Enterprise Trustees: Pension Services for Industry Players and Individuals in Ghana

Interview with Joseph Ampofo, Executive Director of Enterprise Trustees

What is Enterprise Trustees?

Enterprise Trustees is made up of a family of companies. We have Enterprise Insurance which is a leader for us in the general insurance space. We have recently launched a same day claims payment, that is an innovation in the industry, it is not happening anywhere else. We also have Enterprise Life, another subsidiary, which is the market leader in the life space. They have also set up a subsidiary called Enterprise Funeral Services which is the first in Ghana. There is a beautiful funeral parlor, with a salon and we intend to lay you down safely and gradually, and not to rush. We also have Enterprise Properties. We have come up with a new building called the Advantage Place and it is one of the icons in the financial sector. The last AGM was announced for our shareholders and we are looking at ways we can expand into other regions as well. We are looking very seriously at Nigeria. We are also looking at our health services and will be announcing in that space very soon. On a broad nature, Enterprise Group is very focused on providing different solutions in the life cycle of every human being in Ghana as well the world.

What is your assessment of the sector? What are the latest trends in 2018?

The pension sector in Ghana is largely finding its feet. The law was passed in 2010 and soon after, we received our license and began business. Collection started around November 2012. To date, we are about 5 to 6 percent of GDP and we have grown rapidly. We have a regulator as well that is finding its way around.

What is the name of the regulator?

It is the National Pensions Regulatory Authority (NPRA). It has had a fair number of CEOs. They currently have a CEO and Deputy CEO. The structures in the regulatory framework are now quite set. The regulatory firm has now found its way. Their main duties are supervision and ensuring that the market players are doing the right things. There has been quite an intensified supervision. There is not a day or two that goes by that you do not receive a yellow paper from the regulator regarding information about something new or something that it intends to do. That is keeping the players on their toes.

Is it a competitive market?

No matter what you do, you can have all the fantastic interest and everything else, but if your service is not up to scratch, people will not sign up. We believe that we are offering clients top notch service. We are improving each day as we go.

We have grown from about 16 companies in 2012 to 33 or 35 companies now. These are the corporate trustees that are licensed to run the Tier 2 and Tier 3 businesses in Ghana. Per the last ranking from the regulatory, there are four companies that hold more than ten percent of the assets management in the industry. Enterprise Trustees holds the largest assets management as of the last count in the industry. There are also three other players in that group. We are part of the Tier 1 Group, and Tier 2 ranges to about 50%, and then Tier 3. The competitive space is quite large. It is very active. New companies also want some space and they are actively on the existing players to be able to sign up. Also, we are looking at opening up into other markets. When we all started, everybody was focused on the formal sector. They all tried to sign up as much of the formal sector as they could. There is still quite a number of companies out there that have not yet signed up. That is also one of the active things that the regulator is looking at. Previously, in the old regime, these companies were signed on by the government through SSNIT, which were Tier 1. That was quite easy because SSNIT was dotted all over the country. But in this particular area where the private sector now has to sign up companies, we look at economics of scale. Largely, if it is an area where we do not have enough of a footprint or there are not enough companies, it is very unlikely that you can set up an office just to be able to sign up the companies that are in the region or in that particular locality. However, technology is also driving the sector. I can be set up in Kumasi and then run a business or have clients who are in Sunyani or be in Accra and manage a business in Tamale, so far as there is internet access and I can send my bill schedule and work through it.

How do you distinguish yourself in this huge mass of companies? What is your competitive advantage and what do you try to do differently?

Enterprise, the brand itself, has been in Ghana since 1924. We have tried to distinguish ourselves because we have a heritage from Enterprise Insurance. Last year, from the insurance fraternity we tried to gain that kind of brand awareness, so people believe and trust that we provide the advantage. Currently, the Group is listed on the Ghana Stock Exchange. So, in terms of compliance and visibility, we also offer people that we are coming from a stock that has that kind of compliant nature; therefore, we believe that we are doing the right thing for people to come on board. Lastly, it is about service. No matter what you do, you can have all the fantastic interest and everything else, but if your service is not up to scratch, people will not sign up. We believe that we are offering clients top notch service. We are improving each day as we go. For example, when this industry started, we were the first and only company that launched a portal for our members to have visibility. They get information in real time regarding payments that are made into their account that they can track wherever they go all over the world. So, I can be in Greece or Russia for instance, watching football, and then tracking to see if my employer has released my payment. We believe in that kind of technology and we are deploying it every day. We want to scale up as we go along. But we also believe that the kind of partnership that we hold presents to any potential client the confidence that they need. Our previous partner, Sanlam Financial Services, is also very strong in the South African market and all over Africa, not just West Africa. Lastly, we partnered with Black Star Holdings, which is a creation of Prudential and LeapFrog. That is another huge partnership that we are able to provide and tell people that the kind of company that supports their business is a very strong company and we invest in it to enable you to grow.

