Taking the co-insurance market by storm

If your retail, corporate, commercial, agricultural or marine client is in search of superior insurance solutions they need look no further than New National. The black-owned insurer has four decades of experience in the South African market and has built its brand on relationships, trust and commitment.

New National has grown from strength to strength since its March 1972 launch. As proof of its continued success the group achieved an impressive R876 million gross premium income for the 2011 calendar year and now employs more than 70 staff at its KwaZulu-Natal and Gauteng offices.

What motivated the company to seek out another underwriting partner? Hera Saligram provides some insight in his 2011 Chairman’s Report, where he notes: "The foundation of New National continues to be that of strong partnerships.” The insurer depends on its relationship-centric UMA / broker business model which is underpinned by strong strategic relations with reinsurance partners.

In order to grow consistently you have to nurture these relationships and ensure that interactions between policyholders, brokers, underwriting managers and reinsurers take place optimally. What better way to expand on this winning formula than to partner South Africa’s oldest black-owned insurer with South Africa’s only black empowered corporate UMA?

Transition Risk Solutions was founded in 2009 by experienced short-term insurance campaigners, Tony Rose and Winston van Zyl. Winston had spent 20 years in the reinsurance industry, holding senior positions at Munich re & Swiss re, while Tony started his career in the broking market at Forbes Reinsurance Broking Services, before tackling business development projects with Lion of Africa and Allianz.

Transition soon secured panel positions at many of its targeted accounts. Growth followed thanks to strong relationships with major national, international and independent brokers. "This focus enabled us to deliver credible solutions and a clear strategy to the market,” says Rose. "At the outset we adopted a strategy of writing follow lines on the larger Assets All Risk type policies, up to a maximum of 20% depending on risk segmentation and quality.”

Nowadays Transition specialises in corporate assets risks for large corporate clients (think Telkom, Eskom and MTN) with operations in South Africa and beyond. The UMA offers covers such as Material Damage, Business Interruption and Engineering: Machinery Breakdown as well as All Assets associated with their clients’ activities.

Assets All Risk covers in this space run to billions of rand. This requires co-insurers such as Transition to underwrite and price each and every risk prior to committing to a line. "You will not find too many local insurers prepared to write a R2 billion loss limit,” observes Rose.

"What typically happens is they give a quotation, issue a policy document and indicate to the broker and the market that they are prepared to write 50% of this risk. We are one of the companies that would play the role of a co-insurer in such cases.”

Rose is upbeat about the partnership with New National. "We can assist New National in offering a fully-integrated ‘cradle to grave’ solution to a wide range of industrial clients,” he says. "And the transaction affords us the opportunity to offer a full bouquet of insurance coverage through the New National-affiliated UMAs”.

The partnership is also a welcome step towards transformation in an industry where change happens slowly. "We share the common vision of meaningful transformation in the corporate insurance space,” explains Rose.

The exclusive underwriting partnership was implemented seamlessly from April 2012. Rose concludes: "Neither broker nor policyholder was affected by the move to New National. We expect our stakeholders to benefit from improved customer service and a deeper suite of products.”

"We will further develop our corporate and commercial book by leveraging the New National brand to offer our brokers and clients full coverage and peace of mind. We also see opportunities in new industry, such as mining, though our approach will be cautious.”