Responding to industry trends Delivering new commercial solutions

At their “Journey of Delivery” conferences hosted in various cities across South Africa, Momentum Short-term Insurance introduced new and exciting tailor-made commercial products, responding to identified industry trends and offering unique covers, benefi

The “Journey of Delivery” conferences recently hosted by Momentum Short-term Insurance (STI) offered advisors a unique insight into recent industry developments as Brand Pretorius, CEO: Momentum STI, discussed key issues in the short-term insurance landscape such as the regulatory exams and other legislative changes, underwriting and risk management trends, industry growth and profitability as well as the economic environment and its impact on the industry.

Risk management trends

Pretorius notes that there seems to be a general understanding that risk management on its own is not enough. “To ensure sustainability, risk management must be complemented by accurate risk pricing, in other words, individualised underwriting. This is reflected, for example, in the increased use of telematics devices in vehicle underwriting. Insurance companies are also placing a lot more emphasis on proactively managing risk by getting involved in initiatives such reducing insurance fraud or improving road safety.”

In March 2011 Momentum STI launched the Responsible Driving product, which utilises an advanced telematics device provided by Tracker Skytrax to measure driver behaviour. Clients who are willing to have their driving behaviour monitored are viewed as slightly better risks, and a small premium discount applies when selecting this cover option, with an ultimate envisaged saving of up to 20% of the premium for responsible drivers.

“While this product will not appeal to all clients, it does reflect the fast-growing trend towards individualised and behaviourally-based underwriting. We believe that this could be the future of vehicle underwriting,” says Pretorius.

Individualised approach

Extending this individualised underwriting approach into the commercial space - Momentum STI’s main strategic focus - Pieter Erasmus, Head: Marketing, Sales and Distribution, introduced various new tailor-made products, aimed at providing intermediaries with unique and innovative covers to address commercial risks in specific industries.

“The biggest growth over the last year was in our commercial lines business,” comments Erasmus. “Given the importance of advice in this field and the risk management trends that are gaining momentum, we are creating solutions that will give our brokers an edge in the commercial space.”

The tailor-made products, with their exciting linked bonus benefits, cover four industries.

For medical professionals, the new commercial cover features enhancements such as Machinery Breakdown and Professional Subscription Fees under Business Interruption, and Accidental Damage on Stock, Contents and Business Interruption.

The new Medical cover has been enhanced with a Theft peril under Business Interruption. In the Hospitality industry, cover for a Tourist Attraction Loss, Public Liability for the break-out of animals, as well as Hunting Liability for game farms have been added. Bilking cover – insurance against patrons or guests leaving without paying their bill - is another innovative enhancement.

The Food & Catering policy caters to the highly specific needs of this particular industry. It also includes Bilking Cover, and provides cover for royalties as well as Public Liability, with specific focus on food poisoning (defective products).

The Body Corporate policy covers numerous highly specific risks in the sectional title management field, including Trustees Liability cover, Water Heating cover and Loss of Rent.

Other product enhancements spanning all four policies include Machinery Breakdown, Accidental Damage and Theft on a First Loss Basis under the Content section, Public Liability as standalone cover, and towing usage allowed on vehicles.

Rate reductions

Rate reductions also play a prominent role in the new and updated product structure.

“We monitor the loss ratios, claim frequencies and underwriting margins continuously across all risk classes,” says Erasmus. “We will, in line with our commitment to provide value-for-money products, reduce rates where practically possible. We recently reduced rates on certain commercial risks, such as commercial vehicles, public liability and stock.”

He adds that Momentum STI’s staff is suitably accredited, and trained, on every aspect of their respective fields, whether that is for new or existing products. “They are capable of handling all underwriting requirements and claims related to the new products that we have recently launched, adding service excellence to the range of benefits brokers can enjoy, and ultimately pass on to their clients.”