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ECIC STRATEGIC PLAN 2018/19-2020/21 1
EXPORT CRED
IT INSURANCE CORPORATION OF SOUTH
AFR
ICA
SO
C LT
D
ESTABLISHED IN 2001
Export Credit Insurance Corporation of South Africa SOC Ltd
(ECIC)
STRATEGIC PLAN 2018/19 – 2020/21
YOUR EXPORT RISK PARTNER
YOUR EXPORT RISK PARTNER
2 ECIC STRATEGIC PLAN 2018/19-2020/21
ACRONYMS AND ABBREVIATIONS
Basel III A comprehensive set of reform measures designed to improve the regulation,
supervision and risk management within the banking sector.
ATI Africa Trade Insurance Agency
BBBEE Broad Based Black Economic Empowerment
Berne Union International Union of Credit and Investment Insurers
BRICS Countries of Brazil, Russia, India, China and South Africa
CIC Credit Insurance Committee
DBSA Development Bank of Southern Africa Limited
DFI Development Financial Institutions
ECA Export Credit Agency
EU European Union
FSB Financial Services Board
Government The government of the Republic of South Africa
IASB International Accounting Standards Board
IBNR Incurred but not yet reported
IDC Industrial Development Corporation of South Africa Limited
IFRS International Financial Reporting Standards
IMU Interest Make-up
MIGA Multilateral Investment Guarantee Agency
NDP National Development Plan
OECD Organization for Economic Cooperation and Development
PFMA Public Finance Management Act
Prague Club Grouping of Export Credit Agencies from emerging market economies
SAM Solvency and Asset Management
SMART Principles Specific Measurable Achievable Realistic and Timebound
SOEs State Owned Entities
the dti The Department of Trade and Industry
US United States of America
ECIC STRATEGIC PLAN 2018/19-2020/21 3
CONTENTS
1. ORGANISATIONAL STRUCTURE 6
2. OFFICIAL SIGN-OFF 7
3. FOREWORD BY THE MINISTER 8
4. FOREWORD BY THE CHAIRMAN 9
Part A: STRATEGIC OVERVIEW 10
5. VISION 10
6. MISSION 10
7. VALUES 10
8. STRATEGIC GOALS OR OBJECTIVES OF THE ENTITY 11
8.1. Strategic Themes 11
8.2. Strategy Map 11
9. SITUATIONAL ANALYSIS 13
10. SWOT ANALYSIS Organizational Delivery Environment 15
11. ALIGNMENT TO GOVERNMENT’S PRIORITIES 16
12. BOARD OF DIRECTORS AND EXECUTIVE MANAGEMENT 19
12.1. Board of Directors 19
12.2. Executive Management 22
13. DESCRIPTION OF THE PLANNING PROCESS 24
14. FINANCIAL PLAN 25
14.1. Projections of revenue, expenditure and borrowings 25
14.2. Asset and liability management 26
14.3. Cash flow projections 27
14.4. Capital expenditure projects 27
14.5. Infrastructure plans 27
14.6. Dividend policies 27
14.7. Borrowing Plans 27
Part B: PROGRAM PERFORMANCE 28
15. IMPROVE KNOWLEDGE AND SKILLS 28
15.1. Purpose 28
15.2. Description 28
15.3. Performance indicators and performance targets (Improve knowledge and skills) 29
15.4. Quarterly milestones (Improve knowledge and skills) 30
15.5. Financial Plan (Expenditure estimates for Improve Knowledge and skills) 31
4 ECIC STRATEGIC PLAN 2018/19-2020/21
16. INCREASE STRATEGIC PARTNERSHIPS AND STAKEHOLDER RELATIONS 32
16.1. Purpose 32
16.2. Description 32
16.3. Performance indicators and performance targets (Increase Strategic Partnerships and
Stakeholder Relations) 33
16.4. Quarterly milestones (Increase Strategic Partnerships and Stakeholder Relations) 34
16.5. Financial Plan (Expenditure estimates for Increase (Strategic Partnerships and
Stakeholder Relations) 35
17. IMPROVE BUSINESS PROCESSES 36
17.1 Purpose 36
17.2 Description 36
17.3 Performance indicators and performance targets (Improve Business Processes) 37
17.4 Quarterly milestones (Improve Business Processes) 38
17.5 Financial Plan (Expenditure estimates for Improving Business Process) 39
18. IMPROVE COMMUNICATION 40
18.1. Purpose 41
18.2. Description 41
18.3. Performance indicators and performance targets (Improve Communication) 41
18.4. Quarterly milestones (Improve Communication) 42
18.5. Financial Plan (Expenditure estimates for Improve Communication) 43
19. IMPROVE BUSINESS DEVELOPMENT AND CUSTOMER MANAGEMENT 44
19.1. Purpose 44
19.2. Description 44
19.3. Performance indicators and performance targets (Improve Business
Development and Customer Management) 45
19.4. Quarterly milestones (Improve Business Development and Customer Management) 46
19.5. Financial Plan (Expenditure estimates for Improve Business Development 47
and Customer Management)
20. INCREASE CAPITAL BASE 48
20.1. Purpose 48
20.2. Description 48
20.3. Performance indicators and performance targets (Increase Capital Base) 49
20.4. Quarterly milestones (Increase Capital Base) 50
20.5. Financial Plan (Expenditure estimates for Increase Capital Base) 51
21. INCREASE STAKEHOLDER/CUSTOMER SATISFACTION 52
21.1. Purpose 52
21.2. Description 52
21.3. Performance indicators and performance targets (Increase Stakeholder
/Customer Satisfaction) 53
21.4. Quarterly milestones (Increase Stakeholder/Customer Satisfaction) 54
21.5. Financial Plan (Expenditure estimates for Increase Stakeholder/Customer Satisfaction) 55
ECIC STRATEGIC PLAN 2018/19-2020/21 5
Part C: LINKS AND OTHER PLANS 56
22. Asset Management Plan 56
23. Information Technology Plan 57
24. Risk Management 58
24.1. Risk Management Plan (incl. risk strategy and process) 58
25. Fraud Prevention Plan 61
26. Risk Management – Risk register 63
26.1. Any subsidiary or statutory body reporting to the entity 64
26.2. Service Delivery Improvement Plan 64
27. Human Capital Strategic Plan 65
27.1. Introduction 65
27.2. HR Strategic Priorities 65
ANNEXURE A: INDICATOR PROFILES 68
6 ECIC STRATEGIC PLAN 2018/19-2020/21
BO
AR
DD
Dha
rmal
inga
mB
OA
RD
CO
MM
ITT
EE
S
CH
AIR
PE
RS
ON
SA
UD
ITA
M M
awel
a
RIS
KV
Mat
siliz
a
FIN
AN
CE
& IN
VE
ST
ME
NT
S O
’Mah
ony
RE
MU
NE
RA
TIO
ND
Dha
rmal
inga
m
SO
CIA
L &
ET
HIC
SS
O’M
ahon
y
Co
mp
any
Sec
reta
ry
Vaca
nt
CE
OK
O K
utoa
ne
Per
sona
l Ass
ista
nt
L R
oma
INT
ER
NA
L A
UD
IT(O
RC
A)
Hea
d: S
take
hold
er
Man
agem
ent
& S
trat
egic
Pla
nnin
g
C T
hirio
n
Und
erw
riti
ngFi
nanc
ial
Man
agem
ent
Gen
eral
C
oun
sel
N M
aphu
la
Leg
alR
isk
Man
agem
ent
Hea
d: M
arke
ting
&
Co
mm
unic
atio
nsI C
arr
Mar
keti
ng &
C
om
mun
icat
ions
Hea
d: A
ctur
ial
S E
ster
huiz
en
Act
uria
l
HR
Man
ager
M M
adon
sela
Hum
an R
eso
urce
s &
Pay
roll
Po
litic
al, E
cono
mic
A
naly
sis
& R
esea
rch
Pro
cure
men
tP
ort
folio
Man
agem
ent
& W
ork
Uni
tC
om
plia
nce
CS
I & E
SD
Bus
ines
s D
evel
op
men
tIC
T
Inve
stm
ent
1. ORGANISATIONAL STRUCTURE
ECIC STRATEGIC PLAN 2018/19-2020/21 7
2. OFFICIAL SIGN-OFF
It is hereby certified that this Strategic Plan was developed by the management of the Export Credit Insurance
Corporation of South Africa SOC Ltd (“ECIC”) under the guidance of the Board.
Accurately reflects the performance targets which ECIC will endeavour to achieve given the resources made available
in the budget for 2018/19 – 2020/21.
Clarinda Simpson: ________________________
Chief Financial Officer
Kutoane Kutoane: _________________________
Chief Executive Officer
Recommended for approval by: _______________________
Dheven Dharmalingam
Accounting Authority
8 ECIC STRATEGIC PLAN 2018/19-2020/21
3. FOREWORD BY THE MINISTER
It is pleasing to note that the South African economy has come out
of the recession, despite the World Bank recently revising our overall
growth forecast downwards. In this environment of a subdued
domestic and global economy and underperforming global trade
growth, it underscores our view that South Africa’s economic growth
path is firmly intertwined with the economic development of the
continent.
To unlock the growth potential of the economy, it is imperative that
we redouble our efforts to transform the economy and broaden
participation by all sections of society and rapidly move towards an
inclusive economic paradigm. This must entail the intensification of
our initiatives to fundamentally change the colonially-defined structure
of our economy as a producer and exporter of primary commodities
through industrialization and moving up value chains, with a strong
focus on high impact industries and job rich sectors.
Enhancing our industrial financing initiatives is essential to our efforts to accelerate and expand the industrialization of
the South African economy and improving its capacity to expand the export basket.
The ECIC is a key component of our industrial finance architecture and through its export credit scheme, it seeks to
facilitate the capacity of the local players in the manufacturing sector to export goods and services to the rest of the
continent and elsewhere. This mandate and role of ECIC fits within our overall strategy to encourage our exporters to
develop sustainable regional supply value chains.
The timing of the launch of this new Strategic Plan occurs against the backdrop where South Africa has assumed the
chairmanship of SADC. SADC has developed its road map towards its regional Industrial Development Action Plan. As
the chair of SADC, we are committed to the implementation of the regional industrial programme.
We wish to encourage ECIC to escalate its efforts to facilitate exports and investments into the rest of the African
continent and other emerging markets and rise to the challenge of deepening and expanding economic linkages
between South Africa and the rest of the continent.
Dr Rob Davies, MP
Minister of Trade and Industry
ECIC STRATEGIC PLAN 2018/19-2020/21 9
4. FOREWORD BY THE CHAIRMAN
One of the most topical issues today in our country is the issue of
good governance and ethical leadership. King IV as well puts a strong
emphasis on ethical leadership. Over the years, ECIC has been
steadfast in upholding good governance and in nurturing a healthy
relationship between the Board and the shareholder and between the
Board and the management team. It cannot be overstated, that these
healthy stakeholder relations are one of the critical success factors for
organizations in general and State-Owned Companies in particular.
In the road that lies ahead, nurturing these stakeholder relations and
deepening the common understanding on the key areas of strategic
focus and interventions is crucial in steering this ship into unchartered
territories. In a context where South Africa has been confronted by a
credit downgrade, technical recession and subdued economic growth
forecast, the pressure on State Owned Companies to contribute rather
than be a drain on the fiscus is much greater and far more urgent.
The ECIC Board and the management team is acutely aware of these challenges of the day, and is firmly seized with
the task of positioning the company on a growth trajectory to ensure that we continue to make the economic impact
that our shareholder and society expects of us.
Needless to say, the investment in our people is the most critical investment to ensure the long-term success and
sustainability of the Corporation when navigating the challenges that will come our way, as we seek to implement this
strategic plan. The capacity to form and leverage off the strategic partnerships and to execute the plan effectively, will
determine the success of the Corporation in delivering the envisioned strategic plan.
Dheven DharmalingamChairman
10 ECIC STRATEGIC PLAN 2018/19-2020/21
5. VISION
We are committed to sustainable business growth through innovative solutions, operational and service excellence,
business development and strategic partnerships.
Our Mission is to provide export credit and investment insurance solutions in support of South African capital goods
and services by applying best practice risk management principles.
The Corporation has five values being:
• Integrity - We strive to conduct every aspect of our business with honesty, integrity, and fairness.
• Accountability - We accept transparency and responsibility for our decisions and actions.
• Excellence - We are committed to the highest level of performance through continuous improvement of our skills
and business practices.
• Innovation - We encourage open-mindedness and support innovation and the development of new ideas and
processes for the continued improvement of our Corporation.
• Teamwork - We work together as a team internally and collaborate externally with our stakeholders and customers.
We appreciate that as a team, we can achieve much greater things than as individuals.
These values are reinforced by the Code of Ethics and Business conduct “the Code “and are also reflected in our
policies and procedures.
6. MISSION
7. VALUES
PART A:
Strategic Overview
ECIC STRATEGIC PLAN 2018/19-2020/21 11
8. STRATEGIC GOALS OF OBJECTIVES OF THE ENTITY
8.1. Strategic Themes
• StrategicPartnerships
We will build and leverage a local and international network of Strategic Partnerships in the public and private
sectors with a view of advancing our business reach.
• GrowtheBusiness
We will increase market presence, customer-focused solutions, grow our customer base, expedited approval
process and competitive pricing.
• OperationalExcellence
We will have effective and efficient integrated systems and processes (utilising modern technology) to achieve
improved turnaround times and support new products.
8.2. Strategy Map
ECIC Tier One Strategy Map
Cus
tom
er/
Sta
keho
lder
Fina
nce
Inte
rnal
P
roce
ssO
rgan
isat
iona
l C
apac
ity
Improve Business
Processes
3.
Improve Communication
4.Improve Business Development and
Customer Management
5.
Improve knowledge and skills
1.Increase Strategic Partnership and
Stakeholder Relations
2.
Increase Capital Base
6.
Increase Stakeholder / Customer Satisfaction
7.
12 ECIC STRATEGIC PLAN 2018/19-2020/21
To execute the strategy, the ECIC has identified 7 key strategic objectives as follows:
i. IMPROVE KNOWLEDGE & SKILLS
To develop a competent and competitive workforce that is able to deliver on the business strategy and the
achievement of ECIC’s objectives.
ii. IMPROVE STRATEGIC PARTNERSHIPS AND STAKEHOLDER RELATIONS
Enhance our business through collaboration and leveraging our local and international network of strategic
partners; public and private sector with the view of advancing our business.
iii. IMPROVE BUSINESS PROCESSES
Improve business processes to promote efficiencies in the delivery of services and products cost effectively.
iv. IMPROVE COMMUNICATION
To create awareness and understanding of ECIC’s mandate.
v. IMPROVE BUSINESS DEVELOPMENT AND CUSTOMER MANAGEMENT
Proactively attract business from new and existing customers to facilitate more exports and cross border
investments.
vi. INCREASE CAPITAL BASE
To increase the capital base of the ECIC that supports the growth and sustainability of the business.
vii. INCREASE STAKEHOLDER/CUSTOMER SATISFACTION
Maintain required levels of stakeholder and customer satisfaction.
ECIC STRATEGIC PLAN 2018/19-2020/21 13
9. SITUATIONAL ANALYSIS
Global Economic Overview
Global growth is firming, contributing to an improvement in confidence. A recovery in industrial activity has coincided
with a pickup in global trade, after two years of marked weakness (Figure 1). In emerging market and developing
economies, obstacles to growth among commodity exporters are gradually diminishing, while activity in commodity
importers remains generally robust. As a result, and despite substantial policy uncertainty, global growth is predicted to
recover to 4.1% in 2017 and reach an average of 4.6% in 2018-19.
Figure 1
Source: IMF
Risks to the global outlook remain tilted to the downside. These include increased trade protectionism, elevated
economic policy uncertainty, the possibility of financial market disruptions, and, over the longer term, weaker potential
growth.
