The Zimbabwe Association of Funeral Assurers (Zafa) has authorised members to review their premiums upwards in a move that will see people folk out more for funeral services. We spoke to the biggest player in the sector NYARADZO Group founder and chief executive officer Philip Mataranyika on his thoughts about the developments.
This also coincides with the funeral assurer’s 18th anniversary so he also takes us through the 18-year-long journey and what lies ahead for the group. Here are the excerpts of the interview
Q: The Zimbabwe Association of Funeral Assurers (ZAFA) indicated last month that it has consented to an increase in premiums. What gave rise to the decision?
A: We applaud the Zafa executive for coming up with the premium increase position, which, in our view, will help member organisations preserve service value given to clients in cases of bereavement. What Zafa did is to announce an industry position. It is now up to individual members to establish quantum. As Nyaradzo, we are now closely reviewing our premiums and assessing by how much we can adjust our premiums.
Q: But as the biggest player in the industry and give the current state of affairs economically, do you agree with submissions by Zafa?
A: As highlighted by Zafa, there is a compelling and urgent need to preserve the value of funeral policies and to maintain the quality of service delivery to clients. For us, that is what is most important as funerals, by their nature, are difficult for the bereaved, let alone having to worry about the logistics and coordination of resources. We, therefore, need to ensure that we can offer our clients an uncompromised dignified send-off.
This is why the association consented to a request by members for premium reviews that have been necessitated by the current macro-economic instability, which has seen premiums being devalued at the expense of clients.
Q: To what extent has Nyaradzo, as a significant industry player, been affected by the current economic challenges?
A: As experienced by most businesses, our expenses have been going up across the board, putting pressure on margins. Look at the cost of fuel, for example, it has increased by over 150 percent in a period of two months.
For those of us with a fleet of buses and hearses, you can imagine the impact on overheads; more so, if you add the cost of spares, service and tyres et cetera. In addition to this, the devaluation of the local unit on both the official and alternative market has put unbearable pressure on imported items such as mortuary equipment, spares, and chemicals et cetera, which we need for our day-to-day operations.
Q: Are we, therefore, likely to see the full cost being passed on to the policyholder?
A: That would be inconsistent with our values. We are aware of the difficult situation that our clients find themselves in, hence, we have been considering and implementing other strategies to absorb the cost increases without passing on the full impact to our valued clients, without whom we would not be in existence.
We have been improving on operating efficiencies, cutting costs and diversifying our business portfolio to broaden our income streams and spread the cost base. But having done all this, it is unavoidable that the client must also come to the party by carrying part of the cost burden.
Q: Will the business survive if it doesn’t pass the full cost to the client?
A: Our biggest advantage is scale. Yes, the operating environment has had an adverse impact on the business, but not as severe as it would have been if we were still of the size we were in 2001. Because of economies of scale, it is in our DNA to do everything practically possible to make life easier for our clients. As a business, we strongly believe in respecting contracts and remain mindful of the fact that companies are created to exist into perpetuity while individuals live only for a limited time.
A loss to an individual is real and final while that to an organisation or company, real or imagined, can be recovered with time. For this reason, even as we shall be reviewing our premiums, the margin will not reflect the full extent of the cost impact we are incurring so as to achieve a balanced outcome, whereby the quality of service will be maintained without overburdening both the business and the client.
Q: When are the premiums being reviewed?
A: We are looking at the end of May paying for June.
Q: You have been in the news lately, conducting the burial of legendary musician Oliver Mtukudzi yourself. Why was it necessary for you to take that odd step? Some say it was a marketing gimmick. Do you agree?
A: Funny how with social media things can be so easily misconstrued. Honestly speaking, it really wasn’t the first time that I performed the role of an undertaker. I have been performing undertaking duties from when we started.
Secondly, once in a while, I also chip in to help my undertaker colleagues at Nyaradzo Funeral Services, as can be attested by those who attended the late Paul Chingoka’s funeral last year. Coming back to Mukoma Tuku’s funeral, he was a cherished friend who mentored us as young boys through the pain and comforts of life as we grew up in Highfield, hence, I felt I needed to stand by him right through to the moment when we laid him to rest at his rural home in Madziva.
Q: Nyaradzo recently turned 18, what does that milestone mean to you?
A: Age 18 is significant. Worldwide, it is considered as the legal age of majority and gives one the right to vote. For us at Nyaradzo, it is a reminder of an exciting journey that our clients, the organisation and all its stakeholders have travelled. It was on 1 March 2001 that we opened our doors to the public as Nyaradzo Funeral Assurance Company (NFACO).
Looking back at the years gone by, it has been a thrilling journey so far, filled with as many highs as there have been lows, all of which have helped shape us to be the organisation that we are today. We are eternally grateful to our customers as they have faithfully supported us through it all.
Q: Looking back, what would you say of the journey?
A: It has been memorable. Having started with NFACO, we reached another landmark in 2003 when we added Eureka Insurance Brokers to the business. Today, the group boasts of several other units, among them Nyaradzo Life Assurance, Calundike Exports and Sahwira Events.
We have grown into a sizeable organisation with a staff complement of over 1 500 employees and more than 42 service centres and branches countrywide, many of which we built from the ground up. We now also have a regional presence in Randburg, South Africa, and soon we will have a global presence with a branch in England.
Q: It’s a remarkable growth considering our difficult operating environment. What underpinned that growth?
A: Our growth and diversification have been fuelled by two key brand-building pillars that have remained constant. One has been our drive to meet our customers’ needs with relevant and cost-effective solutions, the other is our vibrant and dynamic team.
We are blessed to have a bunch of young, talented, hardworking and caring people with a heart for service that has grown over the years to become a family in many ways, standing together through the good and bad seasons.
Q: Any regrets?
A: Our only regret is that we have not been aggressive enough to export our services to more countries in Africa. We believe our model is a relevant solution for Africans everywhere and that we must take it to their shores and doorsteps. Sadly, the economic environment has not been very helpful in that regard, but we take it as ammunition to strive that much harder for global expansion.
Q: What were the highlights?
A: What stands out the most for me when I look back at our history are the principles, values and traditions we have upheld as an organisation. What was fundamental and will remain so as we look ahead to another 18 years plus of service is our focus on customer needs. Being able to provide a service that serves a need and is relevant truly makes all the difference.
It is in this regard that we will continue to dedicate our best efforts to deliver exceptional service that is in line with our culture and African traditions. In other words, ‘Maringe ne tsika dzedu’ Iye Sahwira oramba ari mukuru. As an organisation, we have made it our business to listen to our customers, sought to understand them and in turn, adapt our service delivery to best suit their varied tastes. If there was any holy grail in business, this has been it. It is what kept us going when the chips were down, when everything looked bleak and doors were shut right in our faces.
Q: What does the future look like for the Nyaradzo Group?
A: I wouldn’t want to pre-empt new products and services that my team is working tirelessly and quietly on. But as I have already hinted that we are establishing beyond borders and locally we are in the process of finalising our outdoor camping beds and tents package.
Soon, our clients will be able to add these to their policies, enabling friends and relatives to experience comfortable sleeping arrangements at big family gatherings. More is in the offing…watch this space! Sunday Mail.