Engineering and construction UMAs agree to merge

19 March 2012 Compass Insurance

Firedart Engineering Underwriting Managers and Construction Guarantee, two local underwriting management agencies (UMAs), have announced their intention to merge their businesses in an effort to provide clients with a single policy that will cover all eng

According to Mike Tandy, Managing Director at Firedart, the decision to merge the businesses was taken in order to create a leading specialist within the engineering and construction guarantee underwriting space. “There are already a number of synergies between the two companies and this merger will enable the combined group to drive down costs and offer contractors a one-stop-shop policy for all the cover required on building contracts.”

“It will also provide cross-selling opportunities, enabling both businesses to explain the two service offerings to their existing broker bases, thereby reaching a far wider pool of brokers.”

Mike says Firedart has been actively interested in offering construction guarantees for some time and the merger will provide the company with an already established brand and team of specialists under the leadership of Dave Agrella, the current MD of Construction Guarantee. “Firedart has been approached by a number of brokers and clients with regards to offering guarantees in the construction sector and this merger will enable us to offer a full solution to clients. In addition, by offering an insurance solution that meets the client’s every need, it provides a more streamlined process for clients with one point of contact for all of their insurance requirements.”

Valerie Hayter, Managing Director of Lireas, who recently acquired a stake in Firedart and was a founding shareholder of Construction Guarantee, says Lireas is very excited about this merger. “It makes good business sense and we believe that the combined force of both companies is exactly what the market is looking for.”

Both companies underwrite on behalf of Compass Insurance Company Limited (“Compass Insurance”) and so the merger does not trigger additional changes in this regard. The new entity, which will be known as Firedart Engineering & Construction Guarantee Underwriting Managers (Pty) Ltd, have moved into new offices in Meyersdal in Johannesburg.

Mike will be Managing Director of Firedart Engineering & Construction Guarantee Underwriting Managers, with current Firedart Director Ian van Loggerenberg and Construction Guarantee Managing Director, Dave Agrella, both becoming directors of the merged group.

Both Firedart and Construction Guarantee are very strong players in the underwriting sector, as proven with the recent awards they received at Compass Insurance’s annual Morning of the Stars event in November 2011, says Paul Carragher, Managing Director of Compass Insurance.

Construction Guarantee won the Compass Loss Ratio Award – for a UMA with the most improved loss ratio from 2009 to 2010 for the under R50m gross written premium (GWP) category. Firedart won the Compass Combined Ratio Award – for the UMA with the lowest combined ratio for the past 3 years (2008 – 2010) in the over R50m GWP category.

“We are confident that the merger will not only fill a gap in the underwriting market but enable the two companies to grow current business opportunities to give them a major competitive advantage,” concludes Carragher.

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