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Newly merged brokerage to lead the way in Gauteng

01 October 2014 CIB
From L / R, Greg Brits, Russell Sourgen and Digby Levenson.

From L / R, Greg Brits, Russell Sourgen and Digby Levenson.

Bert Levenson Insurance Brokers (Bert Levenson) and Jurgens Insurance Brokers (Jurgens) today announced their merger to become one of the leading insurance brokerages within Gauteng.

The merger is a strategic response to increasing competition in South Africa’s short term insurance market, which has seen brokerages going head-to-head to win business in both the personal lines (household and motor) and commercial insurance categories.

A competitive insurance market is good for consumers who benefit from lower premiums, but proves difficult for brokerages that find their profit margins being squeezed. Factor in the cost of complying with financial services regulation and smaller insurance brokerages have little choice but to consolidate their practices in order to offer cost effective solutions to their clients.

The merged business will benefit both from efficiencies of scale and a broader base of commercial and high net worth (HNW) individual clients. Bert Levenson focuses on medium to large commercial clients while Jurgens provides insurance solutions to both HNW individuals and corporates.

The newly merged brokerage boasts more than 94 years of insurance experience at management level. Digby Levenson and Russell Sourgen – directors at Bert Levenson – boast 44 years and 30 years’ experience respectively, while Greg Brits has more than 24 years’ experience. The business will be housed at Jurgens’ existing premises in Bedfordview.

“The Jurgens Group was established in 1989 and focused on restructuring clients’ risk portfolios so that they received the best value from their insurance product suppliers – something we will continue doing in the merged firm,” said Greg Brits, managing director and shareholder at Jurgens.

According to Russell Sourgen their brokerage prided itself on providing hands-on personal service to both its clients and the underwriters with whom it placed client’s risks. “Many of the clients who started with us all those years ago are still with us today – and we believe that new clients will show similar loyalty once they get a taste of our superior insurance solutions,” he said.

The merged brokerage will have binder or outsource agreements with all of the country’s major insurers enabling them to offer the widest possible range of insurance solutions to both new and existing consumers.

Clients of Bert Levenson and Jurgens will not be affected by the merger. Existing service level agreements from the current insurers will remain in place, as will the policy covers. Levenson, Sourgen and Brits will all be actively involved in the new business and will seamlessly manage existing client insurance portfolios through the merger.

“We believe that the merger will lead to improved service levels as well as exposure to additional markets and products which can only enhance our offering to our clients,” said Russell Sourgen. He added that there were many benefits that came with a wider footprint, including improved negotiating power.

His sentiment is borne out by Cyan Capital which is a shareholder in the new entity. “We are proud to be associated with the merger of these highly successful businesses said Matthew van den Heuvel of Cyan Capital. “We will work with both teams to ensure a smooth integration that will result in continued excellent service to customers and business partners."

Quick Polls

QUESTION

Is the commission procurement rule introduced via clause 5.14 of the Amended Financial Services Sector Code (AFSSC) an important piece of the transformation puzzle?

ANSWER

The clause’s implementation coincides with an increase in the minimum spend targets, which further complicates matters
Many FSPs still view the AFSSC as a matter of choice and consequence rather than compliance
Transformation represents a great opportunity for growth and penetration by brokers
Brokers are unlikely to find their commission business yanked away from them by insurers looking to influence procurement scorecards
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