SA Home Loans is one of South Africa’s leading mortgage specialists, and the country’s largest non-bank home loan provider. The company provides home loans, financing and insurance, and has been a Genasys customer since 2016.
We sat down with Managing Director of SAHL Insurance, Colin Young, to find out more about the business and its success, what keeps Colin (very) busy in his role and his plans for the future.
So, Colin, please tell us a bit about SA Home Loans…
SA Home Loans was founded in 1999 and at the time it was the first non-bank provider of home loans in South Africa. Back in those days, interest rates in South Africa were at record highs; if I recall, the rate at that point was about 25%. The problem was the prime lending rate on mortgages, with inflation and then the Rand crashing, interest rates went sky high. That was our catalyst for the founders of SA Home Loans: working out how we could get into the market, find alternative funding sources to the traditional banks who obviously use deposit accounts, and be able to undercut those rates and give clients cheaper rates. We did it, and we managed to undercut rates by a couple of percent as to what the market was doing, and the company really took off.
And what’s your journey with the business been?
I joined back in 2005, together with my colleague Tim Bean, an actuary who I’d worked with for many years in life insurance. We joined with a mandate to set up a life company for SA Home Loans, after we spotted the opportunity and brought a business plan to them – to provide bond protection cover for clients of SA Home Loans. These products obviously work really closely together. So the home loan and the mortgage protection cover are linked.
We joined in January 2005, we went live in April that year and sold our first policies. In that time, we’d managed to get a full life insurance license from the Financial Services Board, get some systems together to run the product, and be ready to sell it just a few months after we actually joined the company.
That went really successfully and in 2007, the managing director of SA Home Loans asked us to start a short-term insurance company, which we did and founded SAHL Insurance. And really, those two products have continued in a similar format until today. We’ve always believed in keeping the business simple; we haven’t tried to go into a whole lot of different products, we’ve kept our costs as low as possible. In 2019, I took over as Managing Director of both SAHL life and insurance.
It seems like you have some very happy clients – what do they love about SA Home Loans?
It’s definitely the simplicity of what we offer, and the certainty of having their home loan and cover in one place, plus we’re very competitive with our pricing. But more importantly, I think we are able to provide a very personalised service to clients and be able to go into a lot more depth than your big banks do. One of the philosophies of SA Home Loans is “Amazing Service”. And really we go out of our way in all aspects of the business from the home loan to the insurance to ensure that we do provide our clients with an amazing service experience. And I think that’s why a lot of the clients stay with us for many years; even when they’re buying new houses, they’ll come back for their home loan and insurance with us again.
And what changes have you seen in the business over the years?
I think it’s almost a case of ‘as more things change, the more and more they stay the same’ – but we were very forward thinking in how we set the business up, which has been crucial to our success.
For example, right from the beginning, we went completely paperless; when we used call centres to sell the product we used voice recording. And so from a client point of view there was absolutely no paper at all, and to be honest in that example, the process remains exactly today as it was back then. We were early adopters of a lot of processes – I think we were probably ahead of our time. We’ve tried to make sure everything is seamless for the client. We actually haven’t changed our processes much at all, but we obviously have improved systems over time and made things more efficient.
And with the product as well, I think from the beginning, we managed to provide a product which met the client’s needs at a really affordable rate and allowed us to service the book really well. On the life side, there have been changes but those really have been more driven by legislation. It’s been important for us to have flexible technology that can help us react to that.
With such a consistent product, how do you make sure you are set up to be flexible to change when it’s needed?
Well in terms of responding to legislation changes, it can be challenging. In 2017 there was legislation on the life side that was brought in, around what benefits you have to provide to clients. There was a hard deadline imposed by the Prudential authority, and the National Credit regulator and in three to four months we did a complete revamp of the product. So it was challenging, but we managed to get it done.
Looking forwards, we need to make sure we have that flexibility built into our systems and processes and that’s where we are working with Genasys at the moment. At the moment we manage all of our claims through Genasys but we don’t do administration of the policy through the platform presently. So we’re now in a project to move the full administration onto the platform. This will open up opportunities for the business and we’re hoping to be able to get the flexibility to be able to maybe do some other types of products or sell policies that are not necessarily linked to SA Home Loans in the future.
We’re really happy with Genasys; it’s worked well for us. It’s been very stable and we’ve got a good relationship with Eugene and his team. So we thought that the logical next step is to move the complete product on to Genasys and then just have to do the integration work into the other enterprise systems at SA Home Loans.
What are the main challenges in your role?
Probably our biggest challenge is the ever-increasing load of compliance and reporting that we have to do. I often look back to those days back in 2005, when we started the life company, and literally within a couple of months of doing the applications, we had licenses to run those businesses. I think in the environment we run today, it would be almost impossible to do that.
We spend a massive amount of time, money and resources just making sure that that we are producing all the reports, all the compliance, everything that has to be prepared and has to be submitted. And I think that the challenge is that it takes away from the focus on the business itself.
So you don’t necessarily have the time or the resources that you need to look at other opportunities to look at “how do we do things differently? What can we do better?”.
Do you think resources will continue to be a major industry challenge?
Yes, I think compliance worldwide is getting more and more onerous – I think that is going to continue, and resources are also a big challenge. And I guess that’s one of the main reasons why we looked to partner with Genasys. Previously, we ran our insurance systems with a very small company. And we were concerned that in the long run, they wouldn’t be able to have the resources to provide stability in the system. That’s when we went out, looked around and met up with Genasys and decided to move across. We were confident that it was a much bigger organisation with access to resources more worldwide than just here in South Africa. We were worried about security and the longevity of the previous system. If something happened to one or two of the primary guys running it, there was going to be a major problem.
And with our own hiring across other parts of the business, particularly in South Africa, we see a big gap in the necessary talent. We made an offer to a young actuary three weeks ago, he got two other offers from two other large organisations, and decided rather than move to Durban he’d stay in Cape Town with one of them. So when you get a young person getting three job offers in one week, you can tell how tight those resources are.
So to finish on a bit of advice for anyone looking to get into the industry: do it! If you have the ability, the demand is just nonstop!
Find out more about SA Home Loans at sahomeloans.com.
