Building blocks for Brics - Hollard leverages five years' experience in China

Hollard, the third largest short-term insurance group in South Africa and the largest independent insurance group on the African continent, has consolidated its presence in China. After five years of operating a “Representative Office” in Beijing, on 6 September 2011, the company signed a formal Agreement of Cooperation with the People's Insurance Company of China (PICC), the largest non-life insurance company in mainland China.

“The role of the Representative Office is not to trade, but to represent the parent company and to build relationships,” says Frans Prinsloo, Hollard's Chief Development Officer: International.

“In addition to the Representative Office, Hollard also has a joint venture partnership with a Chinese retail cellphone company and China Pacific Insurance Company, to gain insight into the Chinese individual policy market. Hollard has incorporated a niched insurance broking company in Beijing to utilise its experience in China to roll out niched consumer insurance products.

“These relationships and the experience gained in the business environment in China over the last five-year period proved invaluable in concluding the Agreement with PICC. Because of the very strict hierarchy and protocol that are part and parcel of Chinese companies, the negotiations took 18 months to conclude.”

Hollard and PICC will now collaborate on the innovation of products and distribution channels, and develop further the possibilities of micro-insurance for the Chinese market. The two companies can now truly share their experiences in China and Africa on how to access the low-income market.

Because PICC has no insurance licence or representation in Africa and Hollard requires an insurance carrier in China, the Agreement is mutually beneficial. The insurance needs of Chinese companies operating in Africa can now be more ably served by PICC because of assistance provided by Hollard, which has a well-established network of offices and partners in Africa.

According to Ian Ross, Hollard's Chief Underwriting Officer and International Director, until now there has been very little benefit to local African insurance companies from the increasing number of Chinese companies operating in Africa.

“With South Africa now formally part of the circle of the five most important emerging countries, we have a tangible vision for creating a Brics risk pool, serving Brazil, Russia, India, China and South Africa. This Agreement of Cooperation is part of this initiative and a building block in the Brics vision.”