This article is courtesy of Morningstar Investment Management, our Discretionary Investment Manager.
Based on our own experience and statistics, we have found that more clients enquire about Discovery Life than other life insurance company's products. This is interesting, as we are an independent practice, and we have contracts with no less than 7 life insurance companies:
- Old Mutual
As an advisor, the process I go through is to first understand the client, his needs, then match the best product to his needs. Discovery Life does not necessarily meet client needs in every situation. So why do more clients ask me about Discovery Life?
When we unpack the trend, I think there are a few things that draw clients to Discovery Life:
1. A client is a Discovery Health member. As Discovery Health is the largest open scheme in the country, with 55% market share, most of our clients are on Discovery Health. They are familiar with the company, and they trust the brand. Hence they ask for Discovery Life when they think about life insurance.
2. Discovery is an expert in marketing. Whether you like Discovery or not, they are a leader in marketing. From its early days, it has been very strong in marketing. You hear and see its advertising everywhere: Online, radio, TV, social media. And it does an excellent job, with beautiful graphics, interesting stories, partnering with sportspeople. In your face everywhere.
3. Discovery excels in mobile engagement. Discovery spends a lot of efforts and money in developing its mobile apps early on. It is a leader in mobile apps. I find myself logging in to Discovery app at least once a week, to check my Vitality Active Rewards, then maybe browse other sections.
Discovery has made a lot of information and data easily accessible, at your fingertips literally. You don'g need to log into a website, you don't need a computer. You don't have to call a number. All you need is a phone. Yes all that information is kept secure.
4. Everything under one roof. As Discovery continues to expand its product range, and clients log into Discovery app regularly and see what else Discovery has to offer, they would think, "Why not get this product with Discovery as well, so I have everything in one place?"
5. Social influence. As more and more people become clients of Discovery, when their family and friends talk about life insurance, the name Discovery would come up somewhere in the discussion.
6. The profile of our clientele. As Daberistic focuses on the business owners and professionals market, they tend to be in the more affluent market. Discovery's market positioning speaks to their needs, image and aspirations.
Discovery Life has many unique features and benefitsis. It is competitively priced if integrated with Discovery Health and Vitality. It has an attractive payback benefit. Now a Discovery Bank client can get further benefits with the Discovery Bank Integrator.
While Discovery Life does have a strong value proposition, it is not for all clients. If a client is not on a medical aid administered by Discovery, does not like to exercise, does not pay attention to healthy living, does not want to spend time engaging with Vitality wellness programme, then he will find Discovery Life to be expensive. And it can become even more expensive over the long term.
We profile South African professionals of Chinese descent, in the financial services sector.
What's your name and age?
Tian Pan, 32
What has been your experience?:
• Willis Towers Watson (previously Towers Watson) – Investment Associate
• Old Mutual Wealth & Investments SA – Investment Product Actuary
• Current: Prescient Investment Management China – Head of Product and Business Development
What do you do?
Investment product development and distribution
Your area of expertise?
Investment product development and strategy
What is your place of birth?
When did you immigrate to South Africa? What brought you here?
There were a lot of tax incentives for Taiwanese investors in the early 90s to invest in the SA manufacturing industry. My father is an engineer and was hired by a group of investors to come to SA and help set up several manufacturing operations. Our family moved to SA then.
Where did you study, and your qualifications?
University of Cape Town – BBusSci Actuarial Science (Hons)
Institute & Faculty of Actuaries (UK) – Fellow (FIA), Chartered Enterprise Risk Actuary (CERA)
Why did you choose your line of studies?
I was fighting against my parents’ wishes of studying medicine at the time. Being pretty strong at mathematics while hating accounting, I decided to try actuarial science. I didn’t really know what actuarial science was, just that it was very difficult to study. After getting into the studies, my interest in the investment areas grew a lot.
How did you get into the financial services sector?
I majored in finance and actuarial science in university. I also had a great interest for the investment markets, so it was natural to join the industry after graduation.
What are your hobbies and interests in your spare time?
I enjoy going to gym, playing badminton and squash. I also enjoy exploring different delicious cuisines along with travelling.
How do you see the future of South Africa?
I’m concerned about South Africa’s future. I believe the overall competitiveness of the country is consistently declining. Both government and SOEs are plagued by corruption which greatly affects the country’s fiscus. Unemployment and crime rates are high and no improvements are expected in the short term. Income inequality is also widening which I believe is a dangerous direction we are heading into. I believe that structural changes are needed within government and the country to change the medium term outlook for the SA economy, however this may be a long, painful and risky process. Even though changing and growing will be long and painful, I believe SA as a country has huge potential in the long term.
What advice or encouragement do you have for university students who want to enter the financial services sector?
