Sticking to core principles
The financial services industry has seen a changing of the guard with Peter Jennett becoming the CEO of Centriq and with Gareth Beaver taking over the reins at SHA. FAnews spoke with Beaver to find out more about his overall view of the industry and whether there will be any changes on the horizon for the company.
A robust and challenging industry
When looking at the overall state of the insurance industry, Beaver acknowledges that we are operating within a challenging industry. However, there are opportunities for companies that deliver a differentiated and compelling value proposition to clients whilst at the same time being focussed on operational efficiencies.
“The short term industry is operating within a very competitive space where there is a surplus of underwriting and reinsurance capacity looking to write up business, resulting in significant downward pressure on premium rates. In addition, the cost of claims is under significant upward pressure influenced by the rand weakness,” said Beaver.
He adds that the effect of this pressure is starting to reflect in reducing underwriting margins being notched up by many short term insurers in the first half of 2016 and so it is expected that there may be some movement towards possibly hardening rates in the second half of 2016.
Sticking to bottom line efficiency
Those who are familiar with SHA, or do business with the specialist insurer, are advised to expect some changes within the company.
“Whilst I intend to stick to the core principles and underwriting philosophies of the company, I plan to re-energise the people within SHA to ensure a company that grows revenue, offers exciting new opportunities to its staff whilst maintaining its profitability and return on capital for shareholders,” says Beaver.
“To achieve this we need to be introspective for a short while, getting feedback from both clients and brokers and using this feedback to change how and what we do. There is a lot of competition in this market. However, our Santam Limited balance sheet backing and the experience and quality of our own in-house claims team as well as preferred top law firm relationships works in our favour. Clients want a specialist insurer who has the ability to run with and manage complex claims while recognising there is still further room for improvement.”
Avenues for growth
Beaver points out that there is no need to reinvent the wheel as a good foundation has been established over the years. “What is needed is a focus on improving our relationships with our brokers, on whom we rely exclusively to advise their clients on the need for appropriate and relevant insurance cover and to manage expectations accordingly at the time of dealing with complex claims in order to grow revenues and ultimately profits.”
“We will achieve this through a mixture of growth from our existing South African market place as well as growing outside of South Africa. There are a growing number of opportunities across Africa and South East Asia which we can access via our affiliation with Sanlam Emerging Markets. Obviously these are developing markets and are not at the demand level that we would like yet. But as the market develops, we will grow with it,” says Beaver.
Unique skills
Coming from Centriq, Beaver feels that he has a fresh perspective to offer SHA and plans to be very active when it comes to the marketing of what SHA has to offer both clients and brokers.
Beaver says he employs a management style that fully empowers employees within the organisation, but ensuring that they remain accountable for delivering results.
“I also have a responsibility to ensure my team has the resources to execute on their growth targets and strategies. If we don’t provide these resources, how can I expect employees to achieve their plans and grow the business?” asks Beaver.
Pulling the strings
In addition to stepping up to his own responsibilities as the company’s CEO, he acknowledges the calibre of the existing executive management team who are well known in the industry as experts in their field.
Beaver cannot stress how important the role of the intermediary is to SHA products. “There will always be a need for intermediaries in the industry. In the world of online DIY purchasing and robo-advice, intermediaries are still much needed to educate clients on our product offering. They need to educate their clients on exclusions, extensions, incident reporting obligations and claims triggers so that they better understand the benefits in our product and also ensure expectation levels remain in line with the reality of the cover provided as it is not intended that our policy covers any and every type of business risk which gives rise to a financial loss. In order to achieve this, we will need to invest more time in educational and knowledge sharing sessions with our brokers and even insured clients,” concludes Beaver.
Editor’s Thoughts:
We live in a world driven by complexity. In this world, clients need clarity. This is why the role of an intermediary, and a company with strong leadership, cannot be understated. Please comment below, interact with us on Twitter at @fanews_online or email me your thoughts [email protected].
