‘There’s a constant need for innovation when you’re in financial services.’
Lynette Mutsekwa joined Europ Assistance earlier this year, and being an Africa specialist, Lynette is a CFO who has acquired substantial experience in South Africa, as well as other Africa markets, experience that she can draw on as Europ Assistance grows their presence into the continent.
CIARAN RYAN: Today’s podcast is sponsored by Draftworx, which provides automated drafting and working paper financial software to more than 8000 accounting and auditing firms and corporations. CFO Talks is a brand of the South African Institute of Business Accountants. It’s my great pleasure today to welcome Lynette Mutsekwa, who is CFO and board member for Europ Assistance Africa, that’s part of the Generali International Group, which has its head offices in Italy and France. The Generali Group specialises in medical and travel insurance, vehicle assistance, emergency and health services, to name a few. Lynette is a CA with an MBA from the Gordon Institute of Business Science, and she previously held the position of CFO Southern Africa for Mastercard. She joined Europ Assistance to help manage the company’s expansion programme, as well as to transform and restructure the finance function to ensure optimum service delivery to internal and external parties. She is also responsible for the legal, actuarial and audit departments of the organisation, which report directly to her. First of all, welcome Lynette, where are you talking to us from?
LYNETTE MUTSEKWA: Hi Ciaran, thank you so much for having me and it’s such an honour to be here. I’m talking from Waterfall, Johannesburg, South Africa.
CIARAN RYAN: Maybe you can kick off and just tell us a little bit about yourself, where you grew up and how you ended up at the Generali Group?
LYNETTE MUTSEKWA: I grew up in Harare, in a family of four. My father, who was in the finance field, inspired me to become a chartered accountant. So I actually started my training with Ernst & Young in Harare in 2004 and I was with Ernst & Young for just under five years. After my five years training with Ernst & Young, I then moved to a company called CFI Holdings, a pretty big company in Zimbabwe, a listed conglomerate, and they’re a vertical chain business where the end product is actually selling in supermarkets, but they have a belief of producing 40% of everything that they sell. So they also had farms, they had mills and a number of businesses that supported the products that they sold in the supermarkets. So I initially joined CFI as the group internal audit manager, a position that I was in for roughly about a year before I got promoted to hit up the finance function for one of the biggest subsidiaries within the group.
I think that’s where my finance journey started. At the end of 2011, I decided to move to South Africa and since then my most notable experience actually started at TransUnion in 2012, where I joined the group as business planning and analysis manager. So that was the title of the position. I joined TransUnion Africa, the credit bureau, at a point where they were interested in expanding their business into the rest of Africa. So they were already existing in African markets, more in your Southern Africa region, being Namibia, Swaziland, Botswana and Zimbabwe, and they were interested in growing their presence into the rest of Africa, particularly Western and Eastern Africa. Instead of setting up brand new credit bureaus in the those markets, they took on a strategy to acquire existing bureaus in those African markets. So I joined the group at a point where they had just acquired 18 companies in eight countries. So they brought me on board to handle the last bits of the merger and acquisition process of those entities and they also wanted somebody to who had the capabilities to make the integration of the entities work. So I remember when I joined, I actually didn’t have a job description, I was just told that I had to make the expansion into the rest of Africa work. That’s what I pretty much did for two years, and I did so successfully, such that at the end of two years, I then got promoted to become senior manager of financial planning and analysis for Africa. In that position is when I was headhunted by Mastercard Southern Africa in 2016. So the reason why Mastercard Southern Africa approached me is they were looking for somebody who had the capabilities and who had the experience of working in African markets outside of South Africa.
So based on my experience with TransUnion Africa of integrating the businesses into TransUnion, rolling out products, rolling out HR systems, rolling out finance systems and talking to regulators, they were looking for somebody who had that hands-on experience in Africa markets because they were also at that point where they wanted to grow their presence in Africa markets, outside of South Africa. So when I joined Mastercard Southern Africa, in revenue terms South Africa was contributing 99% of the total revenue of the Southern Africa division and the rest of Southern Africa was contributing 1%, and they were looking for somebody who was financial but had the capability to take the business and grow the business a lot more into Africa. So that role was quite encompassing for me when I joined Mastercard because I travelled to the Southern Africa markets, I met with regulators, I met with customers and to a point where we actually set up offices in some of the African markets, and it was quite a successful growth journey…
CIARAN RYAN: Can I just interrupt you there, just tell us what year this was that you were setting up this network of offices around Africa and just some of the cities where you were setting up offices. I’d also like to hear, so 99% of the income at that time was coming from South Africa, only 1% from the rest of Africa. Did that profile change after the setup?
