Giving dignity in life and death

During 1918, the Spanish flu, which ran rampant toward the end of World War I


During 1918, the Spanish flu, which ran rampant toward the end of World War I, inspired the start of an informal burial society, which has become South Africa’s leading mutual assurance society

AVBOB started with less than 100 members in 1918 and by 1936 had rapidly grown with close to 90 branches being established and more than 24 000 members on its books. Today, AVBOB serves every community in South Africa and insures more than six million lives.

AVBOB Mutual Assurance Society

Frik Rademan, AVBOB CEO shares, “What makes AVBOB really stand out is our mutual status. This has played a large role in our growth, and as one of the few remaining mutual societies in South Africa, we are able to offer benefits to our policyholders that our competitors simply cannot match.”

As a mutual assurance society, AVBOB has no shareholders and, instead, shares its surplus profits directly with its policyholders in the form of special bonuses and Free Member benefits. This has been a key differentiator for AVBOB and over the past 11 years alone, they have shared R10 billion with their members.

AVBOB offers a one-stop solution, which is also a key contributor to their business differentiation.

“Our three main service offerings serve to ease the financial burden on mourning relatives, from life and funeral insurance cover to funeral services from more than 330 branches countrywide. Our factory, based in Bloemfontein, manufactures coffins, wreaths and other funeral-related products. To show that the Group is on an upward trajectory, “In 2009, we celebrated our millionth policyholder and by our centenary year in 2018, we had topped the two-million policyholders’ mark, with more than six million lives currently covered by the society,” says Rademan.

‘’Amongst other initiatives, our Free funeral benefit contributed significantly towards our successes. The Free Member benefit offering is currently valued at R16 000.

“This member benefit is paid to policyholders over and above the insured value of a policy and includes a free basic funeral, free transportation of the deceased within the borders of South Africa and R2 500 cash upfront to assist with funeral expenses, provided that the funeral is conducted by AVBOB Funeral Service,” he explains.

In August last year, AVBOB declared R3.5-billion as a special centenary bonus to its members by means of a new feature, the AVBOB Reward Account (ARA).

“Our members can now claim the funds allocated to their ARA in cash after the main insured individual reaches the age of 65, subject to conditions. What makes this truly exceptional is that people can claim their bonus while they are still alive. In future, special bonus declarations will be used to increase the ARA values,” he says.

AVBOB, as with most companies weathering the difficult economic climate in South Africa, is accustomed to dealing with the complex challenges of a rapidly changing society.

“We’ve seen everything from changes in technology to the shifts in customer behaviour and growing competition from new market entrants. But there will always be a need for funeral policies and other services relating to funerals.

“What makes the South African funeral services industry unique is the fact that it is made up of micro, small, medium-sized and large enterprises serving local markets. And because the sector is not regulated, undertakers are not required to register with industry bodies. This means that there are many informal operators, which are becoming widely supported by an indeterminate number of stokvels and burial societies. The problem here is that when these operators cut corners, it gives the rest of the industry a bad name,” Rademan says.

However, he believes that AVBOB has been able to overcome many of the current market challenges by demonstrating the giving of dignity in life and death. The thousands of deaths left in the wake of one of the modern world’s most deadly epidemics, the Spanish flu, inspired the start of what is today South Africa’s leading mutual assurance society benefits of being a true mutual, creating real policyholder value compared to other insurers that are more concerned with creating shareholder wealth.

For the love of literacy

While dedicating the majority of his career to ensuring AVBOB policyholders receive the maximum benefit from their investments, Rademan’s passion extends much further, spilling out into the communities around him. A project especially close to his heart, AVBOB’s groundbreaking national Poetry Project, comprises a dedicated website and a prize-winning poetry competition which embraces all 11 official languages, enabling thousands of aspiring and established poets to receive recognition for their craft.

Poets are invited to submit their work online and are encouraged to offer unconventional formats and approaches in this annual multilingual competition. An anthology of the top entries plus some commissioned work, I Wish I’d Said, has been published. Due to the resounding success of the competition, the Group decided to make the AVBOB Poetry Project an annual competition.

“The project was started with the intention of helping families deal with their grief, and one of the first questions we are often asked by family members when it comes to planning a service is ‘What do we say?’. It was also very important to us to have all 11 languages represented in the book. The anthology is made up of poems written by the first and second place winners in each language category, as well as 77 poems specially commissioned by AVBOB from South Africa’s most notable poets,” Rademan says.

AVBOB’s Corporate Social Investment (CSI) efforts are heavily focused on improving literacy in South Africa. Actively engaged in the communities in which they operate, they have donated 53 of 60 container libraries pledged to underprivileged schools, worth approximately R500 000 each, to date.

“These container libraries are constructed at our factory in Bloemfontein and AVBOB works closely with the Department of Basic Education to ensure we provide books in the appropriate languages for each school. We also plan to slow down the rollout of new container libraries as we go back to those already donated where we may need to conduct renovations or upgrades.

“So far, not a single container has been damaged and out of these 53 libraries donated, I have been there to launch 50 in person because, for me, it is very important that I go myself so that I can see what’s going on in the community and make sure that we assist where we can,” he says.

AVBOB has also pledged to invest R150 million for the refurbishment and upgrade of rural schools across the country, in partnership with the Department of Basic Education, with a portion of the funds allocated to the upgrading of sanitation systems and the eradication of pit toilets in six Mpumalanga schools.

“This may seem like a drop in the ocean, but it does help. I imagine that trying to fix all of these issues alone is a challenge too big for the government to tackle on its own. I can see the difference we are making, it’s unbelievable, but it still pains me that we can’t do it for everyone in need,” he says.

The company also invests in a number of other secondary community projects aimed at social upliftment. The AVBOB Trolley Libraries is just one example, where they have already donated around 35 of these mobile wooden bookshelves, also manufactured by AVBOB Industries in Bloemfontein. The AVBOB Foundation has also adopted the internationally acclaimed Mzansi Youth Choir. Established in July 2003, the choir provides talented underprivileged teenagers and young adults with the opportunity to perform locally and abroad.

“Since its inception, the AVBOB Foundation has really instilled a great sense of pride in me. It’s something I started seven years ago and it has grown into something much bigger than I could have imagined at the time. I believe that If you are a big corporate in South Africa, it is imperative that you do the right thing, especially when you have built a name for yourself.

“Our business model is also sustainable in that it empowers branches. Through our semi-franchise model, we are able to supply infrastructure while staff work on commission, they employ their own services and as a result, empower both their own staff and surrounding communities by supporting other businesses who provide flowers, catering, etc. This helps to support thousands of people in South Africa and we want to continue to grow our footprint in respect to the number of branches, we will be better equipped to empower more of the previously disadvantaged,” Rademan says.

Rademan, who has been with the AVBOB group since 1982, started his journey with the company as their Financial Manager, moving his way up the ranks until he was appointed CEO in 2011.

Remembering the first time he was invited to an interview at the factory in Bloemfontein, he laughs as he recalls how sceptical he was of the idea of working in the funeral industry.

“Back then, it did not cross my mind that I would climb the corporate ladder. I never had the ambition to be the CEO, I just wanted to progress in life. I worked at the factory for seven years before I was transferred to head office as a Finance Manager, and later the Financial Director. I was then appointed Managing Director of the Insurance Division before my appointment as CEO of the group.

“In these last eight years, I think we have made great strides when it comes to transformation, and AVBOB has now become a place where people want to work. We are a respected organisation within the finance sector, and I’m very proud to be a part of this,” he concludes. 

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Issue 83


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