Thursday, May 6, 2021

BONA LIFE aims to list with Botswana Stock Exchange

“I want Bona Life to be an example that you can create a citizen company from nothing and make it into solid company,” proclaimed Regina Sikalesele-Vaka in an exclusive interview with Sunday Standard. Such words cannot be treated with a sense of disdain because her entrepreneurial spirit gained dominance at a time when her business prowess was severely put to the test. A new company name, a shifted focus in the market and new shareholders is today what Sikalesele-Vaka is captaining to herald what might become known in history as: The first publicly listed citizen owned company in Botswana’s financial services sector. Sikalesele-Vaka divulged the future of Bona Life as a Botswana Stock Exchange listed company in the next five years following which expansion into the region will take place. Bona Life is so far the only indigenous life insurance company in Botswana.

When Regina Sikalesele-Vaka ventured Life insurance Company, then called Bramer Life, the plan was to give the local market a dose of what it had never experimented with. This was because of a majority ownership (80 percent) of Bramer Life by a financial corporation with a Mauritian heritage, British American Investment Corporation (BAI Co), which positioned it to benchmark on insurance products offered in Mauritius that had not yet been introduced in the local market. Hardly a year into the game plan Bramer Life suffered a tumultuous financial scandal blow. The financial misconduct by Bramer Banking Corp limited (BBCL), a sister company to BAI Co exposed Bramer Life to scrutiny and suspicion of the extent of its involvement in the disgraced scandal. Sikalesele-Vaka dexterously reacted to the news with a vehement voice that distanced Bramer Life from the mishap. She unwaveringly declared the above board business operations of Bramer Life and stressed that its link to the scandal was only by association to its shareholder and not by involvement. The regulator, NBFIRA, acted accordingly and imposed statutory management over Bramer Life as a measure of protecting the interests of policy holders. The financial impropriety led Bramer Life to open its doors to new shareholders after BAI Co was found not to be “fit and proper” by the Mauritian Authorities. New shareholders meant a new direction but Sikalesele-Vaka insists that opportunities such as flexibility in the collection of premiums and designing products that talk to people which existed in the original plan have not changed. She explained that the products that had been developed over the year that Bramer Life had been trading will continue but as improved and re-branded products in accordance with market feedback. She however emphasized that Bona Life has a new focus on pension, annuity and funeral products, a market that its new major shareholder (40 percent) Botswana Public Officers Pension Fund (BPOPF) comes with given that it was previously not available in the original set-up.

The new approach according to Sikalesele-Vaka is community focused which involves identifying what works within different groupings which include burial societies and churches and tapping into their infrastructure so as to provide them with tailored products. She cited the example of the informal sector, which she admitted is very difficult to cater to given its seasonal income stream and unstructured business operations but however guaranteed that a gradual approach will be used to distribute products to people within that sector.

Bona Life’s competitor, Botswana Insurance Holdings Limited (BIHL) decried that annuity is an unpredictable business line at its financial results briefing last month. Sikalesele-Vaka on the other hand indicated that Capital Management Botswana (CMB)’s ownership stake (25 percent) in Bona Life gives it a competitive edge given its highly specialized knowledge, expertise and skills in managing annuity books. She explained that life and annuity sit on opposite ends of the life insurance spectrum and therefore the approach and philosophy in dealing with them should be different, expertise, she said, which traditional life insurance companies do not currently possess. She added that CMB also gives it the potential to create assets that back up annuity products which as the market indicates such assets were not traditionally available.

In summing up the vision of Bona Life Sikalesele-Vaka fervently expressed that “Bona Life is not just about setting up a business and making money, it’s about being a pioneer and trail blazer in terms of changing society and how it works. This is largely influenced by what is seen in the market, for example people retiring into poverty. When you start work you should be able to say that one day I will finish this work and so what is going to happen after that day, I want to be instrumental in getting our society to provide for the future and to stop looking at life on a day to day basis.” She explained that to continue to live comfortably post the productive years it is important for people to treat life insurance in the same manner as tax, “when you start a job you know that you have to pay tax, it’s not negotiable and it’s also something you can’t reverse. I want us as a nation to get to a point where we treat life insurance in the same way, just think of it as a tax, a necessary evil but one that is going to work for you in the future.”

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