LYNETTE MUTSEKWA: Yes, that definitely changed. So when I joined in 2016, that was the setup, which was 99% to 1%. We set up an office in Mauritius, we set up an office in Zimbabwe, we also set up an office in Nigeria. Nigeria was outside the Southern African market, but it actually helped a lot with the growth in Southern Africa, and that was over a period of about three years. By the time that I left Mastercard, the revenue for Southern Africa was composed such that South Africa was contributing 80% and the rest of the markets in Southern Africa was contributing 20%. This is not because South Africa decreased in terms of revenue, but the other markets grew in terms of revenue quite well to the point where they were now contributing 20% to 80%. It might sound small but in revenue terms it was quite a big shift.
CIARAN RYAN: Just to pursue that a little, it’s a interesting story because very quickly it seems that just by having offices on the ground, you were able to get some serious growth going for Mastercard in these countries.
LYNETTE MUTSEKWA: Yes, so it wasn’t just having offices on the ground, but it was actually also just having a presence, more of a presence in these African markets. So if I take, for example, when we got onto a journey to grow our presence in Zambia, the Zambia market, when you talked about a card, they only knew one card which was Visa. They didn’t really know about Mastercard. So as much as we didn’t set up an office in Zambia, getting salespeople in country to focus on growing the presence of the Mastercard in Zambia worked wonders. So it was more not just about opening offices, but just having a presence in those African markets. That presence sometimes was getting salespeople in country or business development people in country or actually getting some of the South Africa resources to travel to the different countries and meet regulators and meet different banks to just get that presence known. That’s what led to the success journey of growing into Southern Africa.
‘It’s what I call the untapped markets and you don’t have to reinvent the wheel.’
CIARAN RYAN: All right, at what point then did you join Europ Assistance?
LYNETTE MUTSEKWA: I then joined Europ assistance in 2021, at the beginning of this year. Europ assistance is also at a point where they are trying to grow their presence in Africa, so I’ve become that CFO who has acquired quite a substantial experience in South Africa, as well as other Africa markets outside of South Africa. It’s actually become a passion of mine because what I’ve realised is when you join businesses, and a lot of businesses in South Africa have gotten to a point where the growth rates are between 5% to 10% and the market is becoming saturated, but when you’re actually looking at growing the business a lot more, you start to look at Africa markets. It’s what I call the untapped markets and you don’t have to reinvent the wheel. When you move into the Africa markets, you take your products in South Africa and tailor make them slightly for other African markets and sell them there. The growth and traction that you get is quite phenomenal and very different from your normal 5% to 10% that you would get within South Africa. So a lot of businesses I’ve seen are looking to grow and a lot of that growth will actually come from expansion into the rest of Africa markets. So that actually led to my joining Europ assistance, they are at that point where they are also looking to grow their presence into the rest of Africa, and they believed that I was the right person to help them with that journey.
CIARAN RYAN: Wow, okay, that’s a fascinating story. Okay. So you became a bit of an Africa specialist and you’ve been recognised as a CFO and as somebody who’s done this before, you’ve gone out there and you’ve set up these networks and you’ve grown businesses across the continent.
I think just for a little bit of context, maybe give us a bit of background about Europ Assistance and the Generali Group and its operations in Africa. So what does it have at the moment and what are you planning to roll out?