Sub-Saharan Africa Economy
Growth in Sub-Saharan Africa is estimated to have decelerated to 3.1% in 2016 (Figure 2), the lowest level in over two
decades. South Africa and oil exporters accounted for most of the slowdown, while activity in non-resource intensive
countries generally remained robust. Low commodity prices, weak external demand, drought, and security problems
continued to take a toll on activity in the region. Growth in the region is forecast to rebound in the short to medium term
supported by modestly rising commodity prices, strengthening external demand, and the end of drought in several
countries.
14 ECIC STRATEGIC PLAN 2018/19-2020/21
Figure 2
Source: IMF
Risks to Africa’s economic outlook include: Heightened policy uncertainty in the United States and Europe; slower pace
of adjustment to persistently low commodity prices and further decline in these prices; tighter global financing conditions
associated with sharp changes in borrowing costs and exchange rate volatility; and continued fiscal vulnerabilities.
SA slipped into a recession after its GDP declined 0.7% during Quarter 1 of 2017 after contracting by 0.3% in Quarter 4
of 2016. However, the country registered a modest growth of 2.5% in Quarter 2 of 2017, after experiencing a bumper
crop due to better rainfall and an increase in mining output prompted by a moderate rebound in commodity prices.
However, the outlook for South Africa remains difficult, with elevated political uncertainty and weak consumer and
business confidence. Growth in South Africa is projected to recover from 0.8% in 2017 to 1.6% in 2018-19 (Figure 3). A
rebound in net exports is expected to only partially offset weaker than previously forecast growth of private consumption
and investment, as borrowing costs rise following the sovereign rating downgrade to sub-investment level.
Source: IMF
ECIC STRATEGIC PLAN 2018/19-2020/21 15
• Higher risk appetite - Africa
continent
• Flexibility on underwriting terms
(OECD)
• Official Export Credit Agency -
Government backing
• Good governance structures &
effective Board
• Willingness towards upskilling
• Operational inefficiencies
• Inadequate use of data analytics
• Slow turnaround times
• Low brand awareness
• Not leveraging technology
adequately
• Broadening of ECIC mandate by
converting to Eximbank
• Leveraging on strategic
partnerships
• Strategic investment in
Afreximbank
• Industrialization drive by South
African government
• Tripartite free trade agreements
• Leveraging on regional intergration
• Increasing regulatory requirements
• SA credit downgrade to sub-
investment grade
• Uncertain macro-economic outlook
& Financial market volatility
• Increasing competition from
international insurance market
• Limited diversification in USD
investment classes
• Inflexible content policy compared
to other ECAs
10. SWOT ANALYSIS Organizational Delivery EnvironmentS
tren
gths
Weakn
essesThreats
Oppor
tunit
ies
16 ECIC STRATEGIC PLAN 2018/19-2020/21
11. ALIGNMENT TO GOVERNMENT’S PRIORITIESN
DP
Ob
jec
tiv
eN
DP
ta
rg
et
the
dti
Str
ateg
ic
Out
com
es-O
rien
tate
d
Go
als
ec
ic g
Oa
l /
Ou
tc
Om
ee
cic
iNit
iat
ive
re
sP
ON
sib
le P
rO
gr
am
me
Eco
nom
y an
d
Em
plo
ymen
t
Exp
orts
(as
mea
sure
d
in v
olum
e te
rms)
sho
uld
grow
by
6% a
yea
r to
2030
with
non
-tra
ditio
nal
expo
rts
grow
ing
by 1
0%
per
year
.
Faci
litat
e tr
ansf
orm
atio
n
of th
e ec
onom
y to
prom
ote
indu
stria
l
deve
lopm
ent,
inve
stm
ent,
com
petit
iven
ess
and
empl
oym
ent c
reat
ion.
Incr
ease
EC
IC’s
pro
duct
rang
e to
cov
er c
usto
mer
need
s, a
ddre
ss m
arke
t
gaps
and
rem
ain
com
petit
ive.
Res
earc
h an
d id
entif
y
new
opp
ortu
nitie
s.
Dev
elop
and
laun
ch n
ew
prod
ucts
.
Incr
ease
pro
duc
t
rang
e
Pro
activ
ely
attr
act
busi
ness
from
new
and
exis
ting
cust
omer
s to
faci
litat
e m
ore
expo
rts
and
cros
s bo
rder
inve
stm
ents
.
Dev
elop
and
impl
emen
t
a cu
stom
er e
ngag
emen
t
plan
.
Dev
elop
and
impl
emen
t
a bu
sine
ss d
evel
opm
ent
plan
.
Imp
rove
bus
ines
s
dev
elo
pm
ent
So
uth
Afr
ica
in t
he
reg
ion
and
the
Wo
rld
Intr
a-re
gion
al tr
ade
in
Sou
th A
frica
sho
uld
incr
ease
from
7%
of
trad
e to
25%
of t
rade
by
2030
.
Sou
th A
frica
’s tr
ade
with
regi
onal
nei
ghbo
urs
shou
ld in
crea
se fr
om
15%
of o
ur tr
ade
to
30%
.
Bui
ld m
utua
lly b
enefi
cial
regi
onal
and
glo
bal
rela
tions
to a
dvan
ce
Sou
th A
frica
’s tr
ade,
indu
stria
l pol
icy
and
econ
omic
dev
elop
men
t
obje
ctiv
es.
To a
cces
s ne
w m
arke
ts
thro
ugh
colla
bora
tion
by le
vera
ging
on
our
part
ners
reso
urce
s an
d
know
ledg
e ba
se a
s w
ell
as re
mov
ing
cons
trai
nts.
Est
ablis
h st
andi
ng
fund
ing
& in
sura
nce
arra
ngem
ents
with
finan
cier
s to
incr
ease
deal
flow
.
Incr
ease
str
ateg
ic
par
tner
ship
s
ECIC STRATEGIC PLAN 2018/19-2020/21 17
ND
P O
bje
ct
ive
ND
P t
ar
ge
t
the
dti
Str
ateg
ic
Out
com
es-O
rien
tate
d
Go
als
ec
ic g
Oa
l /
Ou
tc
Om
ee
cic
iNit
iat
ive
re
sP
ON
sib
le P
rO
gr
am
me
So
uth
Afr
ica
in t
he
reg
ion
and
the
Wo
rld
Intr
a-re
gion
al tr
ade
in
Sou
th A
frica
sho
uld
incr
ease
from
7%
of
trad
e to
25%
of t
rade
by
2030
.
Sou
th A
frica
’s tr
ade
with
regi
onal
nei
ghbo
urs
shou
ld in
crea
se fr
om
15%
of o
ur tr
ade
to
30%
.
Bui
ld m
utua
lly b
enefi
cial
regi
onal
and
glo
bal
rela
tions
to a
dvan
ce
Sou
th A
frica
’s tr
ade,
indu
stria
l pol
icy
and
econ
omic
dev
elop
men
t
obje
ctiv
es.
To c
reat
e aw
aren
ess
and
unde
rsta
ndin
g
of E
CIC
’s m
anda
te
to u
nloc
k bu
sine
ss
oppo
rtun
ities
in li
ne w
ith
Gov
ernm
ent p
riorit
ies
by c
omm
unic
atin
g
effe
ctiv
ely.
Dev
elop
targ
eted
mar
ketin
g an
d
com
mun
icat
ion
initi
ativ
es
for
fore
ign
buye
rs a
nd
gove
rnm
ents
.
EC
IC a
dvoc
acy
prog
ram
me
with
key
Gov
ernm
ent
stak
ehol
ders
.
Imp
rove
com
mun
icat
ion
Bui
ldin
g a
cap
able
stat
e
A c
apab
le a
nd
effe
ctiv
e st
ate,
abl
e
to e
nhan
ce e
cono
mic
oppo
rtun
ities
, sup
port
the
deve
lopm
ent
of c
apab
ilitie
s an
d
inte
rven
e to
ens
ure
a
risin
g flo
or o
f soc
ial
right
s fo
r th
e po
or.
Pro
mot
e a
prof
essi
onal
,
ethi
cal,
dyna
mic
,
com
petit
ive
and
cust
omer
-foc
used
wor
king
env
ironm
ent
that
ens
ures
effe
ctiv
e
and
effic
ient
ser
vice
deliv
ery.
To d
evel
op a
com
pete
nt
and
com
petit
ive
wor
kfor
ce th
at is
abl
e to
deliv
er o
n th
e bu
sine
ss
stra
tegy
and
the
achi
evem
ent o
f EC
IC’s
obje
ctiv
es.
Ski
lls A
udit
and
impl
emen
tatio
n of
annu
al tr
aini
ng p
lans
.
Imp
rove
kno
wle
dg
e &
skill
s
18 ECIC STRATEGIC PLAN 2018/19-2020/21
ND
P O
bje
ct
ive
ND
P t
ar
ge
t
the
dti
Str
ateg
ic
Out
com
es-O
rien
tate
d
Go
als
ec
ic g
Oa
l /
Ou
tc
Om
ee
cic
iNit
iat
ive
re
sP
ON
sib
le P
rO
gr
am
me
Bui
ldin
g a
cap
able
stat
e
A c
apab
le a
nd
effe
ctiv
e st
ate,
abl
e
to e
nhan
ce e
cono
mic
oppo
rtun
ities
, sup
port
the
deve
lopm
ent
of c
apab
ilitie
s an
d
inte
rven
e to
ens
ure
a
risin
g flo
or o
f soc
ial
right
s fo
r th
e po
or.
Pro
mot
e a
prof
essi
onal
,
ethi
cal,
dyna
mic
,
com
petit
ive
and
cust
omer
-foc
used
wor
king
env
ironm
ent
that
ens
ures
effe
ctiv
e
and
effic
ient
ser
vice
deliv
ery.
To a
cces
s ne
w m
arke
ts
thro
ugh
colla
bora
tion
by le
vera
ging
on
our
part
ners
reso
urce
s an
d
know
ledg
e ba
se a
s w
ell
as re
mov
ing
cons
trai
nts.
Leve
rage
exi
stin
g
part
ners
hips
to g
ener
ate
know
ledg
e sh
arin
g
prog
ram
mes
.
Incr
ease
str
ateg
ic
par
tner
ship
s
Impr
ove
Bus
ines
s
proc
esse
s to
pro
mot
e
effic
ienc
ies
in d
eliv
ery
of
serv
ices
and
pro
duct
s
cost
effe
ctiv
ely.
Alig
n pr
oces
ses
with
cus
tom
er a
nd
stak
ehol
der
need
s
thro
ugh
proc
ess
map
ping
.
Impl
emen
t an
effe
ctiv
e
repo
rtin
g sy
stem
.
Imp
rove
bus
ines
s
pro
cess
es
ECIC STRATEGIC PLAN 2018/19-2020/21 19
12. BOARD OF DIRECTORS AND EXECUTIVE MANAGEMENT
12.1. Board of directors
The ECIC’s board is responsible for determining the Corporation’s strategic direction and ensuring that the strategy is
being carried out in compliance with the law and relevant regulations. The directors serve at most two terms of three
years each. Five board committees – all of which include representatives from the dti as the sole shareholder – help
the board fulfil these roles.
Dheven DharmalingamChairperson
Qualifications: CA (S.A) Member of the Institute of Directors Areas of expertise: Finance; taxation and Insurance; Strategy; Change management and Organisational Redesign Age: 52 Years of Service: Current Position on other boards:NED and chairman of the audit committee for HBZ Bank SA Limited Executive Director of Companies with personal investments
Kutoane KutoaneExecutive Director
Qualifications: MA (econ), Advanced Management Programme (Harvard), Programme on Investment Appraisal and Management, Advanced Credit and Trade Finance.
Areas of expertise: Project finance, international trade finance, economics and investment management
Age: 49
Years of service: 4 years
Positions on other boards: None
Vuyelwa MatsilizaIndependent Non-Executive Director
Qualifications: MBL
Areas of expertise: Treasury management, project finance, corporate finance and investment management
Age: 50
Years of service: 4 years
Position on other boards: Board member at Chris Hani Development Agency (CHDA)
20 ECIC STRATEGIC PLAN 2018/19-2020/21
Abel MawelaIndependent Non-Executive Director
Qualifications: MBA
Areas of expertise: Auditing, accounting and corporate governance
Age: 56
Years of service: 5 years
Position on other boards: Molodi Finance and Investments (Pty) Ltd - Executive DirectorGautrain Management Agency - Non-Executive DirectorMpumalanga Department of Health - Audit Committee Member
Siobhain O’MahonyIndependent Non-Executive Director
Qualifications: BSc (Hons) (Actuarial Science), Fellow of the Actuarial Society of South Africa, Fellow of the Institute and Faculty of Actuaries
Areas of expertise: Actuarial valuations, asset-liability matching, capital adequacy requirements and calculations, analytics, pricing and profitability (banking), loyalty programme design and modelling
Age: 31
Years of service: 4 years
Positions on other boards: None
Lefentse RadikelediNon-Independent Non-Executive Director (National Treasury)
Qualifications: MEcon (Economic Development), Executive Development Programme, Secondary Education Diploma, Certificate in Mineral Economics, Certificate in Contract Negotiations
Areas of expertise: Finance and regulation
Age: 51
Years of service: 3 years
Positions on other boards: None
ECIC STRATEGIC PLAN 2018/19-2020/21 21
Sisa MayekisoIndependent Non-Executive Director
Qualifications: Bcom Honours (Accounting), CA(SA), CFA
Areas of expertise: Accounting, Treasury, Investment & Risk Management.
Age: 35
Years of service: 3 months
Positions on other boards: RST Africa Pharmaceuticals (Pty) Ltd - Executive DirectorVolantis Capital (Pty) Ltd - Executive DirectorMcobothi Trading CC - Executive Director
Lerato MothaeIndependent Non-Executive Director
Qualifications: CA(SA)
Areas of expertise: Auditing, Finance, Financial Management
Age: 42
Years of service: 3 months
Positions on other boards: None
Adriaan Jacobus Le RouxNon-Independent Non-Executive Director (the dti)
Qualifications: M Comm University of Pretoria
Areas of expertise: Trade and Investments
Age: 58
Years of service: 6 months
Positions on other boards: None
22 ECIC STRATEGIC PLAN 2018/19-2020/21
12.2 Executive Management
The Chief Executive Officer (CEO) is responsible for the ECIC’s day to day operations and is supported by the Chief
Operating Officer, the Chief Financial Officer, the Chief Risk Officer and General Counsel. Various units report to the CEO
and his executive team. With the exception of the CEO, who is on a three-year contract with three-month notice period,
all the executives are permanent employees who are required to give a month’s notice when resigning. Executives are
not bound by a restraint of trade agreement on leaving the ECIC.
Kutoane KutoaneExecutive Director
Mandisi NkuhluChief Operations Officer
Qualifications: MA (econ), Advanced Management Programme (Harvard), Programme on Investment Appraisal and Management, Advanced Credit and Trade Finance.
Areas of expertise: Project finance, international trade finance, economics and investment management
Age: 49
Years of service: 4 years
Positions on other boards: None
Qualifications: Bachelor of Laws, Management Advanced Programme, Executive Leadership Programme
Areas of expertise: Law and Finance
Age: 49
Years of service: 11 years
Positions on other boards: None
ECIC STRATEGIC PLAN 2018/19-2020/21 23
Qualifications: Chartered Accountant (South Africa) (CA(SA))
Areas of expertise: Finance, auditing and financial management
Age: 44
Years of service: 1 year
Positions on other boards: Non-Executive Director ARMSCOR
Clarinda SimpsonChief Financial Officer
John Omollo Chief Risk Officer
Ntshengedzeni Gilbert MaphulaGeneral Counsel
Qualifications: Masters of Business Administration (MBA) Wits, Certified Public Accountant of Kenya (CPA II, III)
Areas of expertise: Risk Management, Project & Structured Finance, Banking and Credit Rating of Financial Institutions
Age: 50
Years of service: 6 years
Positions on other boards: None
Qualifications: BPROC, LLB, LLM
Areas of expertise: Cross Boarder Financing, Export Credit Insurance, Political Risk, International Trade and Foreign Investments Project Finance and Sovereign Lending
Age: 44
Years of service: 11 years
Positions on other boards: None
24 ECIC STRATEGIC PLAN 2018/19-2020/21
13. DESCRIPTION OF THE PLANNING PROCESS
In developing the strategic plan, the Corporation has taken into account the National Development Plan as the overarching
program that guides the government priorities of the current administration. This is captured in the table demonstrating
the link between the ECIC objectives/ initiatives and the objectives and vision of the National Development Plan.
