RGA South Africa has grown tremendously from a start-up company in 1999 to an established player in the South African reinsurance market, writing over R450 million premium income in 2006. FAnews spoke to MD Conrad Backeberg to find out how they have attained this success.
RGA is an international reinsurance company writing life insurance business only. "We believe RGA's focus on life reinsurance and related risk benefits sets us apart from our competitors," says Conrad. "This specialised focus is an advantage as our resources are not distracted by the legislative or financial fortunes of other lines of business. This enables us to develop a deeper understanding of the requirements of our clients.
"RGA makes regular and constructive use of the knowledge and expertise of RGA associates worldwide to ensure that international trends and information are shared amongst the heads of all functional and technical areas including pricing, underwriting, claims, product development and administration," explains Conrad. "Co-ordinated from our Toronto office, RGA can tap the market trends from any of the 45 countries in which we participate.
Bankassurance
"RGA's bancassurance initiative is one such example where we have combined our international expertise and local knowledge to establish a first in this market in terms of our bancassurance surveys.
"The success of our first two bancassurance surveys surpassed our expectations ! The interest is wide and past surveys of a similar nature have been scarce. We plan to repeat the in-depth 'Bridging the Divide' survey on a bi-annual basis, with a simpler survey every other year.
"One of the major findings from our last survey has been the apparent lack of bancassurance discussion forums and lobbying groups. We are optimistic that RGA's involvement in developing this could be beneficial to the industry and that our positioning as the bancassurer's reinsurer of choice in this segment will reap rewards.
Impact on brokers
"Bancassurance is an exciting distribution model and RGA will continue to be at the forefront of investigating and developing this with our clients," says Conrad. "It presents numerous challenges for traditional broker-intermediated markets, but also opportunities for these same intermediaries. Product becomes slightly less important and process becomes the driver of success."
South African challenges
The South African reinsurance market is very competitive with a large number of players operating in a relatively small market, explains Conrad. "We make use of our flexibility and creativity to develop novel and efficient solutions to meet and exceed our clients' needs.
"Our biggest challenge initially was coping with the very high levels of growth and subsequently adapting the company culture from that of a 'start-up' to an established company with the processes required to manage a sizeable existing business while continuing to aggressively grow the business."
Regulatory environment
"As a company reinsuring protection business, the most recent regulatory changes affecting the insurance industry do not have a direct effect on our business," says Conrad. "However, indirect implications do affect us as we believe such changes, along with many others, e.g. the introduction of FAIS, the National Credit Act, CAT standards and demarcation between Medical Schemes Act and Insurance acts will continue to change the landscape within which we operate. As a result, we monitor and anticipate changes in distribution models such as the convergence of financial services, along with the industry focus on breaking into the non-insured markets."
Successes achieved
"RGA's rapid initial growth which far surpassed the original business plan targets set was a major success," elaborates Conrad. "This was achieved as a result of our excellent underwriting service and expertise and growth of our individual automatic business. RGA redefined the standard in 1999 and our underwriters currently exceed our target of underwriting 80% of all cases within six hours."
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