Santam’s appointment of Filum Ho as its senior procurement consultant has ruffled feathers in the auto repair industry as the company looks to rein in excesses.
The Collision Repairers Association of SA (CRA) says the appointment will undermine competition in the industry due to Ho’s relations with some of the group’s suppliers.
In a scathing urgent notice circulated among members, the CRA said the appointment of Ho posed a conflict of interest as his companies, Autoboys and Apollo Studio, which owns Partsmart and GT Motive, were also service providers of Santam, the country’s largest short-term insurer.
“Santam, like all insurers, is dependent on its motor body repair service providers for the timeous, quality and safe repair of its insured’s accident-damaged vehicles. This is based on [a] mutually respectful and healthy relationship between Santam and ... the industry founded on an equitable commercial dispensation, and transparent and fair remuneration,” the CRA said in the notice.
“The recent initiatives proposed by Santam will without question destroy this relationship ... it is our understanding that the main responsibility of Mr Ho will be to introduce questionable cost-cutting mechanisms to reduce motor claims for Santam. Mr Ho’s involvement in various businesses across different levels of the supply chain poses a clear conflict of interest.”
According to the association, some of the procurement initiatives to be implemented by Ho include mechanisms to reduce motor claims costs for Santam.
Santam told Business Day that it continually strove to ensure the highest standards for its clients.
“As a progressive, industry-leading insurer, Santam continually strives to ensure the highest of standards for our valued clients. This includes always looking to enhance the claims-sourcing process to ensure it consistently delivers superior results for our policyholders,” the company said.
Commenting in his personal capacity, Ho told Business Day that he was puzzled by the apparent insights the CRA had into his role at Santam, suggesting his role would be to clamp down on unfair business practices in the industry — “insights that I myself have not gained as yet”.
I must question the intent behind the CRA’s recent correspondence
— Sisa Mbangxa, APMMA president
He said: “My role as a procurement consultant officially started in the first week of June, but as of yet I still don’t have access to a work laptop and I haven’t been privy to any confidential information from Santam or indeed any information about Santam’s other suppliers, price points or commercial agreements.”
He added the insurer was still ensuring that the correct legal processes were followed in his appointment.
“While I am branded as a threat to the industry, I think further context is required. I am an avid activist for equal supplier opportunity and the fair treatment of consumers in the industry. As you can imagine, this stance has not made me very popular in certain spheres in the industry,” Ho said.
Providing context for his ownership stake at Autoboys and Apollo studios, Ho said he was an owner of 6.04% of Autoboys and 14% of Apollo Studios via his personal trust.
“I haven’t worked at Autoboys for the better part of the last two years. Both Autoboys and Apollo are current service providers to Santam and have been for years, but both are hardly exclusive in nature or market share. Autoboys is one of four current Santam glass providers, and I would estimate it has 23%-28% of Santam’s market share, or roughly R50m per annum, out of a total glass spend of around R200m per annum.”
He said Autoboys was not an exclusive parts supplier to Santam motor body repairers for accident damage claims.
“Santam collected around R15.8bn in motor premiums in the last financial year, so roughly this would equate to R11bn in spend. The bulk of this spend goes to services that motor body repairers provide. You can start understanding what’s at stake here,” Ho said.
“We all understand that to truly create a fairer society, it is about equal access. Right now, this isn’t the case in the motor body industry. And a small handful are working very hard to keep it this way. I applaud Santam for taking a stand.”
African Panel Beaters and Motor Mechanics Association (APMMA) president Sisa Mbangxa said: “I must question the intent behind the CRA’s recent correspondence. Notably, the majority of CRA members are large, non-transformed businesses.”
He added that Ho had been fully involved in the transformation of the industry through the Right 2 Repair SA, a not-for profit company, and “his appointment gives us hope” at the association.
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