By Global investment strategist at Ninety One, Michael Power In a recent column in the Financial Times, historian Yuval Harari made the observation that emergencies ‘fast-forward historical processes’. The Covid-19 pandemic, he said, is doing exactly this. Rapid changes are taking place across all aspects of society. Countries, economies and people have been so disrupted that nothing is constant. ‘I think there is no normal any longer,’ said Michael Power, global investment strategist at Ninety One. ‘We are in such a fluid environment that there is nothing very much we can take for granted any more.’ Perhaps what is most profound about this, is how time frames are being condensed. ‘I’m not sure what long term is any longer,’ said Power. ‘Things that I thought were going to happen for instance by 2030 I think in many instances are going to happen by 2025, and even before. There is a concertinaing of many things at the moment, and the reality is that “long term” is something that is affecting portfolios now. ‘There are huge changes taking place across vast areas of business, politics and geography, and we have to get to grips with that.’ This is an acute challenge for asset allocators. They need to be extremely cognisant of their future allocations, because the future may be closer than they realise. Power emphasised two major trends that should be shaping decision-making. The first is that the shift of economic power to the east may now happen more quickly than previously thought; and the second is that the eurozone, and potentially the European Union itself, are increasingly fragile. Chinese wealth ‘We are fast-forwarding this process by which the west is going to see the centre of gravity move to the east,’ said Power. ‘I think that is going to happen in the next five years rather than the next 10. My prediction is that by 2023 China will be a larger economy in absolute terms than the US.’ This shift has been sped up by the massive economic impacts of the coronavirus. While every country has been affected, China is likely to revive itself more quickly for a significant reason. ‘What’s driving the admittedly muted recovery in China is the Chinese consumer,’ said Power. Consumers in the west will struggle to support the recovery of their own economies to the same extent. And this disparity is going to grow more pronounced. ‘What is going to happen in the next five years is that China is going to discover its 1.4 billion consumers, and they are going to become the drivers of the Chinese economy,’ said Power. This will happen at the same time that China is starting to match, and in many cases lead, the development of global technologies. ‘We’ve seen it start to happen with Huawei in cell phones, and it’s probably going to happen in things like aircraft,’ said Power. ‘The Chinese are going to start to move up the technology chain.’ Asset allocators need to consider what this means for their portfolios, particularly because this transition won’t be smooth. ‘In this process of change, there will be capital that will start to leave the west and move to the east, but it will do so quite hesitantly,’ said Power. ‘Some of it will go to a stepping stone between these two worlds, and that stepping stone looks like gold. ‘I think we have to watch this trend,’ he said. ‘Start understanding the opportunities to invest your capital beyond the old world, because the new world is going to come into focus much more quickly.’ European cracks The second major disruption that may be accelerated by the Covid-19 crisis is a serious challenge to the sustainability of the eurozone. ‘In the next five years I think the euro is in danger and possible the European Union itself,’ said Power. ‘That threat is going to come from the south.’ The southern European states are falling further behind their northern peers in economic terms and are increasingly reliant on financial support to sustain their viability within the European Union. Their vulnerability may become even more starkly apparent in just the next few months of summer. ‘Southern Europe earns well over 50% of its GDP from the tourism season,’ said Power. ‘It’s like having a single crop, and their crop is going to fail this year. They are going to get no income from tourism. ‘That is going to cause huge problems, not only for Italy, but Spain, and Greece and Portugal. Many of the issues that are facing the European Union are going to become very front-and-centre in the next four months.’ This may well lead to another country deciding to split away from the Union. ‘In the next five years its distinctly possible that we will see a second exit from the European Union, and that is probably going to be Italy,’ said Power. ‘Even before this, there were cracks evident, but those cracks are now gaping chasms.’ Source: Ninety One