What is one of the markets you want to address the most? Are you venturing into Tier 3?

SSNIT is the most ideal form of measuring what the formal sector size looks like. If you look at the data from SSNIT, the number of active contributors is about 1.5 million. But there is no way that the total working population in Ghana is 1.5 million. When you weigh that kind of contribution space against mobile money transactions, it tells you that there is quite a gap between people who earn and people who can pay, as opposed to what we have captured looking at the formal space. There have been many studies showing that about 85% of the working population are in the informal sector. The definition is, what is the informal sector? If anything beyond any business that is not registered by SSNIT is considered the informal sector, then that is a large space. So, the question is where do we go? The informal sector ranges from farmers, fishermen, traders, to small scale businesses, taxi unions, all sorts of various groupings, and these people do not need a retirement product. How can you design a retirement product that fits their specific needs? I cannot go and sell the same sort of product to them as someone who is sitting in a bank. There is still ongoing study and we have not cracked it yet. We are continuing to test each of the various groups and have discussions with them because we cannot sit in the comfort of our offices and come up with a product and say it is fantastic. If you go out there and have a chat with these people, you realize that you are completely wrong. So, there is some work being done out there in the field just having conversations with them and trying to understand their need. In Ghana, in the formal sector, at age 55, you can choose to go on voluntary retirement. Many businesses now will offer a package to those workers, so they can be laid off and a younger team can come in instead. Also, most people are tired; they have worked thirty or forty years. Why not take the package? When somebody like that takes the package and goes home, what are they going to do? They can set up a small shop at home or in town and just drive there and do menial work, nothing major. That in itself is also an opportunity to ask, how do we sell a retirement product to this individual? You cannot sell the same retirement product to someone who is retired at age 55 to someone who is 30 years old who has the same kind of association. Maybe to one person, retirement is having a pot of money that is not likely to last for a very long period, but the reality is that we are living longer and living beyond our financial wealth. Therefore, you need to be able to build a larger financial pot so that when you live longer, your activities and your medical needs can be sorted.

What is the impact of technology, for instance, mobile apps, etc., in the sector?

Interaction on the phone is key. In 2012, when we developed our portal that allowed members to check their statements 24/7, we were not sending regular updates to their phone because they had the ability to check online themselves. We did some studies and realized that people felt as though they were not getting service because their phone was not beeping on a regular basis, so we realized that we needed to change the mantra. We are still in the development process, but we have a website, a login page, and we are using SMS blasts and the USSD format that allows people to check their information quickly. Technology has really been driven by the phones that people now have. People sit in meetings and their heads are down. Between laptops and phones, people spend much more time on their phones. So, we need to do things that attract people and allow them to transact on their phones. In terms of retirement though, we realized that education is key. We are developing content and sending clients information, we use portals for business, we deploy newsletters about retirement, so people can begin to gauge and have a better appreciation of what the long-term holds. Technology via phone communication is what we have identified as a growing trend and we are focused on developing tools for it.

Project yourself into the medium term, two to three years’ time. What will the company be if you achieve all your goals? What is your mission?

In the Enterprise Group, we want to be with our customers from the cradle when you are born to the end when we lay you down. When you are born, our insurance products will take care of your education, your life, then the idea about trustees or pension was to handle your retirement benefits. With retirement benefits, the question we ask ourselves is, what is the space that we are dealing with and what is the target market? We currently have achieved market dominance in terms of artisanal management, but we still feel that there is a lot more to do, especially within the informal space where there is a larger population who need financial services. In the medium term, the next two to five years, we want to be dominant in providing retirement solutions in that particular space. As to whether we will become market leaders, we believe that we will continue to be that. We need to defend our position as market leaders but then penetrate into that segment as well.

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