Cindy Butler, Regional Manager, Coastal at Renasa
As the Regional Manager for Renasa in KZN and Coastal, I have witnessed firsthand the evolving landscape of risk management in the insurance industry, particularly in regions as vulnerable as KwaZulu-Natal.
The last five years have been a significant period of challenge and growth for us, as we’ve faced an unprecedented number of natural and man-made events that have forced us to reexamine how we manage risks.
At its core, risk management in insurance is about evaluating, mitigating, and ultimately protecting portfolios from exposure to various risks. In the KZN and Coastal regions, this becomes particularly critical as we must address not only the common insurance risks but also those unique to our geography. My focus, and that of our team, is on helping brokers keep their businesses healthy by ensuring the risks they take on are both manageable and aligned with our overall portfolio objectives.
KZN’s Recent History of Risk Events – KZN has faced a series of disruptive events in recent years that have severely impacted the region. Starting with the storms of 2019, we moved into the global pandemic in 2020, followed by social unrest and riots in 2021. In 2022, we were again hit by significant weather events, including a series of storms, and more recently, we have seen a number of fires. While these fires were smaller in scale, their frequency prompted us to take a closer look at our portfolio. These events have shown us the importance of staying agile and proactive in managing risks.
While much has changed, the primary risks we manage in property insurance have remained relatively consistent over time: fire, lightning, storms, wind, water, and hail. However, the unpredictability of weather patterns has become a growing concern. Recent phenomena like tornadoes and unexpected snowfall have added new dimensions to the risks we face. Beyond weather-related risks, we must also contend with challenges in service delivery, particularly when it comes to emergency response. In many parts of KZN, local fire brigades are stretched thin, sometimes needing to travel over an hour to respond to incidents. This delay increases the risk of larger, more destructive events.
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Addressing Environmental and Service Delivery Challenges – As insurers, we cannot control the weather or service delivery shortfalls, but we can prepare for them. For example, we’ve seen significant changes in water availability, with 30% of our rivers drying up in 2022. As we continue to face climate change-related phenomena like La Niña, it is crucial that we encourage behavior changes among our clients and work closely with our brokers to manage these evolving risks. Renasa’s strengthened relationship with reinsurers also allows us to take on larger portfolios, but with this ability comes the responsibility to do so carefully. Our goal is not to simply increase the volume of business but to ensure that we are writing quality, manageable risks.
Leveraging Technology for Better Risk Management – We live in an age where technology provides us with powerful tools to predict, assess, and mitigate risks. At Renasa, we use data analysis and are embarking on geo-mapping to understand the geographic and demographic risks our clients face. These tools help us to identify areas where we can grow and those where we need to be more cautious. Advances in weather prediction technology also allow us to forecast events with remarkable accuracy, giving us the ability to predict rain or lightning strikes down to the minute. However, while technology has revolutionized how we manage risks, it’s important to remember that it cannot replace human insight and experience.
Reviving Traditional Risk Assessment with “Eyes on the Ground” – One of the initiatives I am particularly proud of is our “Eyes on the Ground” approach, which we’ve implemented across Cape Town, Johannesburg, and KZN. This initiative takes us back to a more traditional form of risk assessment, where inspectors and/or portfolio managers physically inspect smaller risks in person. Larger risks have always been subject to surveys, but smaller, overlooked risks can often be the ones that cause issues. By having our team visit sites, inspect properties, and engage with clients directly, we ensure that the risks we take on are well understood and appropriately managed.
Risk management is not only about how we, as insurers, assess and mitigate risks; it’s also about educating our clients and brokers. Many risk-mitigating measures that seem obvious to us as insurers may not be as apparent to others. This year, we launched a consumer awareness campaign to highlight simple, yet crucial steps that businesses and property owners can take to reduce their risks. For example, ensuring staff know how to use firefighting equipment or properly storing solar power batteries can make a significant difference in preventing or minimizing damage.
Collaboration with brokers is central to everything we do at Renasa. We work closely with brokers, not only to identify risks but to manage them proactively. This collaboration often involves ongoing conversations and assessments, where we share our insights and work together to find the best solutions. The relationship between insurer and broker must be a partnership, where both sides contribute to protecting the client’s interests. I’m happy to say that this approach has been well received, as brokers understand that our goal is to help them maintain and grow their businesses by taking on quality risks.
Balancing Technology with Personal Relationships – Our business has been built on strong relationships with brokers, and while technology helps us manage risk more efficiently, the human element remains key. In KZN, where many insurers have reduced their appetite for new business due to the region’s challenges, we see an opportunity to step in and support brokers who might otherwise struggle to place coverage for their clients. By balancing data-driven insights with personal engagement, we ensure that our brokers have the tools and support they need to thrive, even in difficult environments.
KZN has seen its share of challenges, but through adaptability, collaboration, and innovation, we at Renasa are committed to making the region insurable again. By combining cutting-edge technology with a hands-on, human approach, we are not only managing today’s risks but also preparing for the risks of tomorrow.
Through our partnerships with brokers and dedication to our clients, we continue to navigate the complex landscape of coastal risk management with confidence.