LYNETTE MUTSEKWA: I’ll talk a little bit about the Generali Group and then I’ll talk about Europ Assistance. Europ Assistance is a wholly-owned company and it’s wholly owned by the Generali Group, which is one of the largest global insurance and asset management providers. The Generali Group has its head office in Italy, and it was established in 1831, and it’s present in just over 50 countries around the world, with more than 72 000 employees serving 69 million customers. Europ Assistance being wholly owned by the Generali Group has its head office in France, the Africa operations were established in South Africa in 1984, the head office for Africa is in South Africa. The business currently offers the most comprehensive portfolio of products in the country. So whilst Generali Group is more of an insurance and asset management provider, Europ Assistance is primarily focused on emergency assistance services. The company’s largest product offerings are emergency roadside, home assistance, medical, travel assistance, services and legal services as well. So what that means, and I will try to put it simply, so, Ciaran, you have your car insured with an insurer in South Africa but what happens when you get involved in a car accident, your insurer gives you a number that you need to call in the case of an emergency, in this case being a road accident. The number that you are given by your insurer is actually not the insurer’s number but then the number comes directly to Europ Assistance, so when you call that number, you think you are talking to your insurer but you’re actually talking to Europ Assistance. Europ Assistance then sends a tow truck to you and they help you to get your vehicle off the road and other roadside assistance services that you require. Similarly in the health environment, you have your medical aid with a certain medical aid insurer but if something happens at home, if you cut your hand while you’re cooking and you require an ambulance to be sent to your house, the number that you actually dial into is Europ Assistance and Europ Assistance is the one that then sends out the ambulance to you. That’s pretty much what Europ Assistance does. In the market we are not known as an insurer and it’s not a name that you will find on a lot of vehicles but then we are the service providers behind your insurer and insurance companies. One of our key differentiators and advantages in the field is that we have direct access to a prestigious global group of companies who provide tried and tested cutting edge services on an ongoing basis. So that means even with your travel, even though your insurance is in South Africa, if you travel to Swaziland and something happens in Swaziland, you’ll be able to get very quick assistance through our networks because we do have those networks that are set up in different countries. Even internationally, if you were to travel to Italy and if something happens there, even though your insurance is in South Africa, you are able to quickly get assistance from our Europ Assistance Italy office.
CIARAN RYAN: The operations in Africa, where are you planning to roll this network out to, which countries?
LYNETTE MUTSEKWA: At the moment, again we are at a situation like when I joined Mastercard, where South Africa is contributing 99% of the revenue and the rest of Africa is contributing 1%. I’m hoping that history will repeat itself and after two to three years the rest of Africa will be contributing 20% and South Africa will be contributing 80%. In terms of the markets that we are looking to roll out to at this particular point, the sky is the limit, as long as it’s called Africa and as long as we have insurance companies in those countries, we’re actually looking to partner with them and provide our assistant services. It will obviously not happen overnight, it will be a journey, but we’re not limiting ourselves at the moment to one particular country. Our services are currently available in different markets, but they’re serviced out of South Africa. So we’re actually looking at getting to a point where we set up offices in different markets. At the moment our efforts have been a little bit derailed by Covid but as soon as we get over that hurdle, I think that we’re going to move a lot faster with our expansion plans.
‘During this Covid period is when I have witnessed the importance of diversity and diversification in a business.’
CIARAN RYAN: Give us a bit of an idea of the business experience, particularly in the insurance and service space that you’re involved in, during the Covid lockdowns. One would imagine health insurance did well, travel insurance probably did quite terribly. Is that what actually happened?
LYNETTE MUTSEKWA: That’s exactly what happened. During this Covid period is when I have witnessed the importance of diversity and diversification in a business. So as I mentioned previously, we offer travel assistance, we offer auto, which is typically your roadside assistance, we offer health, we offer a home. Historically, the majority of our revenue has come from the auto and travel sector. So what happened to our Africa operations from the time that the president announced the lockdown last year on March 26 was that travel pretty much stopped, which means that our services were not required in the travel sector. When it comes to auto, the fact that the country went into lockdown for about two to three months, meant that there were a lot less travellers on the roads. Even after that, with people working from home, you actually have a lot less vehicles on the road and even though this is a good thing, for our business the fact that there are less cars on the road means that there are less accidents on the road, which means that there’s less emergency roadside services that are required. So we actually saw the revenues in those business lines dramatically reduce. When we look at travel, the business line suffered quite terribly, but the positive that came out of the Covid situation and the fact that we have a diverse range of products is that whereas our health business line historically wasn’t the highest contributor to revenue, we actually started seeing the health revenue going up so much. This is because of the Covid cases, we would get a number of people calling in requiring an ambulance to go to the hospital because they’ve contracted Covid, and maybe they can’t breathe, and they need to be rushed to the hospital. The fact that people are also working from home a lot more, there are more emergencies that are happening in the home setup, so we’re getting a lot more calls when it comes to health and emergency services. Then we also have the home business line, which looks at your geysers, for example, your appliances, your electricals at home. So if your geyser bursts and you’ve got insurance, you call into Europ Assistance, we’ll send in a technician to look at your geyser. I don’t know if more people are bathing this year because they’re at home but we’ve had a lot of geysers that are breaking down and bursting. As a result, those business lines have started to do quite well. So this is the perfect case where product diversification has worked well and it has helped our business to keep afloat and do well during the Covid crisis. Then when we look at Europ Assistance globally, most of the businesses, it’s more your auto and travel because that’s where most of the revenues come from. So in Europ Assistance Africa, we have established more business lines, so your home and the emergency services that I’ve talked about.
