One of South Africa’s oldest entities is continuing on its path of success–always with the people it serves in mind.
Founded in Bloemfontein in 1918, AVBOB has since grown to become Africa’s largest Mutual Assurance Society, providing a one-stop funeral insurance and burial service.
It has been no mean feat reaching this status over a century into its existence, with AVBOB CEO Carl van der Riet putting the entity’s success down to its deep commitment to those it serves.
“Our mutual status sets us apart and it is the basis of our legacy as a leader in the funeral service and funeral insurance industry. It underscores our business model of sharing value and our profits with our members since we do not have shareholders. Our mutual status further strengthens our ability to provide additional benefits to our members,” van der Riet explains.
“AVBOB is led by a group of committed, experienced, and qualified board members who ensure that the Group delivers on its brand promise and maintains good governance in the efforts to create sustainable value.”
In terms of AVBOB’s operating environment, the organisation regularly assesses and analyses its operations in relation to its mission and vision. This enables AVBOB to identify the risks and opportunities its business faces and adjust the strategy and business model accordingly.
Armed with a strategy of growth, societal impact, service excellence, and operational capability, AVBOB aims to sustainably grow the society to return value to its members in the short, medium, and long term.
“Our primary objective has always been to generate sustainable growth and return value to our members. Our mutual status is the foundation of this objective and the cornerstone of our ethos, purpose, and competitive differentiation. Our members participate in the value we create, whereas other insurers are mandated to create shareholder wealth,” van der Riet adds.
The current status of AVBOB
AVBOB heads into the year 2024 on a strong footing, having achieved the following in the 2023 financial year, despite a difficult economic climate:
- Premium income increased by 8.6% to R6.2 billion.
- Total assets grew by 13.6 % to R39.8 billion.
- The number of policyholders increased by 2.3% to 2.6 million, with 8.6 million individual lives assured as at 30 June 2023.
- The national footprint of funeral service, insurance, and client service offices increased to 379 in total.
- The society invested R861.6 million in targeted investment and black business growth opportunities.
“Our short-term goal is to build on the gains we have made to strengthen our capacity for further growth and to pursue new opportunities through product, service, and channel diversification,” van der Riet explains.
“Attracting customers with innovative, market-appropriate products, and quality service is key. To remain a leader in the funeral industry and to consolidate our growth in market share, the group continues to invest in expanding our national footprint and improving our client service capabilities.”
“We continue to focus on income- and value-generating business areas. Our customers’ fast adoption of our digital distribution channels and platforms, and the roll-out of self-service digital engagement platforms, remain on track and show positive results. Our digital insurance sales application solution was successfully adopted. It makes fast and effective new business processing possible for our financial associates and brokers.”
As a resilient and innovative South African heritage brand, van der Riet is confident in the group’s ability to deliver on its promise to be there for its customers and fellow citizens. This includes AVBOB’s impactful Corporate Social Responsibility initiatives, which have helped thousands of South Africans in various ways.
Some of these initiatives include:
- Early Childhood Development (ECD): The AVBOB Early Childhood Development (ECD) programme has invested in identified ECD centres across South Africa to provide safe and healthy environments conducive to learning.
- Container Library Project: Since 2013, 68 container libraries have been donated to communities across South Africa.
- #RoadToLiteracy Trolley Library Campaign: 440 trolley libraries filled with books donated at a value of R23 million to date.
- Zero Hunger: Providing basic meals to communities in need since 2020 through the sponsorship of Soul Food branches in Tshwane and Gqeberha.
- Enterprise and Supplier Development: AVBOB Industries provided a black-owned company that manufactures coffins and caskets with R3 million in seed capital to expand their business.
“Our business success lies in our people and their efforts and contributions to support our business and secure the future of the group. We remain responsive to evolving trends and the focus that global standards demand on both a strategic and operational level. As such, we remain the only organisation that can provide a full-service offering of funeral insurance, funeral services and products,” he avers.
Tackling challenges head-on
While AVBOB has been successful across various avenues, the journey has not been without its challenges. During 2022, the business transitioned through the COVID-19 pandemic and came to terms with its aftermath and the longer-term impact, only for unprecedented social unrest and natural disasters to test the entity’s resolve.However, what must be highlighted, according to van der Riet, is the ability of AVBOB to navigate through difficult times.
“The COVID-19 crisis brought forward years of change in the way companies do business, which has led to a shift in customer expectations. This is a challenge we have dealt with expertly,” he states. 2023 was another challenging year, highlighted by the need to create value and sustainable economic growth in South Africa as an imperative. With one of the highest income differentials and an unsustainably high level of youth unemployment, South Africa faces daunting challenges, which impacted AVBOB’s operational and strategic direction, as listed below:
- Volatile markets and future growth prospects remained under pressure.
- Ongoing uncertainty and increasingly complex business and electricity challenges.
- Changed customer behaviour due to financial pressure from reduced or lost income.
- Managing changed customer behaviour with responsibility to the business and with empathy to our members.
“The impact of these challenges is twofold. Firstly, we have to do more with less and, secondly, we have to cater to the needs of the consumer of the future–the enlightened customer–who business analysts say is already among us. The first challenge requires consolidating existing investments and assets while the second requires prioritising digital investments as a main business continuity measure,” van der Riet explains. “Consequently, the current socio-economic landscape necessitates leveraging the assets and investments we already have in place, but it also requires building on that foundation by innovating and reimagining how we do business.”
2024 and beyond
This past year marked the final chapter of the AVBOB Head Office in the Pretoria central business district. In 2024, the Head Office will be moving to a new, state-of-the-art building at the Irene Link Precinct in Centurion. The building is sustainable, fit-for-purpose, and Green Star-rated to meet AVBOB’s business requirements and house their hybrid workforce.
“It will also further our efforts to provide and maintain a world class working environment for our employees, which is endorsed through our Top Employer certification,” van der Riet says. Another key focus for AVBOB and van der Riet is transformation. While transformation and inclusivity are in focus worldwide, AVBOB’s commitment is underlined by their Level 1 B-BBEE rating.
While 2024 is set to be another bumper year for AVBOB, what is the focus beyond that, looking to the next decade?
For van der Riet, the answer is always providing value to the members in all that AVBOB does.
“We want to give more value back to our members, make more impact to the communities in which we operate, be a company that is responsive to societal needs, strengthen our connection with society, and give our members a wider diversity of products and services,” he concludes.
