Integrated solutions for diverse clients
Its specialist underwriting capability has made Guardrisk a big player in the traditional insurance space
Guardrisk may have pioneered cell captives in SA, but pressure from clients to provide an integrated range of risk coverage has inevitably pulled it into the traditional insurance space.
Guardrisk Insurance contributed 61% of revenue in 2018, showing 27% growth in revenue over the previous year.
One of the strengths behind the Guardrisk growth story is its specialist underwriting capability.
Over the years specialist underwriters have moved away from large insurers, looking for other ways in which to apply their skills. Guardrisk has entered into a number of underwriting manager (UMA) cell captive arrangements with these specialist underwriters and now offers a range of niche insurance cover through these UMAS.
“This has always been one of our key strengths, and it means we sit with a very powerful niche underwriting capability, and are able to provide these highly spe- cialised skills to the market,” says Richard Eales, managing executive at Non-life and International.
The non-life business has several specialisations:
● Marine Underwriting Managers, acquired in 2017 and a market leader in marine insurance;
● C&G Guarantees and Engineering Risk Underwriters operations, also acquired in 2017, focusing on underwriting in the construction, engineering and guarantees sector;
● Corporate & Commercial, a mature part of the business and the dominant underwriter of municipal insurance business in SA;
● Mine rehabilitation; and
● Midtier commercial, offering what Walter Cronje, head of Guardrisk General Insurance, calls “providing midsized companies with Rolls-royce underwriting at MINI costs”.
While the large corporate market is overtraded and under-priced, the midmarket is a sweet spot, with generous margins that lends itself to the actuarial techniques and insurance management principles. That has been the bedrock of Guardrisk’s growth.
“We are able to provide this market with the kind of actuarial modelling that you would generally find only in the large corporate market, but we can do this at very low cost since our systems are largely automated,” says Cronje.
The purpose of the cell captive is to ring-fence certain identifiable risks and so reduce premium costs by ensuring proper risk management principles are applied by the insured and take away the volatility