In addition to that, we also have a service that we call outsourced solutions, where we outsource our solutions to telcos, where we provide the emergency services, which is typically your 112…
CIARAN RYAN: Sorry, what is 112?
LYNETTE MUTSEKWA: So 112 is if you are on an MTN or Vodacom or Cell C line and you’ve got an emergency at home and you need government services such as ambulance or the police, you call 112. So it’s similar to 911 but in South Africa it’s 112. We provide this service to telcos, the 112 calls come into Europ Assistance, we chat to the person, we determine whether they are needing the police to come to their house, whether they are requiring a government ambulance to come to their house. So this is another product that we offer only in South Africa and it’s not typically offered in the other Europ Assistance offices. Our business has done quite well, even under the Covid circumstances, mainly because of the product diversification, the product diversity, that we had from a while ago.
CIARAN RYAN: Would it be correct to say that your health business in South Africa is now bigger than the travel business?
LYNETTE MUTSEKWA: Yes, absolutely.
CIARAN RYAN: That’s purely as a result of the Covid lockdowns that changed the whole nature and mix of your business. Now give us a bit of detail on the expansion programme you joined there because you are an Africa specialist, you’ve done this before to roll out this network, what type of expansion are we talking about? Is it the same kind of thing, is it health services, is it auto insurance, is it the full suite that you are already offering in South Africa just being replicated elsewhere in Africa?
LYNETTE MUTSEKWA: The first thing, one of my mandates was to help to strengthen diversification of products that speak to our mission and vision. So we are already have the suite of products that we offer to the market and the first thing, the major thing that we’ve been focusing on this year is to strengthen these products. We’ve recently rolled out our lifestyle rewards programme, where we are adding to the products that we have. So for example, where we have the roadside assistance, on top of just the roadside assistance we also offer rewards and discounts. So for example, we offer discounts on tyres. If you get involved in an accident, whilst we tow your vehicle, we are offering that service to actually say we can get you discounted tyres to put on your car. Then in addition to that, we are looking at mergers with other entities that share a common value that help us to compliment what we already offer in the market. So with your roadside assistance, we are looking at mergers with dealerships that actually fix the cars after an accident has taken place. So we are not just going to be towing the vehicles to the dealership, but we want to look at acquisitions and mergers and partnering with businesses that help or share common value with us. Once we’ve got this bedded, then the main goal is to take those products into other territories and that’s the key goal over the next two to three years, to take those products and replicate them in other markets, but not just as a product offering to South African customers who are travelling to other regions, but also customers who live in those regions and they’re actually using those Europ assistance products. So that’s pretty much the growth and expansion strategy that we’re looking at.
‘When you are in financial services, you can never get comfortable.’
CIARAN RYAN: Okay, so previously when you were CFO at Mastercard Southern Africa, and before that TransUnion, the credit bureau, you have quite a background in financial services, but what would you say was the biggest challenge that you had to face in your career?
LYNETTE MUTSEKWA: When you are in financial services, you can never get comfortable. I’d say financial services, insurance services industry, you don’t get comfortable. There’s a continued need to innovate and customers now have more choice, so there’s an element to customise products to customer needs. So you never get to a point where you say that this is the product that we were offering in 2005 and it’s still the same product that we’re offering in 2021 because that’s a clear recipe for unsustainability of an organisation. So I wouldn’t call it a challenge per se but what I’ve realised in the service industry is that you can’t ever relax and get comfortable, there’s a constant need to be innovating, there’s a constant need to be in touch with your customers and find out what it is that your customers require, and there’s also a constant need to tailor make products to meet the requirements of different customers.So gone are the days where you just have one product, where you’ve got bread that meets the needs of everybody, you need to really segment your market and tailor make products that meet their requirements. So there’s a constant need for innovation when you’re in financial services. Whilst most would call that a challenge, it’s kept me on my feet. I’m a CFO who really likes being involved in the business, so I’ve enjoyed the fact that in all the businesses, you don’t get comfortable, there’s a constant need to innovate and that keeps me excited about my job.