Secondly, the priorities of the dti were taken into account, to ensure that there is alignment between the ECIC objectives
and the dti priority areas. This alignment is captured in the table demonstrating the link between the dti priorities and
the ECIC mandate and initiatives.
During a two-day workshop between management and the Board, the current vision and mission of the Corporation
was revisited and confirmed. The strategic themes were maintained and our strategic objectives were amended by
incorporating increase in revenue as well as reduce cost to revenue ratio into increase in capital base and increase
product range removed due to the fact that new product offerings within the export credit insurance environment gets
saturated. We will however continue revising our product offerings to align ourselves with international best practice.
These remaining seven strategic objectives will guide the programs to be implemented by the Corporation for the next
three years. These strategic themes and objectives are captured in the strategic map which is a visual representation of
how the strategy and the various themes and objectives work together on an integrated basis to enable the Corporation
to achieve the intended results.
This allowed management and the Board to take stock of the external operational and competitive environment to help
the Corporation to position itself better to address the current and impending challenges that are lurking on the horizon.
This process has enabled the Corporation to develop programs, performance targets and measurements in line with
the SMART principles.
The overall risk appetite of the Corporation has been revisited to take stock of the new challenges in the competitive
landscape, changes in the regulatory framework, the internal control environment and the degree of oversight exercised
by the Board as a whole and through the Board committees. An updated Corporate Risk register has been developed
as part of the risk assessment of the new corporate strategy.
The different programs of the Corporation are underpinned by a budget which is predicated on the ability of the
Corporation to write new business to fulfil its mandate in the first instance, whilst ensuring that we generate sufficient
levels of revenue to ensure financial sustainability of the Corporation as a going concern over the planning period
and beyond. The overall financial plan takes into account the asset management plan to ensure the Corporation has
adequate levels of capital and liquidity to meet the regulatory and operational requirements on a sustainable basis.
The Board convened and approved the draft Strategic Plan at its meeting of 30 October 2017. Pursuant to the review
of the draft strategic plan by the dti, the updated Strategic Plan was presented to the Board in January 2018 and
approved.
ECIC STRATEGIC PLAN 2018/19-2020/21 25
14. FINANCIAL PLAN
The financial plan of the corporation is detailed below,
14.1. Projections of revenue, expenditure and borrowings
2018
R’000
2019
R’000
2020
R’000
2021
R’000
STATEMENT OF FINANCIAL PERFORMANCE
Premiums Written 503 242 373 431 317 754 375 098
Change in Unearned premiums 59 889 221 541 210 779 199 720
Change in Concentration risk -96 471 10 293 -98 -77 454
Change in Unexpired risk & Risk margin -16 403 4 369 3 575 3 149
Earned Premiums 450 258 609 635 532 011 500 514
Claims Incurred -358 682 -287 278 7 113 372 008
Claims Paid -22 311 -20 814 -11 521 -
Salvages Rec 67 176 65 597 64 490 62 606
Change in OCR provisiom -403 548 -332 061 -45 856 309 402
Assessment fees 588 216 222 207
Operating expenses -187 556 -194 377 -209 354 -232 202
Commision Paid -390 -204 -177 -187
Investment Income 134 571 128 566 356 442 356 998
Investment management expense -20 328 -19 927 -21 096 -22 492
IMU income 177 644 187 947 199 224 211 177
IMU expenses -78 369 -55 272 -46 507 -37 823
Foreign Exchange gain/(Loss) 9 574 44 057 -9 349 -40 982
Other income 760 - - -
Interest expense - - - -
Profit Before Tax (before CSI) 128 071 413 363 808 528 1 107 219
Corporate Social Investment (3%) -22 552 -11 905 -23 286 -31 888
Profit Before Tax 105 519 401 458 785 243 1 075 331
Taxation -53 680 -127 884 -232 890 -311 683
Profit/(Loss) After Tax 51 839 273 574 552 353 763 648
“IMU Income relates to the dti transfers to subsidise the IMU Claims. This amount is projected to be R199,224,000
based on an inflationary increase of 6%. This amount is received annually but not included in projections above due to
incomplete MTEF process and lack of MTEF letter as at date of submission of this strategic plan to the dti. This amount
will be updated in the revised budget during the 2018/19 budgeting process”.
26 ECIC STRATEGIC PLAN 2018/19-2020/21
14.2. Asset and liability management
2018
R’000
2019
R’000
2020
R’000
2021
R’000
STATEMENT OF FINANCIAL POSITION
ASSETS
Non- Current Assets 7 306 139 7 494 359 8 045 266 8 293 573
Equipment 9 882 11 204 13 210 12 544
Investments 7 296 256 7 483 155 8 032 056 8 281 029
Deferred Tax - - - -
Current Assets 1 508 480 1 682 374 1 230 655 1 042 575
Loans and receivables 1 507 063 1 680 316 1 228 608 1 040 506
Cash and Cash Equivalent 1 417 2 058 2 047 2 069
Taxation receivable - - - -
Total Assets 8 814 618 9 176 733 9 275 921 9 336 148
- - - -
EQUITY AND LIABILITIES
Equity
Share Capital and Premium 316 050 316 050 316 050 316 050
Capital Adequacy Requirement - - - -
Retained Income - Previous Years 2 845 121 3 310 456 3 584 030 4 136 382
- Current Year 465 335 273 574 552 353 763 648
Total Equity 3 626 505 3 900 079 4 452 432 5 216 080
- - - -
Liabilities
Insurance contract liabilities 3 723 067 3 977 040 3 780 717 3 265 608
Provision for Outstanding Claims 938 390 1 318 101 1 354 675 1 016 450
Provision for Unearned Premiums Reserve 2 509 482 2 386 801 2 159 273 1 913 689
Provision for Unexpired Risk Reserve & Risk margin 275 194 272 138 266 770 335 470
IMU liability 1 390 854 1 192 855 957 719 763 458
Deferred Tax 23 044 23 044 23 044 23 044
Taxation payable - - - -
Trade and other payables 47 492 80 696 58 747 64 153
Provisions 3 656 3 020 3 262 3 805
Total Liabilities 5 188 113 5 276 654 4 823 489 4 120 068
Total Equity and Liabilities 8 814 618 9 176 733 9 275 921 9 336 148
ECIC STRATEGIC PLAN 2018/19-2020/21 27
14.3. Cash flow projections
2018
R’000
2019
R’000
2020
R’000
2021
R’000
CASHFLOW STATEMENT
Cash flows from operating activities
Cash generated by underwriting activities 257 059 -5 751 462 659 321 560
Interest received 112 012 87 240 241 018 245 354
Dividends received 20 311 41 326 115 424 111 644
Dividends paid - - - -
Interest paid - - - -
Taxation paid -109 243 -127 884 -232 890 -311 683
Net cash inflow from operating activities 280 139 -5 069 586 211 366 875
Cash flows from investing activities
Acquisition of fixed assets -3 355 -4 752 -3 154 -1 977
Net (acquisition)/disposal of investments -558 275 10 463 -583 068 -364 877
Net cash (outflow)/inflow from investing activi-
ties -561 630 5 711 -586 222 -366 853
Net increase in cash and cash equivalents -281 491 641 -11 21
Cash and cash equivalents at beginning of year 284 614 1 417 2 058 2 047
Unrealised foreign exchange gain/(loss) on cash and
cash equivalents -1 706 - - -
Cash and cash equivalents at end of year 1 417 2 058 2 047 2 068
14.4. Capital expenditure projects
The Corporation has plans to acquire computer systems to modernise its business processes. Improving
business processes is one of the corporate objectives highlighted in the strategy. Total budgeted capital ex-
penditure amounts to approximately R1.275 million.
14.5. Infrastructure plans
The Corporation does not have infrastructure plans for the period 2018/19 – 2020/21.
14.6. Dividend policies
The Board approved the dividend policy during 2015/16.
14.7. Borrowing Plans
The Corporation has no borrowing plans.
28 ECIC STRATEGIC PLAN 2018/19-2020/21
15. IMPROVE KNOWLEDGE AND SKILLS
PART B:
Programme Performance
15.1. Purpose
To develop a competent and competitive workforce that is able to deliver on the business strategy and the
achievement of ECIC’s objectives.
15.2. Description
In three years, we will have delivered on our strategy and achieved our objectives due to the improved levels
of knowledge and skill of our staff. This program includes:
• Developing an appropriate training plan to address identified gaps and improve the knowledge and skill
of our staff.
• Develop a workforce plan that can ensure that ECIC attracts and retains a competent workforce to deliver
on its strategy.
In the next three years the successful execution of this program should result in improving key measures
such as:
• The revenue generated per employee
ECIC STRATEGIC PLAN 2018/19-2020/21 29
15.3
. P
erfo
rman
ce in
dic
ato
rs a
nd p
erfo
rman
ce t
arg
ets
(Imp
rove
Kno
wle
dg
e an
d S
kills
)
Go
al/
Out
com
eO
utp
utP
erfo
rman
ce
Ind
icat
or/
mea
sure
Aud
ited
Act
ual P
erfo
rman
ceE
stim
ate
Per
form
ance
Med
ium
Ter
m T
arg
ets
2014
/15
2015
/16
2016
/17
2017
/18
2018
/19
2019
/20
2020
/21
To d
evel
op
a
com
pet
ent
and
co
mp
etit
ive
wo
rkfo
rce
that
is
ab
le t
o d
eliv
-er
on
bus
ines
s st
rate
gy
and
the
ac
hiev
emen
t o
f o
bje
ctiv
es
Ski
lls A
udit
and
impl
e-m
enta
tion
of
annu
al tr
aini
ng
plan
s.
% o
f tra
inin
g pl
an im
ple-
men
ted.
Ski
lls a
udit
and
Trai
ning
pl
an d
evel
-op
ed.
100%
impl
e-m
enta
tion
of
trai
ning
pla
n fo
r 20
15/1
6.
100%
impl
e-m
enta
tion
of
trai
ning
pla
n fo
r 20
16/1
7.
90-1
00%
im
plem
enta
-tio
n of
trai
ning
pl
an fo
r 20
17/1
8.
90-1
00%
im
plem
enta
-tio
n of
trai
ning
pl
an fo
r 20
18/1
9.
90-1
00%
im
plem
enta
-tio
n of
trai
ning
pl
an fo
r 20
19/2
0.
90-1
00%
im
plem
enta
-tio
n of
trai
ning
pl
an fo
r 20
20/2
021.
30 ECIC STRATEGIC PLAN 2018/19-2020/21
15.4
. Q
uart
erly
mile
sto
nes
(Imp
rove
Kno
wle
dg
e an
d S
kills
)
Go
al/
Out
com
eO
utp
ut
Per
form
ance
Ind
icat
or/
mea
-
sure
Bas
elin
e20
18/1
9
Ann
ual T
arg
et
Qua
rter
ly M
ilest
one
s
1st Q
uart
er2nd
Qua
rter
3rd Q
uart
er4th
Qua
rter
To d
evel
op
a
com
pet
ent
and
com
pet
itiv
e
wo
rkfo
rce
that
is a
ble
to d
eliv
er o
n
bus
ines
s st
rat-
egy
and
the
achi
evem
ent
of
ob
ject
ives
Ski
lls a
udit
and
impl
emen
tatio
n
of a
nnua
l tra
inin
g
plan
s.
% o
f tra
inin
g
plan
impl
emen
t-
ed.
100%
impl
e-
men
tatio
n of
trai
ning
pla
n fo
r
2017
/18.
90-1
00%
im-
plem
enta
tion
of
trai
ning
pla
n fo
r
2018
/19.
Tra
inin
g pl
an
appr
oved
by
EXC
O.
25%
impl
emen
-
tatio
n of
trai
ning
plan
.
75%
impl
emen
-
tatio
n of
trai
ning
plan
.
90%
-100
%
impl
emen
tatio
n of
trai
ning
pla
n.
ECIC STRATEGIC PLAN 2018/19-2020/21 31
15.5
. Fi
nanc
ial P
lan
(Exp
end
itur
e es
tim
ates
fo
r Im
pro
ve K
now
led
ge
and
Ski
lls)
Pro
gra
mm
e N
ame:
Imp
rove
Kno
wle
dg
e an
d s
kills
Eco
nom
ic c
lass
ifica
tio
n
Exp
end
itur
e o
utco
me
Ad
just
ed
Ap
pro
pri
atio
n
Med
ium
-Ter
m E
xpen
dit
ure
Est
imat
e
2014
/15
2015
/16
2016
/17
2017
/18
2018
/19
2019
/20
2020
/21
R ‘0
00R
‘000
R ‘0
00R
‘000
R ‘0
00R
‘000
R ‘0
00
Cur
rent
pay
men
t
Com
pens
atio
n
of e
mpl
oyee
s (3
,425
)(2
,722
)(4
,165
)(5
,190
)(7
,665
)(8
,330
)(8
,978
)
Goo
ds &
ser
vice
s, e
tc(3
,677
)(6
,482
)(1
3,55
7)(1
7,61
0)(1
7,06
0)(1
8,52
1)(2
0,11
5)
Pay
men
ts o
f ca
pit
al a
sset
s
Bui
ldin
g an
d ot
her
fixed
str
uctu
re
Mac
hine
ry &
equ
ipm
ent
0 0
0 0
0 0
0
Oth
er c
lass
ifica
tio
ns
0 0
0 0
0 0
0
32 ECIC STRATEGIC PLAN 2018/19-2020/21
16. INCREASE STRATEGIC PARTNERSHIPS AND STAKEHOLDER RELATIONS
16.1. Purpose
To access new markets through collaboration by leveraging on our partner resources and knowledge base
as well as removing constraints.
16.2. Description
In three years, we will leverage our strategic partnerships, their resources and knowledge base to form sus-
tainable collaborations that will enable ECIC to access new markets and remove existing constraints. This
program will include:
• The establishment of standing funding and insurance arrangements with financial institutions that oper-
ate in ECIC’s market so as to increase deal flow.
• Leveraging on existing partnerships to generate knowledge sharing programs which may include train-
ing and secondment opportunities.
In the next three years the successful execution of this program will be demonstrated in the following key
measures:
• Increase in the number of new markets accessed.
• Increase in the number of transactions generated from collaboration arrangements.
• Increase in the number of exchanges in resources and knowledge.
• Increase in the volume of business generated from collaboration with strategic partners.
ECIC STRATEGIC PLAN 2018/19-2020/21 33
16.3
. P
erfo
rman
ce in
dic
ato
rs a
nd p
erfo
rman
ce t
arg
ets
(Incr
ease
Str
ateg
ic P
artn
ersh
ips
and
Sta
keho
lder
Rel
atio
ns)
Go
al/
Out
com
eO
utp
ut
Per
form
ance
Ind
icat
or/
mea
sure
Aud
ited
Act
ual P
erfo
rman
ceE
stim
ate
Per
-
form
ance
Med
ium
Ter
m T
arg
ets
2014
/15
2015
/16
2016
/17
2017
/18
2018
/19
2019
/20
2020
/21
Leve
rag
ing
on
par
tner
ship
s to
imp
rove
kno
wl-
edg
e
Leve
rage
exi
stin
g
part
ners
hips
to
gene
rate
kno
wl-
edge
sha
ring
initi
ativ
es.
Num
ber
of
know
ledg
e sh
ar-
ing
initi
ativ
es.
No
base
line
data
. 5
Initi
ativ
es.
8 In
itiat
ives
.
8 kn
owle
dge
shar
ing
initi
a-
tives
.