I think the most important thing is to do what you love, do not do it because of the money because it will be tough to push through the lows when doing something you do not love. Then it would be to always have a learning attitude, to continue to learn and improve one’s own ability. This will not only help you improve consistently over time but also help you work happier in my opinion. Remember the survivourship bias and understand the hard work behind the scenes of someone successful in finance. Good luck!
Tian Pan's LinkedIn profile: https://www.linkedin.com/in/tian-c-pan-68849821/
Naji Haddad is a life insurance agent, successful businessman, a proud MDRT member in Beirut, Lebanon. François du Toit interviewed him, he shared his life story of being positive, overcoming adversity and helping people. As people of Beirut deal with the aftermath of a powerful chemical explosion on 4 August 2020, his story touches many hearts.
This locally little known fund is ranked 1st out of all unit trust funds over 7 years.
Our lives have changed so dramatically since the end of March that it’s hard to remember a time when hand washing, mask wearing, and social distancing weren’t top of mind. These important science-proven behaviours will help keep you and your loved ones safe, so we need to keep doing them. Even if we’re feeling corona fatigue. Here’s how we can fight the spread of COVID-19 together.
By now we all know how COVID-19 is spread – through droplets in the air from infected people (whether they show symptoms or not) or from touching your face, eyes or mouth after coming into contact with a contaminated surface. With the COVID-19 infection rate on the rise and South Africa ranking high on the list of most confirmed cases globally, the need to prioritise non-pharmaceutical interventions to fight the pandemic is becoming more and more important – every day.
DID YOU KNOW that by simply talking out loud for 1 minute, you create over 1 000 droplets that stay airborne for up to 14 minutes?
While we wait for a vaccine for this virus, the World Health Organization recommends avoiding the 3 Cs and continuing to practise healthy habits:
Spaces with a large number of people where social distancing is not possible
Example: At a funeral
Places or situations where people have close-range conversations
Example: Inside a restaurant
Spaces with poor ventilation, regardless of the size of the area
Example: In an elevator
Practising healthy habits
Building these simple, yet powerful healthy habits is key to protecting yourself, your loved ones and even your fellow South Africans:
• Practise social distancing
Deliberately maintain a distance of at least 1.5 metres away from others to protect against liquid droplets that may contain the virus if someone coughs, sneezes, or speaks near you. Here is everything you need to know about social distancing.
TOP TIP: Teach your children about social distancing. Need something fun to remember to social distance yourself? Picture a distance of 2 hadeda birds OR 3 penguins OR 1 small shark or 1 cow between you and the next person.
• Keep washing those hands
Wash your hands throughout the day for at least 20 seconds with soap and water or use an alcohol-based hand sanitiser. This helps reduce the chance of the virus being transmitted. Read these tips on how to wash your hands the right way.
TOP TIP: Hum the ‘Happy birthday’ song (with the tap turned off!) while you are washing your hands to time the 20 seconds right.
• Never leave home without your face mask
Treat your face mask as you do your favourite underwear. You want them clean, without holes and fitting you snugly without the need to constantly readjust them. Find out the dos and don’ts of wearing a face mask.
TOP TIP: Keep your masks right by the entrance to your home so that you cannot open the door to leave without seeing them.
Keep reminding yourself that we have the power to prevent COVID-19 through healthy and responsible behaviours. Your family, friends, community, colleagues, and country is counting on you. Stay home, stay healthy and help save lives.
South African Market Update
The South African equity market also moved higher in the month, however, local equities lagged other emerging markets, which rallied significantly during July. The local market was weighed down by weak performance from some large industrial index constituents.
There was divergent performance from a sector perspective, with resources (particularly gold and platinum counters) being the most significant driver of positive performance.
Local bonds ended the month higher, supported by the attractive yields on offer relative to the declining yields on cash, subsequent to the interest rate cuts by the South African Reserve Bank (SARB) of 3% since the start of the year.
Local listed property had a poor month, with disappointing company earnings updates and concerns around the prospects of physical property as an asset class acting as headwinds for the sector.
Broad US dollar weakness was supportive of the prospects of the rand against the greenback, while the local currency gave up some ground against both the euro and the pound sterling.
South African Economic Update
The SARB cut the repo rate by another 0.25% at the July Monetary Policy Committee (MPC) meeting, revising down its inflation and growth forecasts at the same time. This brings the policy rate to a level of 3.5%, its lowest in close to 50 years.
SA headline CPI rose to a year-on-year figure of 2.2% to the end of June (from 2.1% in May), well below the midpoint of the target range of 4.5%.
SA’s terms of trade continued to improve in June, with the trade balance widening further to a surplus of R47 billion (the largest since January 1990), as exports jumped 10% to R116 billion and imports fell 19% to R70 billion.
Chart of the month: The performance of the US equity market year-to-date has been largely driven by those companies with the biggest market.
See below for a summary of the key market movements for the month of July: