DUTY OF CARE - JSE MAGAZINE

DUTY OF CARE

AVBOB CEO Frik Rademan on growing the mutual assurance society into a household name without abdicating its responsibility to its 2.1 million members

Over the course of its 101-year history, the AVBOB group has demonstrated remarkable resilience to change, responding to market- and life-changing events with one constant directive: to care for the needs of its members.

After the end of the First World War in 1918, for example, more people died in a single day from the Spanish flu than had previously died in any normal month. These were numbers that almost crippled AVBOB, then an informal burial society in Bloemfontein that had been created three years before, by and for the poor. ‘To keep the society alive, the founders worked for free, stalwart in their belief that everyone deserves a decent funeral,’ says CEO Frik Rademan. ‘In so many ways this selfless act cemented the path that AVBOB has followed over the decades, which is to ensure lives are cared for, even in the event of death.’

It was the passing of the Private Act, Insurance Act, No 7 of 1951, that allowed AVBOB in 1951, to transform into the mutual assurance society that it is today, the largest in Africa with 2.1 million policyholders and 6.4 million lives covered. Rademan says it took 92 years to reach the 1 million benchmark, but only eight to double it, which was during his tenure at the helm. ‘Our assets simultaneously increased from R4 billion to R18.5 billion, which is a growth of 340%. I’m in awe of this because it means we have been able to increase the manner in which we distribute care for our policyholders, actioned through benefit schemes – some of which are free – and special bonuses.’

Over the past 11 years, AVBOB has shared R10 billion with its policyholders, largely through special bonuses and a free funeral benefit worth R16 000, which is over and above the insured value of the funeral policy. The benefit includes a free basic funeral to the value of R11 000, a R2 500 upfront cash payment to assist with other funeral expenses, and free transport of a deceased person within the borders of SA. One of the terms and conditions is that AVBOB conducts the funeral.

AVBOB CEO Frik Rademan

By nature, mutuality ensures that special bonuses can be distributed to members, as opposed to shareholders, which is why AVBOB has over the years, resisted listing, because as Rademan says, it is not to the benefit of our policyholders to demutualise. ‘When AVBOB turned 100, for example, we released R3.5 billion to our policyholders, in effect creating the AVBOB Reward Account for those that have been on our books for a minimum of 10 years. It’s an investment policy that pays them a benefit when they retire, and is the only funeral policy in the world that does this.’

AVBOB’s marketing strategy is focused entirely on mutuality, and not just members benefit but also communities. ‘It’s very important to demonstrate our commitment to the people of our country,’ says Rademan.

The AVBOB Foundation was created to enable CSI projects, particularly those that embrace literacy, one of which is the roll-out of container libraries to underprivileged schools. ‘Initially the goal was 10, but we’ve upped this to 60, of which 55 are already operational. Each recycled shipping container houses more than 3 000 books, and operates off of solar panels. We have also pledged a R150 million investment into the upgrade of rural schools, R15 million of which is allocated to upgrading sanitation and the eradication of pit toilets.’

Literacy upliftment is also driven through Trolley Libraries that have a capacity for some 500 books These are designed and manufactured by AVBOB Industries in Bloemfontein, which also produces funeral ware such as coffins, caskets and wreaths.

Close to Rademan’s heart is the AVBOB Poetry Project. He explains why: ‘Death and funerals are very emotional. A funeral is an act of closure; an affirmation that death has taken place, and for the bereaved this can be a difficult time to find words. We are often approached to help with the compilation of funeral letters that honour loved ones who have died. One of the key objectives with the competition was to provide customers with a repository of poems, available on our website from where they could find inspiration in times of great emotional stress.

One of the 60 container libraries funded by the AVBOB Foundation. The libraries serve underprivileged schools

‘We created this poetry project as part of our centenary celebrations, inviting submissions written in all 11 official languages. One hundred were selected for translation into English and published in the inaugural anthology of 2018, which won numerous literacy awards.’ This year AVBOB produced the second edition, featuring 101 poems from 30 000 entries. Responding to the needs of the mourning, be that through words or the funeral service itself, means AVBOB has to be within easy reach of its members. An intense expansion strategy has resulted in 340 branches countrywide, including AVBOB funeral parlours, run by entrepreneurs who are supported individually by an investment of about R2 million, which covers infrastructure, vehicles and training. It’s an empowerment structure that has far-reaching benefits for local community businesses that supply the non-core add-on services of catering, flowers and other special needs.

‘Death awareness requires our people to insert themselves with great care in the decision-making and advice process of leading to a dignified send-off of the deceased,’ says Rademan. ‘Funerals today require us to be mindful of preserving traditions, which sometimes includes designing specific coffins featuring the face of the deceased, or even the inclusion of ostrich skin.’ Rademan adds that ‘funerals may be one of the most expensive purchases of a household because cultural rituals around death and funerals are a true collective experience, enabling families and communities to come together and recognise that part of life’s experience is to face and accept the reality of death.

‘We understand that no matter the financial position of grieving relatives, a funeral does not need to reflect their economic status. AVBOB policies address those financial needs, in life and in death.’

Rademan is retiring at the end of November and, in true AVBOB style, which is in the softest and most deeply caring way, he departs with honour and a genuine love for the company for which he liberated growth over the past decade. There’s no need for him to say how hard it will be to let go, it’s in his voice; and in his legacy of transformation. He truly has made AVBOB a household name.

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