Specialist insurance lines require very specific skills on the side of the insurer and the broker. This is where relationship becomes ever more important. I spoke to Herman Scheepers, General Manager, risk and technology at Renasa, to explore further.
COVER: A lot of specialist insurance is done in house, or using specialists and also using UMA’s. Can you expand on Renasa’s approach to specialist insurance.
Herman: I think the first important thing is to understand that Renasa’s strategy is always to remain the brokers best friend. So we support the intermediated market fully in terms of distribution through brokers. But we also make extensive use of underwriting managers, or UMA’s, to manage the specialist products. Our business model is certainly one of partnership with both brokers and UMA’s. Further more, Renasa also supports distribution channels that combine best advice to policyholders with specialist knowledge and know how, to sustainably manage an insurance product. So I would therefore certainly say our preference is to deliver specialist products through UMAs, independent UMAs, which have dedicated specialists in managing their products.
We provide them, of course, with license, capital support and compliance support. As important, we try and partner with them to provide improved procurement wherever we can leverage off Renasa’s scale. We provide them with customization of systems, with regards to administration while, in line with our strategy, we always provide our UMAs with Renasa’s online claims system through which they can settle all claims. So really, if you think about it, it’s a combination of allowing freedom to the specialist underwriting manager to develop his products and to manage his own level of service to brokers and customers. But, at the same time, we get involved enough to ensure that we meet our combined responsibility in terms of compliance and treating our customers fairly.
I would say that Renasa really takes the partnership approach to the maximum. We like to build a long term relationship with our underwriting managers, I can very proudly say that we’ve got several underwriting managers that we have started with from policy number one, and we have seen that grow, over the last 10 or so years, to very successful and sustainable portfolios. We are proud to be associated with these underwriting managers, and we consider them to be part of the Renasa family.
COVER: In terms of the insurance model, and the environment developing into the future, do you see this approach in the near future staying the same?
Herman: Certainly. As I mentioned before, our strategies always do support the independent intermediated market. And the reason for this is that we believe that this is the only way that a policyholder can get truly independent and objective advice. If you think about specialist products, this of course goes hand in hand with advice, by the very nature of the products, they are typically more complex and generally not so well understood by general customers. So we actually see the increased importance of dedicated underwriting managers delivering this kind of product through the broker market. Secondly, we find ourselves in an ever changing world at the moment. I mean, there are emerging risks, which I think actually calls for more specialist innovative solutions.
You can consider, of course, the cyber risks that are emerging at the moment, given the way we work, all kinds of complexities surrounding business interruption cover just to name a couple of things. That I think is huge opportunity for the specialist market. A specialist and focused UMA has got the ability to deliver on innovation a lot more quickly. And if they find the right insurance company to partner with, I think they’ll have a great opportunity to respond to this need of the general insurance market.
COVER: As you mentioned, the specialist environment
is a complicated environment,. You mentioned cyber, for instance, and business interruption; it’s quite difficult and requires certain skills. How does Renasa assist with that? Do you have a way of also being part of that skills delivery?
Herman: Yes, and quite right, I think it’s extremely important that the knowledge transfer really takes place between the UMA and the Broker. This is, of course, done through training, where the underwriting manager and Renasa together really takes that on to make sure that we’ve always got appropriate information in the hands of the broker during the distribution process. And so we’ve got various training initiatives that we dovetail with the underwriting manager. Renasa however do get directly involved in terms of compliance aspects. So we are very close to the UMA and broker in making sure the disclosures and the necessary documentation that go with that are actually such that they ensure fair customer outcomes. Again, it goes back to allowing the distribution channel enough freedom to operate independently, with Renasa getting involved to the point of ensuring quality and correct advice going to customers.
COVER: What specialist lines do you currently provide to the brokers?
Herman: We’ve currently got quite a range of specialist products, in the personal lines space, we looking at products that range from pet insurance, to leisure and offroad vehicles, and medical gap cover. Then, if we look at the commercial lines, we’ve got quite an extensive engineering portfolio and we are also quite involvement in taxi and E hailing (Uber, Bolt and other services like that). We’ve got, professional indemnity insurance, a large heavy commercial vehicles portfolio and then we also play in the performance guarantee space. When it comes to products that expand both personal lines and commercial, we’ve got a wide array of value added products which we also deliver through UMA’s.
COVER: And any plans for further expansion on that?
Herman: Yes, indeed. We are always on the lookout for opportunities to participate in some new lines of business, specialist classes, especially ones that are suited to
the broker market, where advice is really important. Expanding into specialist classes is of course good for insurance company because it brings a better stability for the insurer in terms of his results through diversification. But more importantly, it actually broadens the array of products that the brokers have. Being the brokers best friend, that is certainly our objective, to make the broker more relevant. And we believe that the wider product range that the broker has to offer its clients, cements
the value proposition of the broker in the South African insurance market.
There are several specialist spaces in which Renasa is not yet active and we will certainly be open to expanding into these fields if we find the right partner where we can build a long term sustainable relationship.