8 kn
owle
dge
shar
ing
initi
a-
tives
.
8 kn
owle
dge
shar
ing
initi
a-
tives
.
8 kn
owle
dge
shar
ing
initi
a-
tives
.
34 ECIC STRATEGIC PLAN 2018/19-2020/21
16.4
. Q
uart
erly
mile
sto
nes
(Incr
ease
Str
ateg
ic P
artn
ersh
ips
and
Sta
keho
lder
Rel
atio
ns)
Go
al/
Out
com
eO
utp
ut
Per
form
ance
Ind
icat
or
/mea
sure
Bas
elin
e20
18/1
9
Ann
ual T
arg
et
Qua
rter
ly M
ilest
one
s
1st Q
uart
er2nd
Qua
rter
3rd Q
uart
er4th
Qua
rter
Leve
rag
ing
on
par
tner
ship
s to
imp
rove
kno
wl-
edg
e
Leve
rage
exi
stin
g
part
ners
hips
to
gene
rate
kno
wl-
edge
sha
ring
initi
ativ
es.
Num
ber
of k
now
l-
edge
sha
ring
initi
ativ
es.
8 pr
ogra
mm
es.
8 kn
owle
dge
shar
ing
initi
a-
tives
.
3 kn
owle
dge
shar
ing
initi
a-
tives
cum
ulat
ive.
6 kn
owle
dge
shar
ing
initi
a-
tives
cum
ulat
ive.
8 kn
owle
dge
shar
ing
initi
a-
tives
cum
ulat
ive.
ECIC STRATEGIC PLAN 2018/19-2020/21 35
16.5
. Fi
nanc
ial P
lan
(Exp
end
itur
e es
tim
ates
fo
r In
crea
se S
trat
egic
Par
tner
ship
and
Sta
keho
lder
Rel
atio
ns)
Pro
gra
mm
e N
ame:
Incr
ease
Str
ateg
ic P
artn
ersh
ip
Eco
nom
ic c
lass
ifica
tio
n
Exp
end
itur
e o
utco
me
Ad
just
ed
Ap
pro
pri
atio
n
Med
ium
-Ter
m E
xpen
dit
ure
Est
imat
e
2014
/15
2015
/16
2016
/17
2017
/18
2018
/19
2019
/20
2020
/21
R ‘0
00R
‘000
R ‘0
00R
‘000
R ‘0
00R
‘000
R ‘0
00
Cur
rent
pay
men
t
Com
pens
atio
n
of e
mpl
oyee
s (4
,957
)(4
,763
)(2
,030
)(2
,559
)(2
,600
)(2
,825
)(3
,045
)
Goo
ds &
ser
vice
s, e
tc(5
,065
)(1
03)
(489
)(2
,914
)(3
,425
)(2
,593
)(2
,756
)
Pay
men
ts o
f ca
pit
al a
sset
s
Bui
ldin
g an
d ot
her
fixed
str
uctu
re
Mac
hine
ry &
equ
ipm
ent
0 0
0 0
0 0
0
Oth
er c
lass
ifica
tio
ns
0 0
0 0
0 0
0
36 ECIC STRATEGIC PLAN 2018/19-2020/21
17. IMPROVE BUSINESS PROCESSES
17.1. Purpose
To provide a holistic view of organizational business processes and tasks which in turn will allow proactive
monitoring of business efficiency and effectiveness in achieving the company mandate and vision.
17.2. Description
In three (3) years we endeavor to significantly improve ECIC processes and enhance efficiency in the delivery
of key services and products. This program will include:
• The procurement and implementation of a Management Information System (MIS) that will provide
document management capabilities and workflow automation of core processes.
• Providing active business intelligence and reporting on key performance indicators as well as highlight
bottlenecks, resource constraints and other inefficiencies.
• Providing a mechanism for benchmarking processes and tracking the business value of re-engineered
processes.
• This program will also drive a number of change management initiatives geared towards adoption of the
MIS and system ownership by the business.
In the next three years the successful execution of this program will be demonstrated in the following key
measures:
• Holistic level overview of organizational processes and tasks.
• Reduction in turnaround times through real time view of bottlenecks and other issues.
• Improvement in the cost effectiveness of business processes through benchmarking.
• Improvement in the quality and efficiency of reports generated improving decision making.
• Leverage technology to provide a competitive advantage.
ECIC STRATEGIC PLAN 2018/19-2020/21 37
17.3
. P
erfo
rman
ce in
dic
ato
rs a
nd p
erfo
rman
ce t
arg
ets
(Imp
rove
Bus
ines
s P
roce
sses
)
Go
al/
Out
com
eO
utp
utP
erfo
rman
ce
Ind
icat
or/
mea
sure
Aud
ited
Act
ual P
erfo
rman
ceE
stim
ate
Per
form
ance
Med
ium
Ter
m T
arg
ets
2014
/15
2015
/16
2016
/17
2017
/18
2018
/19
2019
/20
2020
/21
Imp
rove
B
usin
ess
pro
cess
es
to p
ro-
mo
te e
ffi-
cien
cies
Impl
emen
t ne
w b
usin
ess
syst
ems
plan
.
% im
plem
en-
tatio
n of
bus
i-ne
ss s
yste
ms
plan
.
ER
P S
ourc
ed.
ER
PIm
plem
enta
-tio
n.
No
MIS
sy
stem
.
100%
Impl
e-m
enta
tion
of th
e M
IS
Sys
tem
.
80 -
100%
im-
plem
enta
tion
of a
nnua
l bus
i-ne
ss s
yste
m
plan
.
80 -
100%
im-
plem
enta
tion
of a
nnua
l bus
i-ne
ss s
yste
m
plan
.
80 -
100%
im-
plem
enta
tion
of a
nnua
l bus
i-ne
ss s
yste
m
plan
.
Impr
ove
inte
rnal
pr
oces
ses.
% o
f pro
cess
im
prov
emen
t pl
an im
ple-
men
ted.
No
base
line.
No
base
line.
No
base
line.
N
o ba
selin
e.
50 –
60%
pr
oces
ses
impr
oved
.
60 –
80%
pr
oces
ses
impr
oved
.
80 –
100
%
proc
esse
sim
prov
ed.
38 ECIC STRATEGIC PLAN 2018/19-2020/21
17.4
. Qua
rter
ly m
ilest
one
s (Im
pro
ve B
usin
ess
Pro
cess
es)
Go
al/
Out
com
eO
utp
ut
Per
form
ance
Ind
icat
or
/mea
sure
Bas
elin
e20
18/1
9
Ann
ual T
arg
et
Qua
rter
ly M
ilest
one
s
1st Q
uart
er2nd
Qua
rter
3rd Q
uart
er4th
Qua
rter
Imp
rove
Bus
i-
ness
pro
cess
-
es t
o p
rom
ote
effi
cien
cies
Impl
emen
t new
busi
ness
sys
-
tem
s pl
an.
% im
plem
enta
-
tion
of b
usin
ess
syst
ems
plan
.
100%
Impl
emen
-
tatio
n of
the
MIS
Sys
tem
.
80 -
100%
im-
plem
enta
tion
of
annu
al b
usin
ess
syst
em p
lan.
ICT
Pla
n
appr
oved
by
busi
ness
.
Sou
rcin
g pr
oces
s
final
ized
.
50 –
70
%
impl
emen
tatio
ns
of IC
T bu
sine
ss
plan
.
80 –
100
% im
-
plem
enta
tion
of
the
ICT
busi
ness
plan
.
Impr
ove
busi
ness
proc
esse
s.
% o
f pro
cess
im-
prov
emen
t pla
n
impl
emen
ted.
N
o ba
selin
e.
50 –
60%
pro
-
cess
es
impr
oved
.
proc
ess
im-
prov
emen
t pla
n
appr
oved
by
EXC
O.
25-3
0%
proc
ess
im-
prov
emen
t pla
n
impl
emen
ted.
30-5
0%
proc
ess
im-
prov
emen
t pla
n
impl
emen
ted.
50-6
0%
proc
ess
im-
prov
emen
t pla
n
impl
emen
ted.
ECIC STRATEGIC PLAN 2018/19-2020/21 39
17.5
. Fin
anci
al P
lan
(Exp
end
itur
e es
tim
ates
fo
r Im
pro
ving
Bus
ines
s P
roce
sses
)
Pro
gra
mm
e N
ame:
Imp
rovi
ng B
usin
ess
Pro
cess
Eco
nom
ic c
lass
ifica
tio
n
Exp
end
itur
e o
utco
me
Ad
just
ed
Ap
pro
pri
atio
nM
ediu
m-T
erm
Exp
end
itur
e E
stim
ate
2014
/15
2015
/16
2016
/17
2017
/18
2018
/19
2019
/20
2020
/21
R ‘0
00R
‘000
R ‘0
00R
‘000
R ‘0
00R
‘000
R ‘0
00
Cur
rent
pay
men
t
Co
mp
ensa
tio
n
of
emp
loye
es
(4,2
66)
(3,4
02)
(4,1
46)
(6,4
47)
(7,2
32)
(7,8
59)
(8,4
70)
Go
od
s &
ser
vice
s, e
tc(3
,577
)(7
4)(1
,462
)(5
,993
)(3
,601
)(3
,798
)(3
,969
)
Pay
men
ts o
f ca
pit
al a
sset
s
Bui
ldin
g a
nd o
ther
fixe
d s
truc
ture
Mac
hine
ry &
eq
uip
men
t (2
,960
)(1
,576
)0
(1,9
00)
(2,9
50)
(1,0
50)
(950
)
Oth
er c
lass
ifica
tio
ns
0 0
0 0
0 0
0
40 ECIC STRATEGIC PLAN 2018/19-2020/21
18. IMPROVE COMMUNICATION
18.1. Purpose
To create awareness and understanding of ECIC’s mandate to unlock business opportunities in line with
Government priorities by communicating effectively.
18.2. Description
In three years, we will create awareness and understanding of the ECIC mandate with the aim of unlocking
business opportunities. This program will include:
• Develop and implement targeted local and international marketing and
communications initiatives.
• Initiating an ECIC advocacy programme with key local and international stakeholders to raise
the level of awareness and understanding of the ECIC mandate.
In the next three years the successful execution of this program will be demonstrated in the following key
measures:
• ECIC had repositioned its brand and visibility in the market place.
• ECIC media footprint increased both locally and internationally.
• An increase in strategic customer and stakeholder engagements.
ECIC STRATEGIC PLAN 2018/19-2020/21 41
18.3
. P
erfo
rman
ce in
dic
ato
rs a
nd p
erfo
rman
ce t
arg
ets
(Imp
rove
Co
mm
unic
atio
n)
Go
al/
Out
com
eO
utp
ut
Per
form
ance
Ind
icat
or/
mea
sure
Aud
ited
Act
ual P
erfo
rman
ceE
stim
ate
Per
-
form
ance
Med
ium
Ter
m T
arg
ets
2014
/15
2015
/16
2016
/17
2017
/18
2018
/19
2019
/20
2020
/21
To c
reat
e aw
are-
ness
and
un-
der
stan
din
g o
f E
CIC
man
dat
e to
unl
ock
bus
i-ne
ss o
pp
ort
uni-
ties
in li
ne w
ith
Go
vern
men
t p
rio
riti
es b
y co
mm
unic
atin
g
effe
ctiv
ely
Impr
ove
and
enha
nce
bran
d vi
sibi
lity.
Bra
nd s
urve
y co
nduc
ted.
No
base
line.
Con
duct
bra
nd
surv
ey.
Con
duct
bra
nd
surv
ey.
% im
ple-
men
tatio
n of
m
arke
ting
and
com
mun
icat
ion
cam
paig
ns.
Impl
emen
t 80
- 1
00%
of
201
6/17
m
arke
ting
and
com
mun
ica-
tions
cam
-pa
igns
.
Impl
emen
t 80
- 1
00%
of
201
7/18
m
arke
ting
and
com
mun
ica-
tions
cam
-pa
igns
.
Impl
emen
t 80
- 1
00%
of
201
8/19
m
arke
ting
and
com
mun
ica-
tions
cam
-pa
igns
.
Impl
emen
t 80
- 1
00%
of
201
9/20
m
arke
ting
and
com
mun
ica-
tions
cam
-pa
igns
.
Impl
emen
t 80
- 1
00%
of
202
0/21
m
arke
ting
and
com
mun
ica-
tions
cam
-pa
igns
.
42 ECIC STRATEGIC PLAN 2018/19-2020/21
18.4
. Q
uart
erly
mile
sto
nes
(Imp
rove
Co
mm
unic
atio
n)
Go
al/
Out
com
eO
utp
ut
Per
form
ance
Ind
icat
or
/mea
sure
Bas
elin
e20
18/1
9
Ann
ual T
arg
et
Qua
rter
ly M
ilest
one
s
1st Q
uart
er2nd
Qua
rter
3rd Q
uart
er4th
Qua
rter
To c
reat
e aw
are-
ness
and
und
er-
stan
din
g E
CIC
man
dat
e to
unlo
ck b
usin
ess
op
po
rtun
itie
s in
line
wit
h G
ove
rn-
men
t p
rio
riti
es b
y
com
mun
icat
ing
effe
ctiv
ely
Impr
ove
and
enha
nce
bran
d
visi
bilit
y.
Bra
nd s
urve
y
cond
ucte
d.
Bas
elin
e to
be
dete
rmin
ed b
y
surv
ey.
Con
duct
bra
nd
surv
ey.
Bra
nd s
urve
y
deve
lope
d an
d
appr
oved
by
EXC
O.
Con
duct
bra
nd
surv
ey.
Bra
nd s
urve
y
cond
ucte
d.
% o
f mar
ketin
g
and
com
mun
ica-
tions
cam
paig
ns
impl
emen
ted.
Impl
emen
t
80 -
100
%
of 2
017/
18
mar
ketin
g an
d
com
mun
icat
ions
cam
paig
ns.
Impl
emen
t 80
-
100%
of 2
018/
19
mar
ketin
g an
d
com
mun
icat
ions
cam
paig
n.
40%
impl
emen
ta-
tion
of m
arke
ting
and
com
mun
ica-
tion
cam
paig
n.
Impl
emen
t
80 -
100
%
of 2
018/
19
mar
ketin
g an
d
com
mun
icat
ions
cam
paig
n.
ECIC STRATEGIC PLAN 2018/19-2020/21 43
18.5
. Fi
nanc
ial P
lan
(Exp
end
itur
e es
tim
ates
fo
r Im
pro
ve C
om
mun
icat
ion)
Pro
gra
mm
e N
ame:
Imp
rove
co
mm
unic
atio
n
Eco
nom
ic c
lass
ifica
tion
Exp
endi
ture
out
com
eA
djus
ted
App
ropr
iatio
nM
ediu
m-T
erm
Exp
endi
ture
Est
imat
e
2014
/15
2015
/16
2016
/17
2017
/18
2018
/19
2019
/20
2019
/21
R ‘0
00R
‘000
R ‘0
00R
‘000
R ‘0
00R
‘000
R ‘0
00
Cur
rent
pay
men
t
Com
pens
atio
n of
em
ploy
ees
(6,2
24)
(2,0
41)
(5,1
10)
(6,0
79)
(6,3
75)
(6,9
27)
(7,4
66)
Goo
ds &
ser
vice
s, e
tc(4
,633
)(7
,812
)(1
0,12
7)(1
2,61
4)(1
3,39
6)(1
5,47
3)(1
7,51
6)
Pay
men
ts o
f ca
pit
al a
sset
s
Bui
ldin
g an
d ot
her
fixed
str
uctu
re
Mac
hine
ry &
equ
ipm
ent
0 0
0 0
0 0
0
Oth
er c
lass
ifica
tio
ns0
0 0
0 0
0 0
44 ECIC STRATEGIC PLAN 2018/19-2020/21
19. IMPROVE BUSINESS DEVELOPMENT AND CUSTOMER MANAGEMENT
19.1. Purpose
To proactively attract business from new and existing customers to facilitate more exports and cross border
investments.