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Below are the different premium relief options announced by short-term insurance companies on car insurance, due to Covid-19 lockdown. It stands to reason that insurance companies should cut the premiums during this period, as people stay at home and do not drive, hence much fewer motor vehicle accidents and claims. This is good news for consumers under financial distress: Discovery Insure Discovery Insure is offering a Motor Premium Relief Benefit to all Discovery Insure personal and business insurance clients during this time. The Motor Premium Relief Benefit will apply to May Discovery Insure motor vehicle premium and will be based on how much you drive during the month of April, as follows - If the client drives less than 500 km in April, they will receive a 25% discount on their May Discovery Insure premium for that vehicle - If the client drives more than 500 km in April, they will receive a 15% discount on their May Discovery Insure premium for that vehicle Santam There is a premium-relief support for a maximum of two months. Please see below the qualifying criteria for premium-relief due to unpaid premium as a result of the lockdown (Covid-19): - On risk with Santam for minimum 3 years. (Clients under 3 years to be referred) - No unpaid premiums in the last 12 months (up to and including March 2020) - Loss ratio below 70% over 3 years for Personal lines - Loss ratio below 65% over 3 years for Commercial Lines - Three claims or less in the 3 years excluding CAT claims Momentum A premium pause option will be available during, and continue after, the lockdown period. Upon reinstatement of the premium at any point, following the pause, MSTI will not deem the period as a break in cover with MSTI, which otherwise might impact the clients’ risk profile. Pro rata premiums will be charged from that day onwards and cover will be reinstated. Here is a list of discounts on premium offered by other insurers Standard Bank 25% Outsurance 15% Miway 10% Old Mutual iwyze 7.5% This compares favourably with international peers in the US, UK and Australia. If you would like us to do a comparitive quote please contact Edmond or Rethabile email: shortterm@daberistic.com tel: (011)658-1333 With most people at home or working from home, it is important to continue to look after your health and the health of your family. Although Covid-19 is now on top of everyone's mind, don't let the negative news and damaging effect of Covid-19 get to you. Stay positive, have a daily routine, do physical exercise, and take time to reflect.
Below we have put together useful health information: Government's coronavirus update and information website https://sacoronavirus.co.za/ Fitness Discovery Vitality Home Workout Channel - short 15-minute workout sessions https://www.discovery.co.za/vitality/vitality-home-work-out-channel Planet Fitness Online Group Exercise Classes https://www.planetfitness.co.za/register/ Cooking Discovery Vitality Home Cooking Channel https://www.discovery.co.za/vitality/vitality-home-cooking-channel Cooking channels and videos on YouTube To consult a doctor Momentum Talk to a Doctor on your phone Today is day 20 of the lockdown announced by President Ramaphosa. As we are in the 3rd week of lockdown, many people and businesses are affected, as people are not working and businesses are closed to operations. This leads to lost revenue and income. As a result, individuals and businesses are struggling financially during and beyond the lockdown period. In response to the government's call to action, most financial institutions have announced measures to provide financial relief. As the situation evolves from day to day, financial institutions continue to work with the government to reassess the situation, and further relief measures can be expected. We have gathered below links to financial relief measures provided by financial institutions, we hope these can assist you during this difficult period. Note that the information may not be complete or the most up to date. Please speak to the bank, the insurance company, your broker or financial advisor to confirm. Banks Covid-19 debt assistance: https://www.nedbank.co.za/content/nedbank/desktop/gt/en/personal/covid-19-debt-relief.html?cmpid=dis:ned:ret:debtrelief:banner:ned Nedbank's relief measures for individual and small-business clients, including information on payment holidays, the newly announced SA Future Trust Fund for SMMEs, and other Nedbank debt relief actions, can be found on https://www.nedbank.co.za/content/nedbank/desktop/gt/en/info/campaigns/nedbank-covid19-page.html Select 'Business' then 'Covid-19 Relief'. Nedbank remains committed to meeting your banking needs through this challenging period. Standard Bank: https://www.standardbank.co.za/southafrica/personal/campaigns/covid-19 FNB: https://www.fnb.co.za/press-office/index.html ABSA: https://www.absa.co.za/personal/covid-19/ Capitec: https://www.capitecbank.co.za/global-one/banking_during_the_covid_19_lockdown/ • If you're worried about your income or your ability to make your