Creating true value for customers
01 November 2013 | Magazine Archives FAnews & FAnuus | Features / Profiles | Christelle Fourie, MUA
The South African insurance industry is characterised by cost pressures where clients are looking at ways to decrease their spending on items which they regard as grudge purchases. And unfortunately insurance is being seen in this light, says Christelle Fourie, Managing Director of MUA.
Some companies are trying to be proactive and are taking steps in order to improve the offering they return to their clients. One such company is MUA Insurance Acceptances (MUA), who has announced a landmark partnership with Telesure Investment Holdings (Telesure) to underwrite on behalf of Auto & General Insurance. Through this partnership, MUA hopes to offer its clients real value for their money.
The importance of the change
After spending almost four years with Compass, MUA points out that the move was aligned to MUA’s future market ambitions.
If growth is one of these ambitions, then the benefits of the move are undeniable. Telesure is one of the largest insurance groups in South Africa, and is widely admired for never having made an underwriting loss in its history. The group owns and operates several of South Africa’s leading insurance brands, including Auto & General, 1st for Women Insurance, and long-term insurer 1Life, among others. Telesure is owned by Budget Holdings, which operates in the UK, South Africa, Australia, France, Turkey and the Netherlands.
Fourie says that the new partnership with Auto & General is mutually beneficial, with MUA standing to benefit from Auto & General’s highly advanced technological systems, economies of scale with regards to procurement and access to innovative underwriting techniques. Auto & General, on the other hand, gains access to a previously unexplored market segment.
Refining business processes
While this move comes as somewhat of a surprise to the industry, it came off the back of a well thought out process which involved a lot of investigations behind the advantages the move has to offer.
This decision was a year in the making. "MUA has been considering a new strategic partnership for the past year. We needed to get access to bulk buying power to manage our cost of repairs. Rather than go the route of rate increases, which we tried and quite frankly was traumatic, we decided to increase our capacity while decreasing our costs. The majority of South African insurers were considered and wanted to do business with MUA. However, there was a specific reason why we chose Telesure,” says Fourie.
"Bulk buying power creates economies of scale which allows companies to better manage their costs of repairs. By doing this, MUA would be able to pass these savings onto its clients which gives them a sense that they are more than just a number with the company," she concludes.
Another major motivating factor behind the move was Telesure’s performance in the market. "Getting access to Auto & General risk rating and cost management capabilities, which have long been the envy of the industry, presents a huge advantage to us at MUA.”
Impact on the broker
Fourie assures the market that, it will remain an underwriter, and that it is business as usual. "MUA will remain a broker-driven business. What we will be doing is extending our reach into the Auto & General broker distribution model. It is our aim to insure every one of the VIP clients of as many brokers trading in the South African insurance landscape,” says Fourie.
She also admits that they had varying reactions from the broker fraternity to the announcement, but said that the positive reactions far outweigh any negative ones.
"It is important to remember that, for MUA, it is business as usual. The manner in which we handle our underwriting, claims and accounting will remain exactly the same as before. What will change is our ability to innovate,” she maintains.
"I believe that brokers will see the benefit that the Telesure partnership will bring for themselves and their clients.”