19.2. Description
In three years, we will proactively attract business from new and existing customers to facilitate more exports
and cross border investments. This program will include:
• We proactively conduct research in various countries and sectors to identify trade and investment
opportunities for South African companies with the aim for the ECIC to match relevant players to those
opportunities.
• Implementing a customer engagement plan which will include; the articulation of ECIC’s value proposi-
tion; relationship management strategy that will seek to retain and increase the value of business from
existing and new customers; improve the quality of service provided by ECIC to its customers.
• Implementing a business development plan that will seek to establish customer focused initiatives along
regional, geographic and sector segments; develop initiative to leverage on local presence and our stra-
tegic partners.
In the next three years the successful execution of this program will be demonstrated in the following key
measures:
• Increase in ECIC customer base.
• Increase in the number of new customers.
• Increase in the number of customers retained.
ECIC STRATEGIC PLAN 2018/19-2020/21 45
19.3
. P
erfo
rman
ce in
dic
ato
rs a
nd p
erfo
rman
ce t
arg
ets
(Imp
rove
Bus
ines
s D
evel
op
men
t an
d C
usto
mer
Man
agem
ent)
Go
al/
Out
com
eO
utp
ut
Per
form
ance
Ind
icat
or/
mea
sure
Aud
ited
Act
ual P
erfo
rman
ceE
stim
ate
Per
form
ance
Med
ium
Ter
m T
arg
ets
2014
/15
2015
/16
2016
/17
2017
/18
2018
/19
2019
/20
2020
/21
Incr
ease
d
bus
ines
s
op
po
rtun
itie
s
Res
earc
h an
d
iden
tify
new
oppo
rtun
ities
.
Num
ber
of
rese
arch
pro
ject
s
to id
entif
y ne
w
oppo
rtun
ities
.
Laun
ch r
esea
rch
proj
ect.
2 re
sear
ch
proj
ects
to
iden
tify
new
oppo
rtun
ities
.
2 re
sear
ch
proj
ects
to
iden
tify
new
oppo
rtun
ities
.
2 re
sear
ch
proj
ects
to
iden
tify
new
oppo
rtun
ities
.
2 re
sear
ch
proj
ects
to
iden
tify
new
oppo
rtun
ities
.
2 re
sear
ch
proj
ects
to
iden
tify
new
oppo
rtun
ities
.
2 re
sear
ch
proj
ects
to
iden
tify
new
oppo
rtun
ities
.
Incr
ease
prem
ium
reve
nue.
Valu
e of
Pro
ject
s
appr
oved
. U
SD
432
mU
SD
377
mU
SD
479
mU
SD
400
m-
US
D 5
00m
US
D 4
50m
-
US
D 5
50m
US
D 5
00m
-
US
D 6
00m
US
D 5
50m
-
US
D 6
50m
46 ECIC STRATEGIC PLAN 2018/19-2020/21
19.4
. Q
uart
erly
mile
sto
nes
(Imp
rove
Bus
ines
s D
evel
op
men
t an
d C
usto
mer
Man
agem
ent)
Go
al/
Out
com
eO
utp
ut
Per
for-
man
ce
Ind
icat
or
/mea
sure
Bas
elin
e
2018
/19
Ann
ual
Targ
et
Qua
rter
ly M
ilest
one
s
1st Q
uart
er2nd
Qua
rter
3rd Q
uart
er4th
Qua
rter
Incr
ease
d
bus
ines
s o
p-
po
rtun
itie
s
Res
earc
h an
d id
entif
y ne
w
oppo
rtun
ities
.
Num
ber
of
rese
arch
pro
j-ec
ts to
iden
tify
new
opp
ortu
-ni
ties.
2 re
sear
ch
proj
ects
to
iden
tify
new
op
port
uniti
es.
2 re
sear
ch
proj
ects
to
iden
tify
new
op
port
uniti
es.
Firs
t res
earc
h pr
opos
al
pres
ente
d to
E
XCO
.
Sec
ond
re-
sear
ch p
ro-
posa
l pre
sent
-ed
to E
XCO
.
Firs
t res
earc
h re
port
pre
sent
-ed
to E
XCO
.
Sec
ond
re-
sear
ch re
port
pr
esen
ted
to
EXC
O.
Incr
ease
pre
-m
ium
reve
nue.
Va
lue
of p
roj-
ects
app
rove
d.U
SD
479
mU
SD
450
m -
U
SD
550
m
Ann
ual t
arge
t w
ith q
uart
er-
ly p
rogr
ess
repo
rtin
g.
Ann
ual t
arge
t w
ith q
uart
er-
ly p
rogr
ess
repo
rtin
g.
Ann
ual t
arge
t w
ith q
uart
er-
ly p
rogr
ess
repo
rtin
g.
Ann
ual t
arge
t w
ith q
uart
er-
ly p
rogr
ess
repo
rtin
g.
ECIC STRATEGIC PLAN 2018/19-2020/21 47
19.5
. Fi
nanc
ial P
lan
(Exp
end
itur
e es
tim
ates
fo
r Im
pro
ve B
usin
ess
Dev
elo
pm
ent
and
Cus
tom
er M
anag
emen
t)
Pro
gra
mm
e N
ame:
Imp
rove
Bus
ines
s D
evel
op
men
t an
d c
usto
mer
man
agem
ent
Eco
nom
ic c
lass
ifica
tion
Exp
endi
ture
out
com
eA
djus
ted
App
ropr
iatio
nM
ediu
m-T
erm
Exp
endi
ture
Est
imat
e
2014
/15
2015
/16
2016
/17
2017
/18
2018
/19
2019
/20
2019
/21
R ‘0
00R
‘000
R ‘0
00R
‘000
R ‘0
00R
‘000
R ‘0
00
Cur
rent
pay
men
t
Com
pens
atio
n
of e
mpl
oyee
s (8
,312
)(4
,082
)(7
,509
)(8
,881
)(9
,641
)(1
0,47
7)(1
1,29
3)
Goo
ds &
ser
vice
s, e
tc(3
,547
)(4
02)
(5,0
41)
(13,
954)
(12,
164)
(13,
067)
(13,
673)
Pay
men
ts o
f ca
pit
al a
sset
s
Bui
ldin
g an
d ot
her
fixed
str
uctu
re
Mac
hine
ry &
equ
ipm
ent
0 0
0 0
0 0
0
Oth
er c
lass
ifica
tio
ns
0 0
0 0
0 0
0
48 ECIC STRATEGIC PLAN 2018/19-2020/21
20. INCREASE CAPITAL BASE
20.1. Purpose
To increase the capital base of ECIC to support the growth and sustainability of the business.
20.2. Description
In three years, we will seek to increase the capital base of ECIC to support the growth and sustainability of
the business. This program will include the development and implementation of a capital model to assist the
ECIC in tracking and reporting its capital base. This capital model will also assist ECIC to fulfill its insurance
regulatory requirements of undertaking an Own Risk Solvency Assessment (ORSA).
In the next three years the successful execution of this program will be demonstrated in the increase in the
ECIC basic own funds or equity.
ECIC STRATEGIC PLAN 2018/19-2020/21 49
20.3
. P
erfo
rman
ce in
dic
ato
rs a
nd p
erfo
rman
ce t
arg
ets
(Incr
ease
Cap
ital
Bas
e)
Go
al/
Out
com
eO
utp
ut
Per
for-
man
ce
Ind
icat
or/
mea
sure
Aud
ited
Act
ual P
erfo
rman
ceE
stim
ate
Per
form
ance
Med
ium
Ter
m T
arg
ets
2014
/15
2015
/16
2016
/17
2017
/18
2018
/19
2019
/20
2020
/21
To in
crea
se t
he
cap
ital
bas
e o
f
EC
IC t
o s
upp
ort
the
gro
wth
and
sust
aina
bili
ty o
f
the
bus
ines
s
Incr
ease
in
capi
tal b
ase.
% in
crea
se
in e
quity
. R
4.3
bnR
5.3
bn
32%
dec
reas
e
in b
asic
ow
n
fund
s /
equi
ty.
1% in
crea
se in
equi
ty.
8% in
crea
se in
equi
ty.
14%
incr
ease
in e
quity
.
17%
incr
ease
in e
quity
.
50 ECIC STRATEGIC PLAN 2018/19-2020/21
20.4
. Q
uart
erly
mile
sto
nes
(Incr
ease
Cap
ital
Bas
e)
Go
al/
Out
com
eO
utp
ut
Per
form
ance
Ind
icat
or
/mea
sure
Bas
elin
e20
18/1
9
Ann
ual T
arg
et
Qua
rter
ly M
ilest
one
s
1st Q
uart
er2nd
Qua
rter
3rd Q
uart
er4th
Qua
rter
To in
crea
se t
he
cap
ital
bas
e o
f
EC
IC t
o s
upp
ort
the
gro
wth
and
sust
aina
bili
ty o
f
the
bus
ines
s
Incr
ease
cap
ital
base
.
% in
crea
se in
basi
c ow
n fu
nds
/
equi
ty.
32%
dec
reas
e in
basi
c ow
n fu
nds
/ eq
uity
.
8% in
crea
se in
equi
ty.
2% in
crea
se in
equi
ty.
3% in
crea
se
in e
quity
cum
ulat
ivel
y.
4% in
crea
se
in e
quity
cum
ulat
ivel
y.
8% in
crea
se
in e
quity
cum
ulat
ivel
y.
ECIC STRATEGIC PLAN 2018/19-2020/21 51
20.5
. Fi
nanc
ial P
lan
(Exp
end
itur
e es
tim
ates
fo
r In
crea
se C
apit
al B
ase)
Pro
gram
me
Nam
e: In
crea
se c
apita
l bas
e
Eco
nom
ic c
lass
ifica
tion
Exp
endi
ture
out
com
eA
djus
ted
App
ropr
iatio
nM
ediu
m-T
erm
Exp
endi
ture
Est
imat
e
2014
/15
2015
/16
2016
/17
2017
/18
2018
/19
2019
/20
2019
/21
R ‘0
00R
‘000
R ‘0
00R
‘000
R ‘0
00R
‘000
R ‘0
00
Cur
rent
pay
men
t
Com
pens
atio
n
of e
mpl
oyee
s (3
0,96
5)(2
7,89
7)(5
2,64
2)(6
2,10
2)(6
6,54
5)(7
2,31
6)(7
7,94
2)
Goo
ds &
ser
vice
s, e
tc(3
7,48
0)(7
7,35
7)10
2,08
2 (6
10,7
68)
(413
,846
)(1
34,4
93)
145,
732
Pay
men
ts o
f ca
pit
al a
sset
s
Bui
ldin
g an
d ot
her
fixed
str
uctu
re
Mac
hine
ry &
equ
ipm
ent
(1,8
22)
(3,1
60)
0 (1
,305
)(1
,802
)(2
,104
)(1
,027
)
Oth
er c
lass
ifica
tio
ns
(1,5
12,7
32)
(358
,940
)(3
23,2
47)
(56,
424)
(131
,315
)(2
43,3
87)
(355
,308
)
52 ECIC STRATEGIC PLAN 2018/19-2020/21
21. INCREASE STAKEHOLDER/CUSTOMER SATIFSFACTION
21.1. Purpose
To achieve the required levels of stakeholder and customer satisfaction.
21.2. Description
In three years, we will seek to achieve the required level of stakeholder and customer satisfaction.
This program will include the development and execution of various external stakeholder customer surveys.
In the next three years the successful execution of this program will be demonstrated in either the maintenance
or improvement of the required level of stakeholder or customer satisfaction.
ECIC STRATEGIC PLAN 2018/19-2020/21 53
21.3
. P
erfo
rman
ce in
dic
ato
rs a
nd p
erfo
rman
ce t
arg
ets
(Incr
ease
Sta
keho
lder
/Cus
tom
er S
atis
fact
ion)
Go
al/
Out
com
eO
utp
utP
erfo
rman
ce
Ind
icat
or/
mea
sure
Aud
ited
Act
ual P
erfo
rman
ceE
stim
ate
Per
for-
man
ceM
ediu
m T
erm
Tar
get
s
2014
/15
2015
/16
2016
/17
2017
/18
2018
/19
2019
/20
2020
/21
Req
uire
d le
vels
o
f st
akeh
old
er
and
cus
tom
er
sati
sfac
tio
n
Impr
oved
cus
tom
-er
sat
isfa
ctio
n.
Cus
tom
er s
at-
isfa
ctio
n su
rvey
co
nduc
ted
and
surv
ey fi
ndin
gs
impl
emen
ted.
No
base
line.
Bas
elin
e to
be
det
er-
min
ed b
y su
rvey
.
Impl
emen
t 80
% s
urve
y fin
ding
s.
Impl
emen
t 90
%-1
00%
su
rvey
find
-in
gs.
Con
duct
cu
stom
er
satis
fact
ion
surv
ey.
Impl
emen
t 60
- 80
% o
f ne
w s
urve
y fin
ding
s.
Impl
emen
t 80
- 1
00%
of
new
su
rvey
fin
ding
s.
54 ECIC STRATEGIC PLAN 2018/19-2020/21
21.4
. Q
uart
erly
mile
sto
nes
(Incr
ease
Sta
keho
lder
/Cus
tom
er S
atis
fact
ion)
Go
al/
Out
com
eO
utp
ut
Per
form
ance
Ind
icat
or
/mea
sure
Bas
elin
e20
18/1
9
Ann
ual T
arg
et
Qua
rter
ly M
ilest
one
s
1st Q
uart
er2nd
Qua
rter
3rd Q
uart
er4th
Qua
rter
Req
uire
d le
vels
of
stak
eho
lder
and
cus
tom
er
sati
sfac
tio
n
Impr
oved
stak
ehol
der
and
cust
omer
sat
is-
fact
ion.
Cus
tom
er s
at-
isfa
ctio
n su
rvey
cond
ucte
d.
Impl
emen
t 80%
of id
entifi
ed s
ur-
vey
findi
ngs.
Con
duct
cus
-
tom
er s
atis
fac-
tion
surv
ey.
Sur
vey
deve
lope
d an
d
appr
oved
by
EXC
O.
Con
duct
cus
-
tom
er s
atis
fac-
tion
surv
ey.
Cus
tom
er s
at-
isfa
ctio
n su
rvey
cond
ucte
d.
ECIC STRATEGIC PLAN 2018/19-2020/21 55
21.5
. Fi
nanc
ial P
lan
(Exp
end
itur
e es
tim
ates
fo
r In
crea
se S
take
hold
er/
Cus
tom
er S
atis
fact
ion)
Pro
gra
mm
e N
ame:
Incr
ease
Sta
keho
lder
/ C
usto
mer
Sat
isfa
ctio
n
Eco
nom
ic c
lass
ifica
tion
Exp
endi
ture
out
com
eA
djus
ted
App
ropr
iatio
nM
ediu
m-T
erm
Exp
endi
ture
Est
imat
e
2014
/15
2015
/16
2016
/17
2017
/18
2018
/19
2019
/20
2019
/21
R ‘0
00R
‘000
R ‘0
00R
‘000
R ‘0
00R
‘000
R ‘0
00
Cur
rent
pay
men
t
Com
pens
atio
n of
em
ploy
ees
(663
)(2
,041
)(9
,287
)(9
,243
)(1
0,29
3)(1
1,18
7)(1
7,05
8)
Goo
ds &
ser
vice
s, e
tc(2
56)
(44)
(701
)(2
,460
)(2
,016
)(2
,275
)(2
,480
)
Pay
men
ts o
f ca
pit
al a
sset
s
Bui
ldin
g an
d ot
her
fixed
str
uctu
re
Mac
hine
ry &
equ
ipm
ent
0 0
0 0
0 0
0
Oth
er c
lass
ifica
tio
ns
(4,3
99)
0 (2
,032
,446
)(7
8,36
9)(5
5,27
2)(4
6,50
7)(3
7,82
3)
56 ECIC STRATEGIC PLAN 2018/19-2020/21
22. ASSET MANAGEMENT PLAN
PART C:
LINKS AND OTHER PLANS
Background
The ECIC developed its Investment Strategy by undertaking an asset liability matching (ALM) exercise. The ALM
model was used and is updated annually to identify a range of efficient investment portfolios that takes cogni-
sance of the ECIC’s liabilities and expected future cashflows such as operational expenses, new underwriting
business and the Interest-Make-Up (IMU) payments. An efficient portfolio, a combination of asset classes set at
various strategic weights, has an overall objective of maximising surplus (assets minus liabilities) over the long-
term while minimising losses in the short-term.