CIARAN RYAN: We’re running out of time here a little bit, but I’ve got a few questions to go. What would you say about how the role of the CFO or finance executives have changed over the years, is it more challenging than it was in the past and if so, why is that?
LYNETTE MUTSEKWA: I wouldn’t say it’s more challenging, it’s more interesting. So if I go back to my days where I was with CFI Holdings and I was heading up one of the biggest subsidiaries there, my main focus was on making sure that I received an unqualified audit opinion by the auditors at the end of the year. I was one of those CFOs who easily could rip through a set of financial statements. I was known for preparing a set of consolidated financial statements using IFRS 3, I was known for being very technical. So my role in the past as a head of finance, I feel was very, very, very technical and as I have progressed with my career, I think I’ve moved to what you would call a modern CFO and I think this is what most modern CFOs have become. I would summarise a modern CFO into five key roles that are now there. So as a modern CFO, I’ve realised that I focus a lot more on strategy formulation, there’s a lot of focus on investment opportunities and value creation. So when I talk about expansion into Africa, when I talk about mergers with businesses that are aligned to our vision and mission, so those are the sort of investment opportunities that create value that the modern CFO looks at a lot more. We have become the custodians of the structure and the sustainability of the organisation. So always making sure that your product offering guarantees that sustainability in the long term. There’s a lot of talent development through communication with the talent in the business. Then obviously, because this is financial services, there’s a lot of regulation that’s there, so you’re also the custodian of compliance and governance. So quite a move from your technical accountant, who was more interested in just the financials, your debit and credit, it’s now a CFO who’s really embedded in the strategy of the business.
CIARAN RYAN: You’ve probably read some of the studies and the opinions about the changing role of the CFO. The South African Institute of Business Accountants has a designation, CFO (SA) or certified financial officer, and basically, it’s in recognition of these disciplines that you’re not really going to be taught in accounting school. You mentioned that in the beginning, the team leadership, the interaction, the strategy and some of the softer skills that come with being a CFO that you definitely don’t get taught in the accounting school. What is your feeling about that and are there some things that you’re going to learn on the job, not through formal academia?
LYNETTE MUTSEKWA: Absolutely, so because by background I am your typical accountant, I am one of those people who set an objective and I go forth to achieve that objective. That was my character, moving out of articles and out of my training. But then what I’ve realised over time and especially with my workings at TransUnion, where I had to roll out products and I also had roll out a new ERP system, I realised that you can’t just have a goal and set a time and say, this is when I’m going to achieve it and have it achieved. Whatever goal that you set, you need to realise that you need to work with people to achieve that goal. During my time with TransUnion and when I was working with the Africa entities, I had to learn to always take a step back and not always just be goal only oriented, but first understand the people that I’m working with. So it’s those softer skills that I don’t think we were quite taught as part of our training. So I’ll give you an example I worked in Nairobi, Kenya, for about six weeks where I was doing a roll out of the ERP system and I remember when I initially walked into that office, I had to adjust my approach instead of just getting in and saying, hi, we are changing the accounting system. I had to take a step back and actually understand the accounting system, the ERP that was being used at that particular point and then get to a point where I say, can you please tell me if you’ve got any challenges with your current ERP. Once those challenges were communicated, I then pitched this new ERP and I said, look at this new ERP that we have, it has the potential to actually reduce your workload, a report that normally takes you four hours to pull out from your system can now take you two minutes to pull out. So it’s getting that buy in from people that I had to learn to do. So at the end of two years, the roll outs that we did were quite successful but I think it’s not because I possessed any technical skills, but it was the fact that I learned to slow down and get to understand the people who I’m working with, understand what it is that moved them so that I could then move by whatever goal that I had at this particular point.
