Belmont Asset Management continues its series of interviews with successful South African entrepreneurs. This month we feature Lance Allam, Geoff Banwell and Craig Ekermans, the founders of Medway.
Q1: Tell us about your business and the industry in which you operate
Our main business is the provision of supplementary medical insurance. Medical schemes today are designed to provide financial assistance for appropriate healthcare, but there can be a big difference between the definitions of ‘appropriate’ healthcare and ‘the best’ healthcare. Medway provides supplementary insurance benefits on top of medical scheme cover to take away the anxiety involved in affording the best healthcare available.
Q2: Tell us about the early days and any major milestones
In 1994, with the dawn of the new South Africa, the founders of Medway realised that government employees would begin to have freedom of choice in choosing their own medical schemes.
Medway therefore devised an innovative medical scheme package that could integrate with the employer’s payroll system and use the medical aid subsidy available to each government employee. This product proved so popular that within two years Medway had built a base of 20,000 families. Negotiations with Fedsure Life then got underway and in 1997 Medway became a wholly owned subsidiary of Fedsure. This was our first major milestone.
In 2000, the Investec group took over the Fedsure Group and we negotiated a management buy-out, again putting Medway into private hands. Between 2000 and 2009, Medway was responsible for putting some 80,000 families onto the now Fedhealth Medical Scheme. During 2009, the directors of Medway negotiated an exit strategy with Fedhealth and we embarked on building a supplementary health insurance business for our clients in the government sector.
We then launched the first comprehensive supplementary health insurance package in South Africa - our biggest success to date. This product, known as The Heritage Plan, today comprises more than 60,000 policies. We subsequently successfully entered the high income private sector market, with a range of unique products that offer higher income earners the very best in health cover.
Q3: What are your plans for your business over the next five to ten years?
Whilst we will continue to provide government employees with the very best supplementary health insurance products, we also plan to grow our new range of products for higher income families. Withinfive years we aim to be the largest supplementary health insurance player in South Africa.
Q4: How do you invest your profits to secure your personal financial future?
Medway affords all three directors a very comfortable living and we are able to draw regular dividends. All three of us have invested with Belmont Asset Management and built excellent equity portfolios in some of the finest blue chip companies in the world. We believe that a strong equity portfolio is a crucial aspect of overall financial planning and we have full faith in Belmont’s approach as the company shares our core values.
Q5: What do you look for in a wealth manager?
We look for honesty and integrity above all else, followed by knowledge and skill with an overlay of prudent, conservative financial principles. We have a long-term vision for Medway and we take a similar view with our investments. Quick profits don’t appeal to us, either in Medway or in our equity portfolios with Belmont.
Q6: What are your long-term investment goals?
We would like to build rock solid equity portfolios which can afford us future financial freedom. None of us has specific retirement plans, but all of us are mindful of the fact that financial independence and wanting to come to work every day are two totally different concepts.