Since the establishment of the Investment Strategy using the ALM model in 2015, the ECIC has spent significant
time and focus implementing the strategy by appointing suitable fund managers and setting appropriate invest-
ment guidelines for the management of the various asset classes. Relevant market index benchmarks were
allocated to each fund manager and performance and risk is measured, reported and monitored monthly. The
investment parameters for each fund manager and the portfolio as a whole is captured in the ECIC’s Investment
Policy Statement (IPS). The IPS reflects the various strategic weights assigned to managers and asset classes,
benchmarks and asset allocation ranges. It also sets out the guidelines for monitoring performance, risk and the
roles and responsibilities of accountable areas and Committees. The Investment Strategy is furthermore incor-
porated in the corporation’s risk management strategy where the level of investment risk is set and monitored.
Changes during the Year
During the year the strategic asset allocation (SAA) and benchmarks were revised and are currently as follows:
Asset Class Strategic Weight Benchmarks
SA Equities 40.0% Capped FTSE/JSE Shareholder Weighted All Share Index (SWIX)
SA Bonds 35.0% 3-7 year All Bond Index (ALBI) weighted according to bond man-
ager mandate benchmarks to reduce duration
SA Cash 20.0% Short Term Fixed Interest Index (STeFI)
SA Property 5.0% SA Listed Property Index (SAPY)
US Government
Bonds
62.5% 30% BofA Merrill Lynch 0-3-year US Treasuries + 32.5% BoFA
Merrill Lynch 5-10-year Treasuries
US Corporate
Bonds
25.0%Barclays 5-10-year AA rated US Corporate Bonds
US Cash 12.5% 3 Month USD LIBID
ECIC STRATEGIC PLAN 2018/19-2020/21 57
The main changes made were as follows:
• In the local portfolio re-allocating a portion of the equity SAA to the cash SAA, changing it from 55% to
40% and 6% to 20% respectively. This was to reduce the risk in the portfolio given the weak economic
outlook in South Africa;
• A change to the SA Equity benchmark from the SWIX to the Capped SWIX to lower the stock concen-
tration by limiting any individual stock (such as Naspers) to 10% of the index;
• Increasing the bond duration in the US portfolio to a 5-10-year range as reflected by the outcome of the
ALM exercise and matching the duration of the liabilities;
• Adjusting the asset allocation ranges that managers may take and those reflected in the IPS at a portfolio
level to be more practical, flexible where appropriate and restrictive where prudence was required;
• Introducing rebalancing bands of +/- 2.5% around each managers’ strategic weight to allow for market
movements and minimise unrewarded transaction costs.
Expected Changes
To ensure the ECIC’s Investment Strategy is diversified, flexible and accommodative, there is a need to ex-
pand the current investment universe and adjust the investment parameters and fund managers mandates
accordingly. Some of the elements have already been incorporated in the ALM exercises and asset optimis-
ing and scenario calculations. ECIC first applied to the regulators in March 2016 for a more accommodative
approach, and recently met with the department of trade and industry (the dti) and National Treasury (NT) to
discuss the requirements. The request includes the following:
• Use of multiple asset classes and regions to provide capital protection, growth and diversification. In
particular the ECIC is looking to add US Equity to its offshore portfolio to diversify its concentration to its
current US Fixed Income exposure;
• Utilisation of derivatives for efficient and prudent portfolio management and lowering investment manage-
ment costs;
• To timeously position against risks in favour of investment opportunities, and to keep up with industry
changes, the investment strategy needs to be flexible. The ECIC wants to open its investment universe
to Emerging Market countries - such as the BRICS, Asia and Africa - with an investment grade credit
rating, set at appropriate exposure levels given the liabilities and risk appetite of the corporation.
Information Technology and Communication (ICT) Plan
Export Credit Insurance Corporation (ECIC) recognizes Information Communication and Technology (ICT) as
a pivotal enabler in achieving its strategic objectives. ECIC developed a three (3) year ICT strategy with its key
focus on driving technology adoption for better efficiency and improved turnaround times, business intelli-
gence and business agility. While driving adoption of technology to create optimal ICT services, cybersecurity
remains a threat.
23. INFORMATION TECHNOLOGY PLAN
58 ECIC STRATEGIC PLAN 2018/19-2020/21
24.1. Risk Management Plan (incl. risk strategy and process)
Risk management is important to ensure the Corporation achieves its mandate in a prudent and sustainable man-
ner. The quest to achieve sound risk management principles and practices has seen the Corporation continually
re-evaluate the effectiveness of the risk management function as well as incorporate international best practice
into the risk management strategy.
Risk management is an integral part of the Corporation’s operations and decision making. Managing risk within
the confines of set bounds, and more importantly avoiding undue concentrations of insurance exposure is im-
portant. Furthermore, limiting potential losses from insured events and eschewing investment positions in less
quantifiable risks are essential elements of risk management and the control framework that serve to protect the
Corporation’s reputation and business.
The Apex body within the Corporation’s risk management architecture is the Board. However, accountability for
risk management resides with each individual within their role or area of responsibility. The Board has delegated
the responsibility of reviewing the effectiveness of the risk management system to the Risk Committee.
The three lines-of-defence principle
The vanguard or first line of defence comprise of the business units whose activities, whilst carrying out the op-
erations of the Corporation, elicit risk. Typically, the first line comprises of the operational and support areas of
the business, and are responsible for managing risks emanating from their respective areas of influence. The risk
response is a continuous process or iteration that include establishment of context, identification, measurement,
treatment, and reporting of risk.
The control functions that include Risk, Compliance and Actuarial Control are in the second line of defence. The
risk function is primarily responsible for establishing and maintaining the risk management framework, standards
and supporting policies, as well as for providing risk oversight and independent reporting of risk to executive
management, Board-level committees and the Board.
The assurance providers, namely internal and external audit constitute the third line of defence, who provide inde-
pendent assessment of the adequacy and effectiveness of the ECIC’’s overall system of internal controls and risk
governance structures and audit opinion respectively. Both audit functions report independently to the Audit and
Risk Committees of the Board and the Board.
Risk management framework, policies and procedures
The Corporation’s Risk Management Framework consist of risk mitigating policies for major risks. The policies
set out minimum control measures that ensure alignment and consistency in treatment of major risks that include
identification, measurement, treatment and reporting. Implementation of the risk management policies is the
responsibility of the executive and business unit managers. Compliance with risk policies is monitored through
self-assessments and independent reviews by the internal audit function.
24. RISK MANAGEMENT
ECIC STRATEGIC PLAN 2018/19-2020/21 59
The Corporation’s Solvency Assessment and Management (SAM) implementation project is on track. SAM is
expected to come into effect in second half of 2018 calendar year. Regular updates are received from the FSB
regarding the principles of reserve and capital calculation. Whilst the SAM implementation date has been pushed
back in the last few years, the Corporation has kept abreast of all requirements in preparation for the SAM imple-
mentation.
Risk appetite
The Corporation has expressed its risk appetite quantitatively and qualitatively. The quantitative measure is cur-
rently formulated in the form of Solvency Capital Required (“SCR”) cover, whilst the qualitative measure if fash-
ioned in the form of reputational risk. The current risk appetite is expressed in two key parameters of self -suste-
nance and reputation as follows:
• The Corporation shall grow the business by maintaining a Solvency Capital Requirement (SCR) cover ratio of
130% to 200%.
• The Corporation will manage or avoid situation / actions that could have a negative effect on its reputation
and brand.
The Board’s stated risk tolerance is that the SCR cover ratio shall not fall below 115% or go above 300%.
Risk budget
The Corporation has allocated capital to two main business activities of underwriting and investment. The split in
capital utilisation between these two business areas is 80/20 within a band or range of 60-80 and 20-40 respec-
tively. The third business area that also attracts capital but in very modest measures is the operational activities.
Given the insignificant amount of capital attributable to operations this is subsumed in the two major business
components.
The ECIC business is US dollar denominated predominantly. Historically, there were South African Rand expo-
sures, but those have run off. As a result, the Corporation strives to hold US dollar assets in sufficient quantities
and duration to account for the US dollar liabilities. However, for every excess US dollar asset that ECIC holds,
the regulatory solvency calculation imposes a penalty, thus attracting capital, purely from the fact that US dollar
assets exceed US dollar liabilities. This is premised on the argument that a strong rand would impair the US dollar
assets if converted to meet rand liabilities. This is counterintuitive because a strong rand would affect both US
dollar assets and US dollar liabilities.
Currently this currency charge is buried in the market risk component of SCR, and tends to distort that risk. As
a result, this has been updated so that the upper limits of the three risk categories are capped at below levels:
Underwriting: 70%
Investment: 20%
Currency Charge: 10%
60 ECIC STRATEGIC PLAN 2018/19-2020/21
Risk initiatives over the Strategic Planning period 2018/19 – 20/21
Solvency Assessment and Management (SAM)
Whilst the move to SAM was initially scheduled for second half of 2016, the current projection by the Regulator is
for second half of 2018. The Corporation continues to participate in the parallel runs and reporting.
Enterprise Risk Management (ERM)
The Corporation is in the process of rolling out ERM across the organisation. The pilot process was concluded in
the 2016 financial year. Subsequently the risk unit in liaison with operational areas have identified key processes
and developed Key Risk Indicators (“KRI”) for forward risk measurement. In the period under review, training have
been scheduled for risk champions and risk owners, and subsequent training sessions will be held for staff and
Board. In its complete form the ERM should help the Corporation identify adverse events before they happen and
take steps to mitigate the impact of such events if the come to pass.
Risk Appetite Review
The current quantitative measures of Risk Appetite is pitched at balance sheet level and, a statistically derived
ratio of SCR as stipulated in the standard formula by the Regulator to equity. As an Export Credit Agency (ECA)
in the medium to long term (MLT) business, the exposure type tends to be lumpy and heterogenous. As a result,
an SCR cover measure that is premised on a 1 in 200-year event (99.5% confidence interval) is inadequate to
accurately measure the inherent risk in such a portfolio. Stress tests performed on the portfolio show that a claim
of US$170 million will result in a solvency breach even though the current SCR cover is in the 2X range. This
incongruence calls for a review of the quantitative risk appetite measure in order to formulate a risk appetite mea-
sure that both accurately captures the risk as well as lends itself to being cascaded down to the various business
units. The risk division will be making presentations to both EXCO and the Risk Committee of the Board with a
view to refine the risk appetite measure.
Emerging Risks
The global environmental scan conducted on a continuous basis flags emerging risks that the Corporation could
be susceptible to. These risks will on an ongoing basis be incorporated in the Corporation’s risk management
strategy and reported through the governance structure of the Corporation.
Risk Based Approach
The Corporation employs a comparatively small size team of risk professionals that have to ensure the sustainabil-
ity of the business model very challenging economic times and locations. For the risk professionals to deploy in
their talent to sufficiently inoculate the Corporation from untoward events and incidents, there is need to establish
risk event thresholds that will trigger risk management focus. To achieve a risk based approach to risk manage-
ment, risk materiality measures will be formulated and communicated through the governance structures of the
Corporation over the period under review.
ECIC STRATEGIC PLAN 2018/19-2020/21 61
The Board of Directors is responsible for ensuring that the Corporation has an effective, efficient and transparent
system of controls for financial, risk management and internal control. Fraud and corruption remain a threat to
public trust and confidence, it is therefore essential to recognise fraud prevention as an integral part of strategic
management. It is imperative for the Board to set the right tone at the top in so far as the prevention and man-
agement of fraud in the Corporation is concerned. At a country level, reports by watchdog organisations such as
Transparency International (TI) assess and rate countries on various parameters that include fraud and corruption
amongst others. Such reports are key especially when used by foreign investors to make decisions on destina-
tions of their foreign direct investment (FDI).
The Government has zero tolerance for the malaise of fraud and corruption in the public sector and has made it
mandatory for public entities to develop fraud prevention plans as stipulated in the Treasury Regulations. Fraud
prevention invariably referred to as fraud risk management embodies the whole system of processes and pro-
cedures designed and implemented to ensure that vulnerabilities that could arise from fraudulent conduct are
curtailed and eliminated altogether. The system is intended to prevent, deter and detect fraud.
The ECIC Fraud Prevention Policy and Plan covers all acts of dishonesty including fraud, corruption and theft. The
success of any fraud prevention initiative or fraud prevention plan inevitably depends on the buy-in and co-opera-
tion of the management and staff. The risk management philosophy at ECIC that also covers fraud and corruption
is that everyone in their roles is responsible for risks that emanate or impact their area of responsibility.
25. FRAUD PREVETION PLAN
62 ECIC STRATEGIC PLAN 2018/19-2020/21
The Fraud Prevention Policy and Plan, inter alia embodies the following:
• Defines, sets control procedures to prevent, identify and deter fraud;
• Assigns appropriate responsibilities for ensuring key controls are complied with;
• Provides for the procedure for investigating all incidences of actual, attempted or suspected fraud, and all
instances of major control breakdowns;
• Encourages staff and other key stakeholders to be vigilant and raise fraud-awareness at all levels and in all
arrangements with the Corporation;
• Provides staff and key stakeholders with effective confidential reporting mechanisms and encourages their
use;
• Co-operation with law enforcement and other appropriate authorities in the investigation and prosecution of
those suspected of fraud or perpetrating fraud against the Corporation.
The ECIC’s fraud prevention plan promotes fraud prevention as stipulated below:
• Ensure the Corporation’s Code of Ethics and Business Conduct is reviewed to reflect the values and stan-
dards of the Corporation, as well as ensure that staff and stakeholders receive appropriate training and aware-
ness on the Code and other applicable ethics policies such as the Conflict of interest and Gift Policy;
• Ensure regular fraud and corruption training and awareness campaigns throughout the Corporation, with a
focus on recent cases, legislation and relevant trends;
• Promote continuous training by Management to raise appropriate awareness of internal processes and poli-
cies aimed at fraud and corruption prevention;
• Encourage use of “Tip Offs” reporting hotline or management of any fraudulent, unethical or corrupt activities
in line with the Whistle-Blowing Policy of the Corporation.
The fraud communication and awareness initiatives are reviewed annually with the assistance of independent
service providers where applicable to incorporate emerging risks and embed international best practice.
The tip-offs report as well as progress on the achievements under the fraud plan are tabled at meetings of the
Audit Committee. In the event of any member of the Board of Directors, or staff being implicated in fraud, corrup-
tion or gross negligence, the matter is also reported to the shareholder, external auditor, the Auditor-General and
the Financial Services Board.
The Fraud Prevention Plan is a live document that is updated on a continuous basis to ensure the Corporation
remains abreast of emerging trends to effectively promote ethical behaviour, entrench sound values as well as
fight fraud and corruption.
ECIC STRATEGIC PLAN 2018/19-2020/21 63
Ris
k T
itle
Ris
k C
ateg
ory
Ris
k D
escr
ipti
on
Str
ateg
ic
Ob
ject
ive
Eff
ect
of
Ris
kIn
here
nt
Imp
act
Inhe
rent
Li
kelih
oo
dIn
here
nt
Ris
kA
ctio
n P
lan
Tit
leR
esp
ons
ible
Per
son
Unc
erta
in
mac
ro-e
cono
mic
o
utlo
ok
Str
ateg
ic R
isk
Bus
ines
s pr
ojec
tions
an
d in
vest
men
t as
sum
ptio
n m
ay
be s
igni
fican
tly
impa
cted
by
an
unce
rtai
n m
acro
-ec
onom
ic o
utlo
ok.
