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96 | The South African Insurance Industry Survey 2016
Many of these are typically in the motor and personal business lines. True
specialist UMAs who retain and apply subject matter expertise (i.e. marine,
aviation, specialist liability, engineering, complex property risks, etc.) do add
value as their product pricing is typically not influenced much by system and
procurement efficiency advantages because their insurance products are not
high volume-based transactional insurance deals.3
Growth
Despite the challenges documented above, business unusual concepts have
resulted in the 11% growth recorded in the gross written premium. Some of
the highlights that we have read about in the year under review include:
New partnerships
Leppard Underwriting and Abelard partnership4
Two of South Africa’s oldest UMAs, Leppard Underwriting and Abelard
Underwriting Agency, announced that they were joining forces. Leppard
Underwriting was a specialist underwriter in professional indemnity, general
and broadform liability. Abelard had also focussed on general and broadform
liability products (with particular expertise in the liability insurance for security
companies) as well as professional indemnity, directors and officers insurance
and event liability.
“Current market conditions, specifically the increased cost of regulatory
oversight, the need to invest in technology and the rise of the direct supply
chain, make it vital for UMAs to scale up in order to remain viable,” said Doug
Laburn, head of Lombard Partnerships who is the business support and licence
partner of Leppard Underwriting.”
MotoVantage5
Is a partnership between NewInvest, a FirstRand group company, and The
Hollard Insurance Company for the formation of a new value-added products
company, branded MotoVantage.
This new company (which includes 100% equity stake in Motorite and Smart) is
a clear indication of FirstRand and Hollard’s intent to play a significant role in the
value-added insurance industry.
3www.cover.co.za 4www.cover.co.za 5www.cover.co.za 6The gross written premiums for Absa include the premiums for Absa idirect and Absa Insurance Risk Management Services. Premiums for Telesure include premiums written by the other Telesure Group short-term underwriters being Dial
Direct, Budget and First for Women and Auto and General.
The use of technology
MiWay is creating positive customer experiences through the effective use
of their Miway App. From 12 October 2015, customers using the App to log
a motor vehicle accident claim, received a R1000 reduction in their applicable
excess. The MiWay App also allows users to request roadside assistance
to their exact location, instantly notify up to three contacts that they need
assistance, request a call back from MiWay Client Services and locate the
nearest inspection centres.
New products and players
Phishield
With South Africa posting the highest average rate for phishing activity globally
in 2014, with an overall average phishing rate in organisations of 1 in 568 users
for the year, it only made sense to tailor an insurance product to cover these
losses. Phishield is a brand new GENRIC Insurance UMA that brings a unique
cyber fraud insurance to the South African market. This insurance includes, but
is not limited to phishing fraud.
MyWater Insured
Unexpected water loss (for instance due to an unknown pipe leak) has a
negative impact on both the consumer and the council that supplies it and these
losses can now be insured.
MyWater Insured, is underwritten by Hollard through LSG Insurance Services.
Innovation in home warranty
Hollard Home Warranty™ offers protection against a list of defects that may
surface in a property in the first two years after a buyer takes ownership. This
product is aimed at giving buyers and sellers peace of mind. The product covers
faulty or defective design, structure or workmanship for a number of the key
areas of the home, including the roof, walls, foundations, tiling and paving.
Faulty electrical, drainage, plumbing and irrigation systems, as well as water
waste management issues, will also be covered.
Market share
The top 10
The charts below reflect the gross written premiums (GWP)6 of the ten largest
short-term insurance companies.