirm their availability. They are then required to be on site at the time stipulated by the customer, undertake the work and then complete a Mobile App-driven reporting process for the insurer’s records (including before and after photographs, assessments and costings).
To participate in the platform a service provider must have a smartphone and the software, provided free by 4-Sure. Part of the package includes a service provider ‘scheduler’s’ desktop package that enables job scheduling, field technician allocation and all the information relating to the job to be collated and electronically submitted for payment to the insurer.
“For a sole trader or SME, one of the greatest challenges to building a sustainable business is controlling cash flow. Service providers on 4-Sure do not have to carry an extensive array of raw materials to fulfil allocated insurance claims work. Once they are on site, have assessed the repair work and had it approved within minutes, the service provider is able to visit a 4-Sure approved partner supplier (Builder’s Warehouse, Penny Pinchers, Buco, Plumblink and others) and pick up the required stock.
“They are then using their 4-Sure Mobile App to get the necessary materials and the outlet then bills the insurance company concerned directly through the 4-Sure software for the expenditure. Because of the volumes involved, we have been able to negotiate favourable prices for these services which are now on offer at more than 400 service points across the country. The service provider bills only for the time and labour spent on the job at the agreed rates. Their bills are then submitted using the 4-Sure software, go directly to the insurer and are generally settled within 24-48 hours.”
“As smaller operators are no longer waiting between 30 and 60 days for their money, they are happy to complete routine jobs for a set fee. Depending on the service they deliver and the ratings they receive, they are in control of just how much work comes their way. As a job is loaded on the system and service providers then bid for the work, competition is assured and opportunities for work are equal across the spectrum of service providers – a new paradigm which rewards performance with more work and manages the non-performers off the platform.”
Further value is added to service providers by free access to geo-positioning systems, which not only plots their way to their closest parts supplier but also to the customer’s property. Jobs that appear on their systems also cover the areas in which they choose to operate. As is the case with their Uber driver colleagues, those closest to the customer can make their presence known and compete for the work. Those who feel the costs of reaching the site do not make a job worthwhile simply do not respond to the job alert,” says Moodley.
For insurers, who can track the response times of service providers in real-time and contact them electronically if they are late on site, the major benefit is that the loss of customer contact at the point of handing over a claim to an incident manager no longer exists.
The typical flow of a job is made easier by:
- Insurers were able to use a sophisticated eco-system that is a centralised platform connecting all players in the supply chain, facilitating a seamless claims fulfilment process.
- Customer contacts their insurer via their contact centre, their website, or a digital self-service channel and this claim, is electronically dropped into the 4-Sure to facilitate the claim process automatically.
- A claim’s details being logged directly on the 4-Sure platform instead of being referred to an incident manager. The message enables specific skills, customer location, a time required for service and other factors to be selected so that it can be responded to by competing service providers.
Explains Moodley, co-founder of 4-Sure and one of the innovators behind the home-grown platform that caters specifically for local needs and is believed to be the leading services of its type anywhere in the world:
“4-Sure has succeeded in becoming the first, fully-digital insurance claims platform to provide a truly customer-centric experience. The system is flexible and although the present focus is on non-motor claims, other avenues, including motor insurance and non-insurance opportunities are being investigated and developed,” says Moodley.
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Off The Beaten Track
What Tourism Month means in South Africa and how Mango Airlines is focusing on local opportunities.
This September, being Tourism Month, we have so much to talk about in South Africa, and so many people to engage with, both domestically and abroad. We are privileged to be able to leverage a broad range of destinations – arguably world-class in nature, and they expand way beyond a beautiful mountain, and an ecosystem of game.
The vast majority of leisure tourists, however, remain attracted to the Mother City and various Safari destination, while business tourists tend to stick to hub cities for short durations of time before departing again.
“There is a golden opportunity to expand on the same offerings – while not detracting from them in any way. Our responsibility is to drive tourism into new areas, really emphasising the differentiators that are incredibly attractive to local and international tourists,” said Benediction Zubane, Head of Marketing at Mango Airlines.
“Often tourists visit one of the more well-known sites in an area, and are completely unaware of the other features and destinations close by. We’re seeing a lot of success in township tourism which goes to show how diversifying can really drive new tourism opportunities,” explained Zubane.
According to Statistics South Africa survey on Tourism and Migration, nearly 3.5 million international travellers visited South Africa in August 2017. Top numbers were tourists from USA, UK, Germany, France and The Netherlands, with African visitors primarily coming from SADC countries. Zubane added, “This means there is vast opportunity to begin engaging with travellers in new countries across the globe. We need to become our own best ambassador, talking-up our famous and lesser known destinations, proudly showcases our uniqueness. We should also be tourists in our own country and start exploring the wonders of the Rainbow Nation.”
Mango is passionate about helping its SMEs and entrepreneurial community to successfully overcome the unique challenges facing the tourism industry: “There has never been a more opportune time for small businesses and entrepreneurs to benefit positively from tourism in South Africa, and we hope to celebrate alongside our SME community as they fly high – both literally and figuratively,” he concludes.
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