Incr
ease
C
apita
l Bas
e.
Cur
tailm
ent i
n pr
ojec
t pip
elin
e re
sulti
ng in
re
duce
d pr
emiu
m
inco
me.
Med
ium
(4)
Like
ly (4
)H
igh
(16)
Req
uire
s O
RE
X &
obj
ectiv
e ow
ner
atte
ntio
n su
ppor
ted
by
deta
iled
rese
arch
&
pla
nnin
g.1
CO
O, G
C &
Hea
d of
Sta
keho
lder
M
anag
emen
t &
Str
ateg
y
Mar
ket R
isk
Incr
ease
d vo
latil
ity
resu
lting
in
capi
tal l
oss
in
inve
stm
ents
.
Hig
h (4
)Li
kely
(4)
Hig
h (1
6)
Req
uire
s O
RE
X &
obj
ectiv
e ow
ner
atte
ntio
n su
ppor
ted
by
deta
iled
rese
arch
&
pla
nnin
g.23
CFO
& In
vest
men
t M
anag
er
Co
mp
etit
ion
Str
ateg
ic
risks
Incr
ease
d co
mpe
titio
n fro
m
othe
r E
CA
s.
Incr
ease
S
take
hold
er
& C
usto
mer
sa
tisfa
ctio
n.Lo
ss o
f bus
ines
s du
e to
man
date
co
nstr
aint
.H
igh
(4)
Like
ly (4
)H
igh
(16)
Req
uire
s O
RE
X &
obj
ectiv
e ow
ner
atte
ntio
n su
ppor
ted
by
deta
iled
rese
arch
&
pla
nnin
g.4
CO
O G
C &
Hea
d of
Sta
keho
lder
M
anag
emen
t &
Str
ateg
y
ICT
ris
k
Ris
k of
ICT
brea
ch re
sulti
ng
unau
thor
ised
ac
cess
.
Inad
equa
te
leve
ragi
ng o
f te
chno
logy
& D
ata
anal
ytic
s.
Impr
ove
Bus
ines
s P
roce
sses
.
Una
utho
rised
ac
cess
of E
CIC
ne
twor
k re
sulti
ng
in u
naut
horiz
ed
activ
ities
.
Failu
re to
em
brac
e th
e us
e of
te
chno
logy
& d
ata
anal
ytic
s.
Hig
h (4
)U
nlik
ely
(2)
Low
(8)
Req
uire
s op
erat
iona
l m
anag
emen
t th
roug
h sp
ecifi
c m
onito
ring
or re
spon
se
proc
edur
es.5/
6
CFO
& H
ead
ICT
EXC
O
1 E
CIC
is p
ursu
ing
disc
ussi
ons
with
the
dti
to a
men
d th
e E
CIC
man
date
to e
nabl
e E
CIC
und
erw
rite
busi
ness
with
low
er S
A c
onte
nt a
s ap
plic
able
in re
spec
tive
sect
ors
– C
OO
, GC
& H
ead
Sta
keho
lder
Man
agem
ent
2 Im
prov
e in
vest
men
t man
agem
ent f
unct
ion
– H
ead
of
Inve
stm
ent
& C
FO3
Pur
sue
auth
oriz
atio
n w
ith N
atio
nal T
reas
ury
and
the
dti
on
alte
rnat
ive
inve
stm
ents
– C
FO &
Hea
d o
f In
vest
men
t4
Pur
sue
a ne
w S
A c
onte
nt re
gim
e w
ith s
hare
hold
er –
CO
O, G
C &
Hea
d o
f S
take
hold
er M
anag
emen
t
26. R
ISK
MA
NA
GE
ME
NT -
RIS
K R
EG
ISTE
R
64 ECIC STRATEGIC PLAN 2018/19-2020/21
Ris
k T
itle
Ris
k C
ateg
ory
Ris
k D
escr
ipti
on
Str
ateg
ic
Ob
ject
ive
Eff
ect
of
Ris
kIn
here
nt
Imp
act
Inhe
rent
Li
kelih
oo
dIn
here
nt
Ris
kA
ctio
n P
lan
Tit
leR
esp
ons
ible
Per
son
Dam
age
to
rep
utat
ion
or
bra
nd
Rep
utat
iona
l ris
k.
Adv
erse
med
ia
repo
rt im
pact
ing
EC
IC’s
repu
tatio
n &
br
and.
Impr
ove
stak
ehol
der
and
cust
omer
co
mm
unic
atio
n pr
oces
s.
Rep
utat
iona
l da
mag
e or
di
fficu
ltly
in
incr
easi
ng E
CIC
B
rand
pro
file.
Med
ium
(3)
Pos
sibl
e (3
)Lo
w (9
)
Req
uire
s op
erat
iona
l m
anag
emen
t th
roug
h sp
ecifi
c m
onito
ring
or re
spon
se
proc
edur
es.7
Hea
d: M
arke
ting
&
Com
mun
icat
ion.
Reg
ulat
ory
/
Leg
isla
tive
ch
ang
es
Reg
ulat
ory
Ris
k.In
crea
sed
risk
of
non-
com
plia
nce.
Incr
ease
C
apita
l Bas
e.
Ris
k of
loss
of
licen
se in
cas
e of
bre
ach
of
solv
ency
.
Low
(2)
Like
ly (4
)Lo
w (8
)
Mus
t be
man
aged
vi
a de
taile
d pl
ans
revi
ewed
&
app
rove
d by
E
RM
EXC
O &
Ris
k C
omm
ittee
.8
CO
O, G
C, H
ead
of S
take
hold
er
Man
agem
ent
&S
trat
egy,
Act
uary
.
5 U
se o
f spe
cial
ist o
utso
urce
d in
tern
et S
P to
man
age
pene
trat
ion
risk
– C
FO &
ICT
Hea
d6
Nee
d to
ste
p up
tech
nolo
gy a
s a
busi
ness
ena
bler
and
dat
a an
alyt
ics
for
deci
sion
mak
ing
- E
XC
O7
Impl
emen
t mar
ketin
g pl
an –
hig
hlig
ht s
ucce
sses
to b
uild
bra
nd a
war
enes
s –
Hea
d M
arke
ting
& C
om
mun
icat
ion
8 T
he E
CIC
is p
rese
ntly
dis
cuss
ing
the
issu
e of
und
erw
ritin
g ca
paci
ty w
ith th
e dt
i and
the
Nat
iona
l Tre
asur
y th
roug
h th
e D
irect
or G
ener
al (D
G) o
f the
dti
. EC
IC’s
und
erw
ritin
g ca
paci
ty is
cur
rent
ly d
eter
min
ed b
y th
e le
vel o
f Sol
venc
y C
apita
l Req
uire
d (S
CR
) as
dete
r
min
ed b
y th
e Fi
nanc
ial S
ervi
ces
Boa
rd’s
(FS
B) S
olve
ncy
Ass
essm
ent a
nd M
anag
emen
t (S
AM
) gui
delin
es. H
owev
er, b
ecau
se th
e go
vern
men
t pro
vide
s fo
r th
e E
CIC
exp
osur
e as
a c
ontin
gent
liab
ility,
it w
ould
be
wor
thw
hile
to a
gree
an
unde
rwrit
ing
capa
city
with
the
gov
ernm
ent t
o al
low
EC
IC to
und
erw
rite
expo
sure
to S
A e
xpor
ts o
n a
mor
e de
term
inat
e ba
sis.
The
dow
nsid
e ris
k of
usi
ng S
CR
as
a ris
k m
easu
re is
the
lum
py n
atur
e of
EC
IC e
xpos
ure
that
wou
ld b
reac
h th
e FS
B’s
SC
R e
ven
from
a m
ediu
m s
ize
polic
y cl
aim
. – C
OO
& H
ead
of
Sta
keho
lder
Man
agem
ent,
GC
& A
ctua
ry
26.1
. Any
sub
sid
iary
or
stat
uto
ry b
od
y re
po
rtin
g t
o t
he e
ntit
y
Not
app
licab
le
26.2
. Ser
vice
Del
iver
y Im
pro
vem
ent
Pla
n
Ove
r the
nex
t thr
ee y
ears
the
EC
IC w
ill de
velo
p an
d im
plem
ent a
cus
tom
er e
ngag
emen
t pla
n w
hich
will
incl
ude;
the
artic
ulat
ion
of E
CIC
’s v
alue
pro
posi
tion;
rela
tions
hip
man
-
agem
ent s
trat
egy
that
will
seek
to re
tain
and
incr
ease
the
valu
e of
bus
ines
s fro
m e
xist
ing
and
new
cus
tom
ers;
impr
ove
the
qual
ity o
f ser
vice
pro
vide
d by
EC
IC to
its
cust
omer
s.
ECIC STRATEGIC PLAN 2018/19-2020/21 65
27.1. Introduction
The Strategic Human Capital Plan (SHCP) sets forth the framework for managing the Corporation’s human
capital system through 2020/2021. This Plan, which replaces the 2017/18-2019/2020 SHCP, aligns with the
Corporation’s 2018/19 to 2020/21 Strategic Plan.
27.2. HR Strategic Priorities
27.2.1 Human Capital Goals (2018/2019 – 2020/2021)
The 2021 SHCP focuses on three strategic human capital goals relating to attracting, motivating and retaining
diverse talent, building capacity and having engaged employees.
The human capital goals are discussed in detail below.
27.2.2 Human Capital Goal 1 – Attract, motivate and retain diverse talent
The Corporation seeks to improve each year the speed, quality and diversity of hiring. Detailed below are the
objectives and initiatives to be implemented:
Human Capital ObjectiveHuman Capital
InitiativeRationale 2019 Target
Improve workforce planning. Create a talent
database.
Proactive planning for
organisational capabilities.
Talent database
implemented.
Improve the quality of our
hires.
Review our
selection criteria.
The organization requires top
talent to achieve its strategy.
Selection Criteria
reviewed.
Improve remuneration &
recognition practices.
Conduct
salary market
benchmarking.
Remuneration & recognition
are key drivers of motivation
and retention.
Salary market
benchmark conducted.
Maintain retention levels. Achieve 85%
retention.
Retention is a key driver of
productivity.
85% retention of
employees.
Improve talent diversity. Employment Equity
Plan.
Talented people we attract
to ECIC need to reflect the
diversity of South Africa’s
population.
Implementation of the
Employment Equity
plan.
27. HUMAN CAPITAL STRATEGIC PLAN
66 ECIC STRATEGIC PLAN 2018/19-2020/21
27.2.3 Human Capital Goal 2 – Build Capacity
The Corporation seeks to improve the effectiveness of employee skills assessments, training curricula, de-
livery methods and close skills gaps with this goal. Indicated below are the objectives and initiatives to be
implemented:
Human Capital
Objective
Human Capital
InitiativeRationale 2019 Target
Improve knowledge and
skills.
Compile and implement
a competency frame-
work.
Compile and implement
an annual training plan.
Implement knowledge
sharing initiatives with
other ECAs or DFIs.
Blend learning and de-
velopment by using both
e-learning and class-
room learning.
Competency development.
Targeted learning initiatives.
Continuous learning and de-
velopment and staying abreast
of industry developments.
Improve efficiency within learn-
ing and development.
Competency
framework imple-
mented.
Implementation of
the annual training
plan.
Eight Knowledge
sharing initiatives.
30% of our offer-
ings to be through
E- learning.
Improve performance
management.
Review of the perfor-
mance management
system.
Performance management
plays a key role in the achieve-
ment of the business strategy.
Performance
Management sys-
tem reviewed.
Implement succession
planning programme.
Succession plans in-
cluded in the individual’s
employee’s PDP.
Availability of key skills is a
threat to business growth.
Succession plans
for key positions.
Review organisational
design.
Review of the organisa-
tional structure.
To prepare for the transition
into an EXIM anticipated for
2020.
Review selected
EXIMs business
models.
ECIC STRATEGIC PLAN 2018/19-2020/21 67
27.2.4 Human Capital Goal 3 – Engaged Employees
The Corporation seeks to improve employee engagement, employee wellness and organisational culture with
this goal. Detailed below are the objectives and initiatives linked to this goal:
Human Capital
Objective
Human Capital Initiative Rationale 2019 Target
Improve employee
engagement levels.
Conduct an employee
survey.
Compile and implement an
engagement plan.
Measure
employee’s
perceptions.
Action Plan to
respond to the
outcomes of the
survey.
Employee survey
conducted.
Engagement plan
compiled.
Improve the wellness
of our employees.
Compile and implement
wellness plan.
Respond to
emerging
occupational health
and wellness
issues.
Employee wellness plan
implemented.
Define and design
organisational culture
which will enable
achievement of
strategy.
Organisational Culture
Project.
Corporation
to build a
customer centric,
performance-driven
and innovative
culture.
Organisational culture
workshops conducted.
27.2.5 Defining and measuring success
The ultimate measure of success for the 2018/19-2020/21 SHCP will be its overall impact on the Corpora-
tion’s business strategy results and employees’ ability to achieve that strategy.
27.2.6 Reporting
Status reports on the implementation of the SHCP will be tabled to the Social & Ethics Committee and/or
Remunerations Committee for monitoring.
27.2.7 Conclusion
The Human Capital strategies and objectives as reflected in this SHCP are flexible and will continuously be
realigned to the business and organisational requirements as reflected in the Corporate Strategic Plan.
