Rand Mutual Assurance

DECEMBER 2015www.endeavourmagazine.com

INSPIRED BY YOUR SUCCESS

Rand Mutual AssuranceThe Foundation For Another 120 Years

For over 120 years, the South African mining industry has been mothered by Rand Mutual Assurance who have become the industry administrator of choice, providing worker’s compensation for mining industry employees injured during the course of their employment.

WRITTEN BY JACK SLATER

SETTING THE FOUNDATION FOR

ANOTHER 120 YEARS

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RAND MUTUAL ASSURANCE

CEO Jay Singh explains, “At the time there was no injury insurance cover for those working in the new gold mining industry,” he says, “But there was a demand and the only

country in the world that offered workers compensation was in Germany.”

Although safety standards have been improving for miners year-on-year, the industry is still considered one of the most dangerous, with 84-recorded deaths in 2014 alone. It is Rand Mutual’s responsibility to ensure the safety of these workers across all areas including the companies mining coal, diamond, chromite, vanadium and the platinum group metals.

THOROUGH COVERRand Mutual’s license is granted in terms of the Compensation

for Occupational Injuries and Disease Act COIDA. Implemented in 1946, the Act makes it compulsory for employers to contribute to insurance employees against potential injuries and Rand Mutual is the body responsible for administering to this directive.

“As a mining worker you can choose to buy your cover from the Government or from Rand Mutual; just like in construction where you can choose the government or FEM,” explains Jay, revealing that in effect Rand Mutual’s greatest competitor is the Government itself.

Dealing exclusively with large corporates, their client list is packed with industry leaders and global majors, such as Anglo Gold Ashanti, Anglo Platinum, Anglo American as a whole, Harmony Gold, Lonmin and BHP Billiton.

Jay goes on to reveal that in order to keep their competitive edge, Rand Mutual tailors its offerings to the varying needs of their impressive client list, “We have to make sure we pay at least what the legislation says. So we have built other products around COID, for example our workers compensation scheme has a number of

components - medical aid, injury while on duty and a disability calculation resulting in a lump sum or pension,” he says.

“COID says that a pension should be based on a person’s salary, but the salary is capped at R26,000 per month. We’ve taken the cap away and will base the pension on your actual salary even it is it R1 million a month rather than the minimum of R26k.”

“We’ve created a lot of value-adds, COID doesn’t cover travel to and from work and we’ve added that as a product. If you’re injured while going to work or coming home from work or travelling on business then we can provide that cover too - this is particularly significant in South Africa where a lot of people travel by Taxi.”

A LITTLE EXTRA To underpin Rand Mutual’s general assurance offering by

managing pensions, RMA Life Assurance Company (RMA life) was established and recently celebrated its first decade of caring for its disabled pensioners by a way of a mobile clinic that travels the length and breadth of Southern Africa.

Working with its prosthetic partner, Merissa Nel and Associates, Rand Mutual has completed 10,000 prosthetic reviews through its mobile clinic since it began the service, helping beneficiaries in rural, remote areas who otherwise may not be able to assess the right care.

CROSSING BORDERSJay says that over 160 staff work for Rand Mutual and six offices

in total are overseen around the country, with three satellite offices in the Eastern Cape, Mozambique and Lesotho, from its head office in Johannesburg.

“In South Africa and neighbouring countries most of the miners come from very rural areas; rural parts of South Africa and rural


Mining makes up one third of the market capitalisation on the JSE (Johannesburg Stock Exchange) and is one of the root industries on which the South African economy is based. It is central to the South African economy and Rand Mutual has grown and development with it since the company’s founding in 1894.


parts of neighbouring countries and that is why we have a number of small or satellite offices.”

Migrant workers make up a significant number of the employees working in the mining sector in South Africa. With workers travelling from Lesotho, Botswana, Mozambique, Swaziland and Zimbabwe, insurers have to find ways to manage the complexities that this creates.

