What are the major challenges and changes in the funeral industry in South Africa?

In South Africa, we have various challenges to the funeral industry in a tough economic environment! Are the major role players willing and able to adapt to change and assist those who have to bury a loved one? We decided to raise some of these through a Q&A with some of the industry experts!

What do you regard as major changes and developments in the funeral industry during the past decades?

The funeral industry has experience changes whereby when comparing between the past two decades, we can see the impact those two decades had in the funeral industry. The first decade that coincided with the dawn of the new democratic government and the second decade which were characterized by the policy change when new leadership took over the governing party (President Mbeki era versus President Zuma era).

Historically the funeral industry has been looked down as a business operated by old retired people or people who inherited the business from family members. At the time it was based on the provision of a hearse, family car and coffin, anything else the families were sorting themselves.

Before the dawn of democracy, we saw mass killings across the country and this resulted in an increase in demand for the funeral services. During that period we saw black-owned and operated business which included business in the insurance broking business. It was at this time that products like funeral policy were developed inspired by the Women and Men’s Societies and Stokvels model.

  • These funeral policies have assisted to change the scope of work for Funeral Service Providers as now the client has the buying and deciding power resulting in the price increase for the cost of the funerals.
  • The pre-democracy violence led to an increase in the demand for funeral services.
  • The policy by the leadership during the first decade of democracy on the HIV/AIDS led to an increase in HIV/AIDS-related deaths resulting in more demand for the funeral services

The second decade of democracy saw a change in HIV/AIDS policy by the leadership who rolled out the ARV’s resulting in the change in mortality rate and the prolonged life of the people affected by the HIV/AIDS virus.

The political stability and the toleration of different political views saw the decline in political violence reducing the demand for the funeral services.

The entrance of many service providers who saw the demand during the peak period in the first decade led to price undercutting and a lot of competition amongst the funeral service providers.

The visible changes over the past decades are:

  1. The regulation of the Funeral Industry by the Financial Services Board (FSB) now called the Financial Sector Conduct Authority (FSCA). The impact the Underwriters have on Funeral Service Providers
  2. The entrance of Banks, Retailers and other service providers who are now selling the funeral policies over the counter. This has revenue implications on the funeral service providers.

Has the funeral industry and the major role players been able to adjust and change with the times?

The funeral industry has failed to adjust adequately and change at an appropriate rate with the times. The industry at times has been reactionary whereby the role players are protecting their territory instead of addressing issues from the industry perspective.

The major role players are dictating the pace and the smaller operators are trying to catching up with the dominant players.

It is important that the industry is able to collectively address the issues with the Government, regulators and Underwriters as a collective bargain and in that way they are able to achieve more milestone in their quest to provide better service at reasonable returns.

An example is regulations addressing the transportation of the deceased, how to deal with a convoy and how to get Local Government to assist. This needs to be addressed by the body representing the different service providers as opposed to issues being addressed by individual funeral service providers.

 

We live in a tough economic climate – Do you find this as a challenge in the funeral industry as well?

The impact of the economic climate can be felt when one examines the following factors:

  1. The ever-rising fuel and oil prices. This directly affects all the funeral service providers because the major part of the funeral is how the deceased and the family is transported. This is a marketing tool whereby the brand visibility and strength can be seen by the current client, prospective client and the competitors as well.
  2. The distance and the time it takes to perform a funeral is influenced also by the role of the local government in that it has a bearing on the number of funerals that one is able to perform in a single day.
  3. The potholed roads that vehicles have to use affect time and costs as it may set you off anything from R3 500 to R10 000 to replace or repair a potholed damaged tyres and mags.
  4. The other costs are electricity, labor, office rental, security etc
  5. The factors that local authorities are affecting the funeral industries are:
    1. The allocation of time to cemeteries where more than three funerals are allocated the same burial times and yet there is single entry and single exit lane. Future design of cemeteries must include traffic plan and traffic flow whereby the timing and the direction of the traffic is considered.
    2. It is important that road infrastructure is attended as it is more costly in more ways than one can think beyond the damaged rim and tyre.
    3. Traffic lights, traffic wardens can make life easy for both the mourners, motorist and the funeral procession.
    4. Constant communication between the funeral service providers and their local governing authorities.

Do you believe South Africans need more education and awareness on the needs and requirements for an effective and well-managed burial process?

I think South Africans especially the people of colour needs more than education on the burial process but on the steps to take before the actual death. The following needs to be taken into consideration:

  1. Financial planning and proper financial product e.g. funeral policy, life cover and death benefit with instant cash payout on death.
  2. More education should also focus on how to spend the “lump sum” cash payout during the bereavement process i.e. distinguish between a burial with dignity and respect or a lavish ceremony or show off funeral service.
  3. It’s also important to appoint a service provider who will be able to be one-stop-shop whereby the grieving partner is able to have enough time to think and plan properly whilst they know that they have a reliable service provider on their side.
  4. I think the word “Funeral Advisor or Funeral Planner” is an appropriate term to be used during this process. This should be an experience, professional person from the Funeral Service Provider who will be able to arrange and direct the funeral process on behalf of their client.

What would be the most important advice you would like to offer on preparedness for the death and burial of a loved one?

Firstly it is important that a will is done whilst time is permitting as this directs the surviving members of the family on how the deceased would have like to be buried.

Secondly, it is important that burial sites are identified and bought on time if families want to be buried in the same area. There is a shortage of burial space in South Africa and it is better to purchase now than later for a space at either private cemeteries or local public burial sites.

Identify the best funeral service provider in your area and also choose a package that will suit your needs or adjust the package to your satisfaction.

NOTE: It is best to bury either during the week or on Sunday as there are fewer funerals taking place at that time. The favorite Saturday 9 – 11 spot is not viable due to traffic at cemeteries hence midweek and Sunday offers the best times to say good bye to your loved ones. In most cases you own the cemetery for that period as there will either be your funeral only or max another funeral.

Private cemeteries do offer a venue (church and hall) where the service can be held there and also the food can be served in their hall after the burial process. This is the ideal way as everything is in one place and there is no traffic rushing back to the deceased families for lunch.

[A word of appreciation to Rachel Steed from FuneralCar and Mr Pat Zwane, Fleet and Assets Manager from B3 for the assistance received]

 

 

 

 

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