The business of death has never been a comfortable subject. Yet in current times it has permeated society as never before. The last time the world faced such a crisis was the Spanish Flu epidemic in 1918, which was the same year that AVBOB, South Africa’s oldest and first mutual funeral insurance and services society, was created. Today’s pandemic is arguably the most widespread single crisis to face the world in living memory, not least because of its global impact, and the number of deaths or infections, but also because of the speed at which it has spread. Whether directly or indirectly impacting people through the loss of loved ones, it has changed attitudes, behaviours and processes around funerals and funeral-insurance underwriting forever.

The profile of funeral directors has consequentially been elevated, for it is they who are among the first responders to death. Unlike other businesses, which could evolve their business models to lockdown restrictions over time, the funeral industry had no choice but to ‘literally change how we work overnight’, says Carl van der Riet, CEO of AVBOB, which has grown to be South Africa’s largest funeral-service and funeral-insurance business.

‘Our operations were significantly impacted – and in a variety of ways,’ he says. ‘AVBOB’s funeral-services division continued to operate as an essential service, but the manner in which funeral services are conducted has been fundamentally affected by government regulations and protocols.’

Among the most impactful of the new compliance regime was that the usual end-of-life cultural practices could no longer be performed by families. As is traditional within the African culture, big funerals usually involve an entire community and night vigils. ‘Many of our AVBOB funeral homes are in remote areas, where government’s lockdown messages were not clearly understood, so it fell to our funeral directors to explain the new restrictions. They were then perceived as the enforcers and had to manoeuvre through this challenge while still comforting the bereaved.’

Live-streaming of funerals also changed the nature of the delivery of service that AVBOB offers, explains Van der Riet. ‘Live-streaming is, however, still in its infancy in South Africa and AVBOB is obviously pursing this avenue rigorously so that those with relatives outside of the country, or who are restricted by travel, can be part of a funeral ceremony.’ Even deeper behind these front lines were changes AVBOB made to its manufacturing facility in Bloemfontein, which continued to produce coffins, wreaths and other funeral-ware, while adapting to COVID-19 health and safety regulations to protect its staff. Van der Riet says that this arm of the business showed great initiative in preparing for the predictable spike in mortality by purchasing and converting shipping containers into mobile mortuaries for distribution to hotspots across the country.

AVBOB has weathered through the protocols exceptionally well and largely because its entire operation, be that the funeral services or its underwriting of life and funeral insurance, is based on a shared-values model. This plays out in three ways. Firstly, AVBOB is a mutual assurance society, which means it has no external shareholders. The business is owned by – and operated for the benefit of – its members, who are the policyholders. ‘The full value generated by the business each year is deployed for the benefit of our members and the communities in which they reside,’ says Van der Riet. ‘This allows us to offer not only unparalleled benefits, but also participation in the economic rewards of the business, and [it] plays a crucial role in providing access to financial services and participation in economic growth.

‘The value we create is shared with our members through a variety of means. These include regular enhancements and additions to policy benefits, free products and services for members through our funeral-service business, and significant investments in corporate social investment, and enterprise and supplier development initiatives.’

For example, in its past financial year, AVBOB provided free funeral services and products to members to the value of ZAR320 million. ‘We have seen the value of this support increase significantly during the COVID-19 pandemic,’ says Van der Riet. ‘In these times of rising unemployment and economic difficulties, such support to members could not be more needed.’

The second shared-values strategy serves not only to comply with AVBOB’s mandate to facilitate entrepreneurship, but also grow the AVBOB footprint. It does this by funding the infrastructure of new branches, which are then handed over to identified funeral agents.

AVBOB makes a substantial investment in each branch, with complete infrastructure, inclusive of amenities, stock and vehicles, furniture and computer equipment – even a mortuary, if necessary – and comprehensive training of the specially identified funeral directors. ‘They can begin operating from day one,’ says Van der Riet. ‘The support AVBOB provides is ongoing and comprehensive, inclusive of legal compliance, technical and financial assistance.’

This model has a vast knock-on effect in local communities as each independent funeral director employs their own staff, and uses other local businesses to source non-core services and products, such as catering and catering equipment, family transport, floral arrangements and house tents.

The contribution this formula makes to a local economy is felt in many ways, which elevates the third benefit of AVBOB’s shared-values model. ‘We believe strongly in getting even closer to our members through our value-added CSI schemes and community upliftment programmes,’ says Van der Riet. Likely the most well-known of its philanthropic efforts is AVBOB’s creation of a prize-winning poetry competition, manifesting in the annual publication of the ‘I Wish I’d Said’ anthologies. These volumes have proven exceptional in supporting and care of those in their time of grief and mourning, with poems often selected for use in memorial services as a fitting tribute. With the focus still on literacy, AVBOB has also donated 56 container libraries to underprivileged schools across the country. ‘And, in partnership with the Department of Basic Education, we have invested ZAR135 million in the upgrade of rural schools, and a further ZAR15 million has been granted to the Sanitation Appropriation for Schools (SAFE) project,’ says Van der Riet. ‘For us, our social commitment is not about handouts; we want to be part of the upliftment that makes communities sustainable and empowered, and which is why we need to be in close proximity to where our policyholders live. We are not just selling a product; we are selling an experience at a time when people are at their most vulnerable, and grieving.’

Van der Riet recently concluded his first calendar year as CEO of AVBOB following two years as its deputy CEO. Prior to that, he was a practising actuary for 27 years. This experience paved the way for him to lead AVBOB into considerable growth – expanding its footprint by 11 new funeral and insurance offices in the past year, bringing the total AVBOB presence to more than 350 offices. AVBOB also now boasts 2.2 million policyholders and 7 million lives assured. Under Van der Riet’s helm, the organisation has seen asset growth of 14.8% to ZAR21.4 billion and a premium income increase of 14% to ZAR4.7 billion. Along with his teams, Van der Riet has also guided AVBOB employees and branch owners into a deeper deployment of technological underwriting. ‘The preference in our industry has always been for face-to-face sales, reflecting the need from our clients for personal advice,’ says Van der Riet. ‘Our sales force had to pivot very quickly with COVID-19, to cope with not just new demand for policies but a more remote approach in the context of social distancing.

‘COVID-19 also heightened clients’ expectations for a speedier turnaround when applying for, and issuing, a policy. With our insurance representatives having to engage remotely and online, our distribution capabilities were initially disrupted enormously,’ he says.

‘We have learnt valuable lessons and are optimistic about the many new opportunities that have been created.’

By Kerry Dimmer
Image Marc Shoul