Crazy things to make it work

RISKSA Magazine - - Short -Term -

In 2010, SRM Aerospace was born, a spe­cial­ist avi­a­tion in­sur­ance bro­ker­age which fa­cil­i­tates the place­ment of avi­a­tion cover for gen­eral in­sur­ance bro­kers across the con­ti­nent. “The op­por­tu­nity was in pro­vid­ing the abil­ity for gen­eral bro­kers and in­sur­ers to place avi­a­tion in­sur­ance, where pre­vi­ously they might not have had the ex­per­tise. We fa­cil­i­tate the place­ment for them.” Start­ing the com­pany as a con­sul­tancy (SRM In­ter­na­tional) in Switzer­land on his own, Raath re­turned to South Africa and launched SRM Aerospace. The busi­ness has gone from strength to strength since then, with a net­work of part­ners ex­tend­ing across the con­ti­nent and sig­nif­i­cant pre­mium growth, reach­ing over half the size of their big­gest com­peti­tor on pre­mium in­come in just four years. “We’ve been very lucky. Last year alone we grew 70 per cent on what was a fairly rea­son­able base.” The team now con­sists of six based in the Jo­han­nes­burg of­fice and three based over­seas. “Roughly 75 per cent of our busi­ness is from out­side of South Africa. We do a lot of busi­ness in Botswana, Kenya, Namibia and Tan­za­nia and are now see­ing good growth in North and West Africa,” Raath ex­plains. Raath fore­sees op­por­tu­nity in de­vel­op­ing trust in whole­sale broking on the con­ti­nent – the heart of the SRM model. “There’s huge op­por­tu­nity in that be­cause we can deal with a few bro­kers and have ac­cess to many more clients than we would by go­ing di­rectly to clients. This model en­ables us to re­main small and ef­fi­cient but have ac­cess to a huge amount of pre­mium in­come,” he ex­plains. “The lo­cal bro­ker of­ten has a bet­ter re­la­tion­ship and knowl­edge of the client than we would be able to cre­ate in a few meet­ings. We can’t take a Tan­za­nian client out to din­ner and lunch ev­ery sin­gle week, whereas they can.” Nonethe­less, there’s no run­ning the busi­ness from a desk in Jo­han­nes­burg for this team. “We are in planes a lot. I travel ev­ery week – I’ll go to 3 dif­fer­ent coun­tries in a month, and things can change quickly day to day. I’ve started a day at 8am think­ing I wasn’t trav­el­ling, and by 11am ended up in Wind­hoek. On one oc­ca­sion, I waited for three days in Uganda to get to see one client for 20 min­utes.” “If you’re go­ing to take a big risk and start a busi­ness like this, you have to pull out all the stops and do some crazy things to make it work.” It seems this as­pect of the busi­ness is un­likely to change any­time soon. As a spe­cial­ist bro­ker, Raath says it is un­likely that SRM will ever need lo­cal of­fices in coun­tries. “As a busi­ness, a big chal­lenge for us is just the sheer size and di­ver­sity of the African con­ti­nent – each coun­try has a dif­fer­ent out­look and way of do­ing things, I can­not see how, as a niche provider we can bet­ter our net­work or man­age the sheer di­ver­sity. South Africans for in­stance don’t al­ways have a good name in some coun­tries. In other in­stances some mar­kets are very brand con­scious and like to deal with Lon­don bro­kers di­rectly due to past his­tory or cul­ture. Trust lev­els vary, so each one is dif­fer­ent and bal­anc­ing this is key to suc­cess on the con­ti­nent. The dif­fi­culty go­ing for­ward will be main­tain­ing the growth but still keep­ing the ser­vice lev­els and the in­ter­ac­tion with our clients the same. That would be my big­gest is­sue at the mo­ment, to try and main­tain the re­la­tion­ships and grow the busi­ness. African bro­kers and in­sur­ers don’t want to deal with five dif­fer­ent peo­ple, par­tic­u­larly in avi­a­tion. They want to be able to give you some­thing and you must ‘sort it out’. They don’t want to go to five dif­fer­ent spe­cial­ists. They want a so­lu­tion to all their avi­a­tion prob­lems and that’s what we have to pro­vide if we want to main­tain the re­la­tion­ship.”

A Swiss ex­pe­ri­ence

Raath be­gan his ca­reer in South Africa in a long-term in­sur­ance bro­ker­age, fo­cus­ing on pi­lot-spe­cific life in­sur­ance. He later bought out the bro­ker­age with a vi­sion to of­fer clients air­craft in­sur­ance, as well as life cover – en­abling more regular client en­gage­ment and a fuller ser­vice of­fer­ing. He later sold the busi­ness and moved to work in Switzer­land in 2006. Dur­ing his four years in Switzer­land, Raath worked for a large air­craft fleet man­age­ment com­pany. Gain­ing in­valu­able ex­pe­ri­ence and wide global con­nec­tions, he then spent a cou­ple of years con­sult­ing to ma­jor banks, han­dling re­pos­ses­sions and in­sur­ance of air­craft. He then re­turned to broking and it was here that he no­ticed the regular re­quests for avi­a­tion place­ment from other bro­kers – par­tic­u­larly African bro­kers and bro­kers from other high risk ar­eas of the world.

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