68 ECIC STRATEGIC PLAN 2018/19-2020/21
Improve Knowledge and Skill
1. Indicator title Percentage of training plan implemented
2. Short definition % training implemented
3. Purpose/importance To improve the knowledge and skill of the workforce
4. Source/collection of data HR report on training submitted to the Human Resource Committee
5. Method of calculation Percentage number of training attended by staff to planned training
6. Data limitations None
7. Type of indicator Leading
8. Calculation type Count
9. Reporting cycle Quarterly
10. Desired performance Achievement of agreed milestone
11. Indicator responsibility Head: HR
Increase Strategic Partnerships and Stakeholder Relations
1. Indicator title Number of knowledge sharing initiatives
2. Short definition Knowledge sharing initiatives
3. Purpose/importance Improving knowledge of staff
4. Source/collection of data Project progress report
5. Method of calculation Review project progress status
6. Data limitations None
7. Type of indicator Leading
8. Calculation type Assessment of actual project status against agreed milestones agreed
9. Reporting cycle Quarterly
10. New indicator n/a
11. Desired performance Achievement of agreed milestones
12. Indicator responsibility Head: HR
ANNEXURE A: INDICATOR PROFILES
ECIC STRATEGIC PLAN 2018/19-2020/21 69
Improve Business Processes
1. Indicator titlePercentage implementation of
business systems plan
Percentage of process improvement
plan implemented
2. Short definitionImplementation of business system
planProcesses improved
3. Purpose/importanceTo implement annual business
system planImprove business processes
4. Source/collection of dataProject progress report signed off by
IT STEERCOProcess improvement plan
5. Method of calculationReview of progress against
milestones approved by IT STEERCO
Actual performance against
improvement plan
6. Data limitations None None
7. Type of indicator Leading Leading
8. Calculation typeAssessment of actual project status
against agreed milestonesManually
9. Reporting cycle Quarterly Quarterly
10. New indicator n/a n/a
11. Desired performance Achievement of agreed milestones Achievement of agreed milestones
12. Indicator responsibility CFOHead: Stakeholder Management &
Strategy
Improve Communication
1. Indicator title Brand survey conductedImplement 80 - 100% of 2018/19 marketing and communications campaigns.
2. Short definition Brand survey Marketing campaigns
3. Purpose/importance To measure brand visibility Raise the brand profile
4. Source/collection of data Report to EXCO Report to EXCO
5. Method of calculationCount the number of survey findings
implemented
Count number of marketing cam-
paigns implemented
6. Data limitations None None
7. Type of indicator Leading Leading
8. Calculation type Count Count
9. Reporting cycle Quarterly Quarterly
10. New indicator n/a n/a
11. Desired performance Target Target
12. Indicator responsibilityHead: Marketing and Communica-
tions
Head: Marketing and Communica-
tions
70 ECIC STRATEGIC PLAN 2018/19-2020/21
Improve Business Development and Customer Management
1. Indicator titleNumber of research projects to
identify new opportunitiesValue of projects approved
2. Short definitionResearch Projects for trade
opportunities
USD value of insurance applications
approved
3. Purpose/importanceTo implement a business
development plan
To increase the value of insurance
applications approved
4. Source/collection of dataProject progress report submitted to
EXCO and Board minutesMinutes of the Board
5. Method of calculation Progress against agreed milestonesSum the value of insurance
applications approved by the Board
6. Data limitations None None
7. Type of indicator Leading Leading
8. Calculation typeAssessment of actual project status
against agreed milestonesCalculated
9. Reporting cycle Quarterly Quarterly
10. New indicator n/a n/a
11. Desired performance Achieve agreed milestones Target
12. Indicator responsibility COO COO
Increase Capital Base
1. Indicator title Percentage increase in equity
2. Short definition % increase in equity
3. Purpose/importanceTo increase the capital base of ECIC to support the growth and sus-
tainability the business
4. Source/collection of data Quarterly management accounts and Audited annual results
5. Method of calculation Year on year increase in basic own funds/equity
6. Data limitations None
7. Type of indicator Lagging
8. Calculation type Calculated
9. Reporting cycle Quarterly
10. New indicator n/a
11. Desired performance Target
12. Indicator responsibility CFO
ECIC STRATEGIC PLAN 2018/19-2020/21 71
Improve Stakeholder and Customer Satisfaction
1. Indicator titleCustomer satisfaction survey conducted and survey
findings implemented
2. Short definition Customer Satisfaction Survey
3. Purpose/importance To measure the customer satisfaction index
4. Source/collection of data Results of the customer satisfaction index
5. Method of calculation Customer survey
6. Data limitations Survey only conducted biennially
7. Type of indicator Lagging
8. Calculation type Survey
9. Reporting cycle Annual
10. New indicator n/a
11. Desired performance Achieve required level of satisfaction
12. Indicator responsibility CEO
72 ECIC STRATEGIC PLAN 2018/19-2020/21
ANNEXURE B: MATERIALITY AND SIGNIFICANCE FRAMEWORK
1. SCOPE
The Board of the Export Credit Insurance Corporation (ECIC) is responsible for developing a Materiality and
Significance Framework that must be updated annually before the start of the financial year. The Materiality and
Significance Framework must be incorporated into the Strategic Plan of the ECIC and the annual report should
detail the framework applied during the year.
2. LEGISLATIVE REQUIREMENTS
Section 54(2) of the Public Finance Management Act (Act no. 1 of 1999) (PFMA) requires that the accounting
authority (Board of the ECIC) must inform the relevant treasury and submit relevant particulars to its executive
authority for approval in respect of any of the following qualifying transactions:
• participation in a significant partnership, trust, unincorporated joint venture or similar arrangements [section
54(2)(b)];
• acquisition or disposal of a significant shareholding in a company [section 54(2)(c)];
• acquisition or disposal of a significant asset [section 54(2)(d)];
• commencement of cessation of a significant business activity [section 54(2)(e)]; and
• a significant change in the nature or extent of its interest in a significant partnership, trust, unincorporated
joint venture or similar arrangement [section 54(2) (f)].
Section 55(2) (b) (i) of the PFMA requires the annual report and financial statements of a public entity to “include
particulars of any material losses through criminal conduct and any irregular and fruitless and wasteful expendi-
ture that occurred during the financial year”.
Note: The National Treasury, however, indicated that the intention was for the materiality measurement to also be
applicable to irregular expenditure and fruitless and wasteful expenditure. In anticipation of the effective change in
the legislation, it will be interpreted accordingly in this framework.
In terms of section 55(1) (d) of the PFMA the annual report and financial statements of the ECIC must be submit-
ted to the National Treasury. Based on the submitted information, the National Treasury may decide to conduct
further investigations into the activities of the ECIC. As a result, it is important for the ECIC to set the materiality
and significance figures at an appropriate level to ensure that the correct information is included in the annual
report and financial statements, and communicated to the National Treasury for approval.
ECIC STRATEGIC PLAN 2018/19-2020/21 73
The Treasury Regulations regarding materiality and significance as amended in May 2002 include the following:
• TR 28.1.5 – “for purposes of material (sections 50(1), 55(2) and 66(1) of the PFMA) and significant (section
54(2) of the PFMA), the Board must develop and agree a framework of acceptable levels of materiality and
significance with National Treasury in consultation with the external auditors.”
• TR 28.2.1 – “The annual report of public entities shall detail the materiality / significance framework applied
during the financial year.”
• TR 29.1.1(f) – “The corporate plan must include” ….” A materiality / significance framework.”
• TR 301.3(e) – The strategic plan must include the materiality / significance framework.’
3. DEFINING “MATERIALITY” AND “SIGNIFICANCE”
3.1 Materiality
Materiality is defined in the Handbook of International Auditing, Assurance, and Ethics Pronouncements (2005
edition) as follows:
“Information is material if its omission or misstatement could influence the economic decisions of users taken on
the basis of the financial statements. Materiality depends on the size of the item or error judged in the particular
circumstances of its omission or misstatement. Thus, materiality provides a threshold or cutoff point rather than
being a primary qualitative characteristic which information must have if it is to be useful.”
The materiality of losses through criminal conduct, irregular expenditure and fruitless and wasteful expenditure
should be evaluated both individually and in aggregate.
3.2 Significance
Significant is defined as “extensive or important enough to merit attention” and may, therefore, be interpreted as
of relative importance to the ECIC as a whole. Thus, a transaction will be significant if conducting the transaction
is vitally important in order to fulfill the ECIC’s mandate and for it to operate effectively. These types of transactions
could include a major re-structuring of the balance sheet through changes in financing or accounting policies, etc.
As with “material” there is no set rule for calculating a “significant monetary value”. The ECIC should consider the
importance of the transaction, that is, the impact of the transaction on the ECIC as a whole.
From the interpretations above, it can be seen that there is a difference between “material” and “significant”. Sig-
nificant is larger than material, as a significant transaction impacts on the ECIC as a whole. An occurrence may be
material but not necessary significant, whereas any occurrence that is significant will be material.
The materiality figure calculated by the ECIC should not exceed the figure used (reviewed annually) by the external
auditors, because it could indicate a difference of opinion regarding the materiality of misstatements.
74 ECIC STRATEGIC PLAN 2018/19-2020/21
4. DETERMINING THE MATERIALTY / SIGNIFICANCE LEVELS
Factors to consider in determining the materiality and significance levels for the ECIC include, but are not limited
to:
4.1 Nature of the ECIC business
The ECIC should be guided by its accountability and the sensitivity of its accounts, activities and functions regard-
ing its regulatory duties. The ECIC should also consider the impact that its materiality and significance framework,
and therefore the information reported to the National Treasury, could have on decisions and actions taken by the
National Treasury.
4.2 Statutory requirements
Materiality and significance levels may be influenced by considerations such as the legal impact of those Acts with
which the ECIC is required to comply. The ECIC should consider all pertinent statutory requirements in formulating
its materiality and significance framework.
4.3 Risks
There is an inverse relationship between materiality / significance and the level of risk; that is, the lower the risk,
the higher the materiality / significance level, and vice versa. For example, where the internal controls preventing
/ detecting irregular, fruitless or wasteful expenditure are insufficient, the control risk is high and the materiality
needs to be set at a lower level. The ECIC should look at risk management limits set for transactions of an oper-
ational nature.
4.4 Quantitative and qualitative factors
The ECIC should take both quantitative (amount) and qualitative (nature) factors into consideration. Although
significance may contain quantitative elements, it may require more qualitative considerations in comparison to
materiality. This in turn requires professional judgment and particular regard for the specific transaction in the
context of the ECIC as a whole. Due to the fact that the decision as to which qualitative factors should be con-
sidered in setting the significance level requires notably more professional judgment, the Board should consider
this decision.
4.5 Nature of the transaction
In setting a monetary value for significance, it may be practicable to differentiate between the following two types
of transactions:
• transactions that are operational in nature, that is, part of the ECIC’s normal, everyday business of regulating
financial institutions; and
• transactions that are strategic in nature, that is, outside the ECIC’s normal, everyday business or transactions
that are non-routine or that would impact on the business or financial position of the ECIC as a whole.
Losses resulting from criminal conduct may be seen as material based on the public accountability of the ECIC,
regardless of the monetary value of the amount.
Refer to Annexure A for the materiality / significance factors that have been taken into account in arriving at the
Materiality and Significance Level for the ECIC.
ECIC STRATEGIC PLAN 2018/19-2020/21 75
5. COMPLIANCE
To ensure compliance to the PFMA the following steps will be taken:
DETAILPerson
ResponsibleDate
1 Review materiality and significance framework in consultation with
external auditor
CFO As per Treasury
guidelines
2 Approval of framework Board Annual - March
3 Include framework in corporate plan and strategic plan CFO Annual – March
4 Include framework in annual report CFO Annual – July
5 Include particulars of any losses through criminal conduct, irregular
expenditure and fruitless and wasteful expenditure that occurred
during the financial year in annual report
CFO Annual - July
6 Maintain a register on all irregular expenditure and fruitless and wasteful
expenditure that occurred during the financial year
Head of
Procurement
Ongoing
7 Report all material / significant items to Board Management As and when they
occur
DETERMINING THE MATERIALITY AND SIGNIFICANCE LEVELS
1 APPROACH
To determine the materiality and significance levels, the following principles will be applied:
1.1 Main factor to determine material amount
The operating requirements of the ECIC are to ensure that all its expenses are recovered through insurance pre-
miums and investment income. The ECIC also has legislative requirements to hold a minimum amount of capital
to reduce the risk of insolvency from paying claims.
1.2 Percentage to be used
The percentage used will be calculated by using the following factors as a guideline:
• percentage used in prior year;
• percentage used by external auditor in determining the external audit materiality amount; and
• comparison with possible external entities.
The percentage will be adjusted taking qualitative factors into consideration.
SUB - ANNEXURE B
76 ECIC STRATEGIC PLAN 2018/19-2020/21
With regard to the information to be presented to National Treasury in terms of Section 54(2) of the PFMA,
the following quantitative factors will be considered:
• Qualifying transactions of an operational nature: 1% of Total Assets.
• Qualifying transactions of a strategic nature: 1% of Equity.
• Regardless of the monetary value thereof all direct equity investments:
o greater than 20% require formal information to the Executive Authority; or
o greater than 50% require approval by the Executive Authority.
• S54(d) Except with regards for salvaging purposes in respect of underwriting activities, any asset that com-
prises 30% of Total Assets.
• S54(e) If the activity comprises a capital outlay of, or will require an upfront capital outlay of, 30% of Total
Assets.
• S54(f) Where the change is not covered by the mandate of ECIC.
A qualifying transaction may also be considered significant based on considerations other than financial when,
in the opinion of the Board, it is considered to be significant for the application of section 54.
The decision on which non-financial issues may be considered rests with the Board as representative body of the
shareholder. As an example, the Board may consider a qualifying transaction as significant when it could impact
significantly on a mandate of the Minister.
The following range of percentages is generally used by the audit profession to determine materiality:
• 0.25% to 1% of gross revenue;
• 0.5% to 2% of total assets;
• 1% to 2% of gross profit;
• 2% to 5% of shareholders’ equity;
• 2.5% to 10% of pre-tax profit.
2. PARAMETERS TO USE FOR MATERIALITY FACTOR
2.1 Quantitative bases for consideration
Revenue2016/17
R’000
2015/16
R’000
2014/15
R’000
Net Insurance Premium Revenue 475 955 621 103 379 999
Claims Incurred 246 342 76 167 60 766
Assessment Fees 3 316 14 030 14 314
Net Investment Income 135 374 254 300 277 102
Other income 142 21 38
Total revenue 861 129 965 621 732 219
ECIC STRATEGIC PLAN 2018/19-2020/21 77
Assets2016/17
R’000
2015/16
R’000
2014/15
R’000
Total Assets 8 560 482 9 432 312 7 964 563
Shareholders’ Equity2016/17
R’000
2015/16
R’000
2014/15
R’000
Shareholders’ Equity 3 569 876 5 247 856 4 324 239
Profit before tax2016/17
R’000
2015/16
R’000
2014/15
R’000
Profit/(Loss) before tax (1 104 078) 345 557 277 513
2.2 Quantitative ranges for consideration
Minimum 2016/17 2015/16 2014/15
0.25% of Revenue 2 152 823 2 414 053 1 830 548
0.5% of Assets 42 802 410 47 161 560 39 822 815
2% of Shareholders’ Equity 71 397 520 104 957 120 86 484 780
2.5% of Profit before tax 27 601 950 8 638 925 6 937 825
Maximum 2016/17 2015/16 2014/15
1% of Revenue 8 611 290 9 656 210 7 322 190
2% of Assets 171 209 640 188 646 240 159 291 260
5% of Shareholders’ Equity 178 493 800 262 392 800 216 211 950
10% of Profit before tax 110 407 800 34 555 700 27 751 300
2.3 Basis percentage to be used
As stated in the framework the materiality amount should not be more than the materiality amount used for ex-
ternal audit purposes. The materiality amount that was used by the external auditors for the 2016/17 audit was
based on 0.5% of the 2015/16 Total Assets. The norm in the audit industry is to use Profit before tax but due
to the volatile nature of this base (as can be seen in 2.1 and 2.2 above) the external auditors chose to use Total
Assets due to its stability. They also chose to use the lower end of the range as this was their first year performing
the audit of ECIC.
It is recommended that separate materiality levels be set for information of an operational and strategic nature as
well as for reporting to EXCO, Board and inclusion in the Annual Report.
For Income Statement items, it is recommended that 0.5% of the Revenue budget for the financial year be used.
The operating requirements of the ECIC are to ensure that all its expenses are recovered through insurance pre-
miums and investment income, and therefore materiality should be based on the Revenue budget.
78 ECIC STRATEGIC PLAN 2018/19-2020/21
For Investments, it is recommended that 0.5% of Investments be used. The ECIC has legislative requirements to
hold a minimum amount of capital to reduce the risk of insolvency from paying claims. The Investment balance
makes up 75% - 80% of the Total Assets balance and decisions thereon are made on a long-term basis with
short- and medium-term volatility expected. Therefore, decisions on Investments should be dealt with separately
from other Statement of Financial Position items.
For other Statement of Financial Position items, it is recommended that 0.5% of Total Assets less Investments be
used. The Investment balance makes up 75% - 80% of the Total Assets balance and decisions on other State-
ment of Financial Position items should be dealt with separately from Investments.
3. CALCULATION OF MATERIALITY AMOUNT
Income Statement 2016/17 2015/16 2014/15
Revenue 861 129 000 965 621 000 732 219 000
Percentage used 0.50% 0.50% 0.50%
Materiality amount 4 305 645 4 828 105 3 661 095
Investments 2016/17 2015/16 2014/15
Investments 6 685 902 000 7 072 663 000 2 582 549 000
Percentage used 0.50% 0.50% 0.50%
Materiality amount 33 429 510 35 363 315 12 912 745
Statement of Financial Position 2016/17 2015/16 2014/15
Total Assets less Investments 1 874 580 000 2 359 649 000 5 382 014 000
Percentage used 0.50% 0.50% 0.50%
Materiality amount 9 372 900 11 798 245 26 910 070
4. REASONABLENESS REVIEW
The materiality for the 2016/17 audit as determined by the external auditors was R45 000 000 as per the
calculation detailed in 2.3 above.
The materiality for 2015/16 as determined by the previous external auditors was R28 400 000.
5. CONCLUSION
The materiality amounts recommended for the ECIC for the financial year 2017/18 are:
Income Statement R4 000 000
Investments R33 000 000
Statement of Financial Position R9 000 000