Capitec loan repayments, talk to us – we can help. To make a payment arrangement, dial 0860 66 77 18 to speak to an agent Life insurance companies (Do consult your financial advisor on the best option for your personal circumstances) Discovery Life discovery_premium_relief.pdf Option 1 – Premium relief option: Qualification rules: The premium payer must be self-employed, a business owner or an employee of such businesses facing severely reduced income themselves, in an industry that is not an essential service as defined in the Labour Relations Act. This applies to small and medium enterprises (SMEs) that meet the definition of a Small Enterprise in South Africa as per the Department of Small Business Development. The policy must have been in force for at least two years. The client must not have received a credit control letter in the past two years. The policy must have Comprehensive Integration with the PayBack benefit. At the moment, the policy's accumulated Surplus PayBack fund or Five-yearly PayBack fund has at least enough funds for two months’ worth of premiums. Policies that are in claim or have a claim registered that is being assessed do not qualify. Option 2 – Suspended cover option (Cover-pause): Qualification Rules: The premium payer must be self-employed, a business owner or an employee of such businesses facing severely reduced income themselves, in an industry that is not an essential service as defined in the Labour Relations Act. This applies to small and medium enterprises (SMEs) that meet the definition of a Small Enterprise in South Africa as per the Department of Small Business Development. The policy must have been in force for at least six months. The client must not have received a credit control letter in the past six months. Policies that are ceded (given as security for a loan) do not qualify. Policies that are in claim or have had claims submitted do not apply Option 3 – Underwriting-free servicing option: • A completed servicing quote is required (reduction) • Removal of benefits will not form part of the offer when up-servicing after three months, free of underwriting Important: • The form for options 1 and 2 must be completed by the policy owner and sent from his or her email address on record. A policy owner is able to contact the Call Centre, be verified and update their email address – 0860 00 54 33. Old Mutual helping_your_customers_during_lockdown_-_rsa_2.pdf Sanlam Liberty life insurance policies riskpremiumbreak_final_.pdf Investment policies investmentpremiumbreak_1pager_.pdf Momentum momentum_myriad_covid19_ppo_information_leaflet.pdf momentum_myriad_covid19_ppo_faq.pdf PPS pps_option_1.png pps_option_2.png Short-term insurance companies Discovery Insure discovery_premium_relief.pdf Santam Premium relief is only available once a client has lapsed their premium. We support all actions being done with clients to restructure their existing cover and reduce their premiums such that they do not have to lapse their policies. Dear Client/Stakeholder
In response to President’s Ramaphosa’s 21-day lock down announcement last night, please note that Daberistic will still be fully operational. All of our staff will be working remotely from Friday 27 March. Everyone will be available via switchboard 011-658-1333, on e-mails and WeChat. We will be using Zoom and WeChat for video calls when required. E-mails: For life insurance and investment queries, life@daberistic.com For medical aid, gap cover and Vitality queries, health@daberistic.com For commercial, car and household insurance queries, shortterm@daberistic.com To escalate a query to Office Manager, office@daberistic.com Daberistic will continue to provide you with exceptional service, we are 100% committed during this time. Over the last two weeks we have received a lot of client queries to apply for medical aid, business insurance and life insurance. We continue to assist clients to get them covered. Currently there is high demand on medical aid applications, please be patient; you will receive communication within 24 hours but the application may take time as our service providers are also in backlog with applications. On the other hand, we anticipate many clients to experience financial distress due to coronavirus, social distancing and lockdown. Please speak to your financial advisor or broker to discuss ways of reducing expenditure if needs arise, e.g. stop investment debit order, premium holiday, reduce premiums. We await the product providers to announce any measures they may take in response to the President's announcement, to ease the burden of consumers. It's time for us to help those in need, to reflect on our personal and business priorities. It’s time to rethink our values. Let’s heed our President's call to stay at home, have good hygiene habits, practise social distancing. Let's work together to triumph over Covid-19! Kevin Yeh Key Individual |
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