“Looking after cross border workers and ex workers is fairly complicated,” explains Singh, “For example, if there is a mining accident, the widow may not fully understand she is entitled to receive benefits. It is our responsibility to find and identify the widow, make sure that there is no fraud and pay her. And the difficultly, so often, is in tracing the dependents and the beneficiaries.”

GROWTH AREASThe South African Government may hold the title as Rand

Mutual’s main market competitor but their goals are the same and recent times have brought about a need to be engaging together. Especially when it comes to improving national welfare insurance mechanisms, particularly its IT system.

“It is a key area for us in terms of expansion that surrounds the licensing of our systems,” Jay explains, “We’ve built a COID system and the Government does the same things as us but their compensation fund system is not the best, so we see that as a potential market.”

This scheme could easily be marketed throughout Africa as there isn’t a good system anywhere on the continent that administers workers compensation benefits as efficiently. As such the Government are already piloting a number of Rand Mutual’s IT systems with the potential of adding some ten million lives onto the system.

Rand Mutual is a company that prides itself on being technologically forward and has improved upon its online platforms over the past year to offer several new functionalities and services to stakeholders and continually pursues opportunities to license its IT systems to third parties.

In other areas of development, a parallel focus for growth at the company is an extension of its COID license to include the metal sector as they have been operating more or less as an exemption from current legislation and until last year this was on the basis that they could provide this service only to the mining industry. Jay says that it was an obvious move considering what they were able to offer with the mining and that they should replicate that within the metal industry too.

“Replicating our business model into another sector is the quickest and easiest way to expand, potentially increasing the 400,000 lives we currently insure by 600,000,” he says, “We have already started making presentations to the bigger potential clients,

understanding motivations and doing analysis and signing up half a dozen. This year we expect to take on at least 100,000 lives.”

In terms of expanding the company’s footprint further into sub-Saharan Africa, Jay explains that there are a great deal of Governmental complexities to be taken into account, “As an example, if we were to offer our products in Zimbabwe, the Government would insist that the money didn’t leave Zimbabwe and would have to be insured with a local insurance company. We would also need to prove that this type of insurance is not already available in the country.”

He says that while there are many plans for the future, that some things benefit from more research than others and that some areas simply are not ready for such advancements.

PEAKS AND TROUGHS Rand Mutual business had grown parallel to the nation’s mining

industry over the years, “pre-2008 we may have had 90% of the mining business and we would try to convince the remaining 10% to join us. There’s quite a bit of diversity within mining; look at gold. Six or seven years ago it was in decline while platinum was


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growing like crazy. Since 2008 platinum has not grown, but the coal industry has. The international demand for coal is so great that no one country can meet it. As a result we have seen a lot of new employees in the coal-mining sector. So growth in one industry offsets a decline in another.”

PEOPLE POWERJay emphasises that Rand Mutual’s employees form the

backbone of its company and are the basis for its success. The company’s employees have a wide range of skills across all the areas it services, especially regarding the medical nature of the company.

“We have people who assess a disability, maybe people who have been in a mining accident and are injured. For this we have medical doctors gaining an occupational health qualification. They will measure disability and review our patients. Supporting these doctors are senior nurses.” He explains.

“We employ people to capture claims who are usually more junior in their roles but need an understanding of medical terminology. If there is a claim, our people can quickly relate to the injury, when they are capturing the claim or processing a doctor’s

invoice. Then of course we have financial people, administrators and IT people. Our IT people are highly skilled. We do all of our IT development in house.”

“It’s like any other company; we have a cross section of skills. The main difference is our medical expertise and the training that we provide in that regard. For example; our doctors are trained and understand occupational health but we skill them in terms of worker compensation, legislation and all the systems that go with it too.”

He explains that they offer training to all the mining houses that are covered and the labour organisations because it is very important that they understand the benefits, so when there’s a query they know exactly how to report it.

120 years have seen a great deal of change to the industry but by staying ahead of the game and looking to always develop those keen relationships Rand Mutual are set to be shaping the next 120 years too.

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