3SIXTY Life has expressed the hope of exiting the period of being under curatorship in the next three to six months after surviving “one of the most difficult years” following the appointment of a final curator in March.
The funeral insurer is finalising its annual statements for the 2020 financial year, which should be released by the end of May, followed by the 2021 and 2022 annual statements, hopefully before the end of the year.
Khandani Msibi, the acting group CEO of Doves Group Holdings, 3Sixty Life’s parent company, sat down with Business Report on Friday to outline the process that they have gone through to turn this business around during the he termed “one of his most difficult years in his career”.
Msibi said 3Sixty Life was coming out of curatorship better-than -most expected in spite of being starved of taking on new business during the period.
“The future of 3Sixty Life is really looking up from the numbers that are coming out. I mean, just looking at the performance of Risk Life last year, it made a significant profit and was able to generate eight times the amount of cash than it had when it was put under curatorship,” Msibi said.
“We are sufficiently aligned with the new curator [Fagmeedah Petersen-Cook] in terms of the direction of this process. I think the hold up now is the conclusion of the annual financial statements for 2020, 2021, and 2022.
“We have a new auditor and this new auditor will finish 2020 by the end of this month, and then will do 2021 and then 2022. It should not take a long time.”
3Sixty was placed under curatorship in December 2021 by the Prudential Authority due to an unconvincing recapitalisation plan and was prohibited from taking on any new insurance business.
The Prudential Authority said 3Sixty had failed to maintain its business in a financially sound condition by not holding funds at least equal to the minimum capital or solvency capital requirements.
The company attributed this to higher-than-usual claims as a result of and a shortfall in its budgeted premium income, both as a result of the Covid-19 pandemic and related lockdown restrictions.
Msibi said insurance companies that had been put under curatorship ordinarily get liquidated within three months because they started by losing clients, failed to meet their overhead costs, and finally could not pay out claims.
“That has been the experience of all insurance companies. The curatorship that we are under is unprecedented in the history of this country, that insurance you have a curator for more than 15 months and the business is healthier,” he said.
“But what we did over the years, we built what we call the antifragility into the business. We've lost external clients, but we are fortunate that in our portfolio of business, the internal channel made up 80% of the business.”
Msibi said they had to make lots of sacrifices during this period to ensure they did not retrench even one employee and gave small annual increases in spite of not being allowed to sell new business, which had prevented the company from growing.
He said the previous curator, Yashoda Ram from the financial services division of BDO, had been crucial to buy the company time to turn around the business.
“I think Yashoda was very critical to our survival in a sense that at the very time that she took over, the momentum was strong towards the liquidation of a 3Sixty Life, but she was able to buy us time to a point where we are now - where all our interventions to save the business have paid off,” Msibi said.
“Where we are now, 3Sixty Life has been able to partially capitalise itself through performance based on the support that we've given to it and the actions that we have taken to actually bring it back.
“So, this outcome vindicates us that we made the right decision to oppose the curatorship of 3Sixty Life in that we are now able to prove that it is not a business that should be abandoned and eventually liquidated.”
BUSINESS REPORT