CIARAN RYAN: Okay, so we’ve got two minutes left, very quickly, what do you do in your downtime?
LYNETTE MUTSEKWA: I hike, so I run and I hike, that’s what I do and I also spend a lot of time with my family.
CIARAN RYAN: You have a family, tell us about that.
LYNETTE MUTSEKWA: I have an amazing three-year-old girl, so I enjoy spending time with her and I also spend a lot of time with my husband, so that’s my downtime.
CIARAN RYAN: Okay, a young three-year-old and you’re working from home at the moment, so you get to spend more time with your child.
LYNETTE MUTSEKWA: Yes, I’m actually surprised that she hasn’t walked into the room during our interview, she normally does, you would have heard somebody saying mommy in the background. But it’s been good in that at least I get to see her grow but still focus on work, so it’s been a good compromise.
CIARAN RYAN: And your husband, what does he do?
LYNETTE MUTSEKWA: My husband is an engineer.
CIARAN RYAN: Okay, so accounting and engineering in the same house.
LYNETTE MUTSEKWA: I control the budget that’s all I can say [laughing].
CIARAN RYAN: I bet you do [laughing].
LYNETTE MUTSEKWA: He comes up with the grand ideas.
Women, work and the will to lead
CIARAN RYAN: Okay, good. Final question, are there any books that you’d recommend?
LYNETTE MUTSEKWA: I have started reading a lot this year because I’m part of an amazing book club of ladies. I actually want to recommend two books and the first one is called Lean In by Sheryl Sandberg. It talks about women, work and the will to lead. The book resonated with me as it touches on another subject that I’m quite passionate about, which is women empowerment. So it starts by highlighting the challenges that women face but it also reminds us of how far we have come. So when, for example, I think about my mother, she was one of the smartest people who I know, but because she grew up in different times to the times that I’ve grown up in, her professional success was quite limited. So the book, first of all, reminded me of the journey that we have taken as women to become leaders and I’m very grateful of where we are. It also then talks about how we should own our successes as an individual and it talks about the different elements that you can use to actually become a successful individual. So I find it to be a very powerful book. The second book that I’d recommend, which I’m actually currently reading, is called Halftime: Moving from Success to Significance by Bob Buford. In a nutshell, Halftime talks about moving from success to significance. It says that an individual has two parts to her life, there’s the first half of your life and the second half of your life. During the first half of your life, you spend it chasing success. You are going to school, getting an education, building houses, so it’s pretty much how you are building your career and you’re chasing success. It resonates with me because I feel like that’s what I’ve done for the first half of my life. I’m now at that point where I’m actually moving from just trying to be successful but to be significant. So I’m realising that over the years, there are talents that I have gained and it’s time for me to actually return those talents to other people to help other people to grow. The learnings that I’ve gathered over the years, it’s time for me to return those learnings. The money even that I have saved, it’s time for me to actually use that money to help somebody else. So it’s talks about the next step of my life, the second half of my life and where I want it to be. So it’s a book that’s really speaking to me at the moment, talking about that change from success to significance. I would recommend it to anybody else who feels like they’ve reached the halfway point of their life and they want to change from not only just being successful, but being significant. I’ve had a good first half of my life and I truly believe that the second half of my life can become a lot better than the first by just achieving that significance, helping others and helping the continent to grow. That is my first passion after all.
CIARAN RYAN: Wow, what a great story. A lovely way to wrap it up there. What I think I really enjoy hearing from you is how you approached the job, you obviously got the technical excellence that you needed for the position that you have, but developing these additional skills and these additional passions, which obviously came through, it’s your own character and internal nature coming out. I think it’s clear that you wanted to make an impact and you did that and you expressed it in a way which I think many CFOs would love to do, but don’t. You went out and you built networks and you built businesses. So you’ve got a very entrepreneurial way of looking at things. That’s what I take away from this. Lynette, I want to thank you so much for coming on and sharing those stories and experiences and insights. I think they were powerful insights and I think people listening to this will get something from that and maybe inspire them to look at how they can do their jobs and live their lives maybe a little bit more significantly, as you said, there at the end. So please stay in touch, we’d love to get you back on again and see how things are settling down over the next six months or so.
LYNETTE MUTSEKWA: Thank you so much and it’s been such an honour, again, to be here.