Zurich acquires bed and breakfast insurance company

JSE-listed Zurich Insurance Company SA said yesterday it had bought 100% of BnB Sure, for an undisclosed amount, in a deal that will enable the insurer to offer niche insurance to bed and breakfast businesses.

BnB Sure chairman Dave Jack said the company offered bed and breakfast businesses and guesthouses insurance that covered loss of revenue due to damages to the property, and insurance for injuries that affected guests staying at the guesthouse.

He said BnB Insure was the only underwriter manager with a 100% focus on bed and breakfasts. “What happens if there is a huge storm that takes out two or three rooms that you can’t use for a month? With BnB Sure the owner of the guesthouse can turn to the policy to sort out the structural challenge,” Mr Jack said.

“We will repay the income that the owner would have lost due to damages.”

Traditional insurers covering personal lines often refuted insurance claims that arose from commercial activities.

The deal is effective from January 1 and subject to approval by the regulators, which includes the Financial Services Board.

“At Zurich we have aspirations to position ourselves in the hospitality industry,” Zurich Insurance Company CEO Edwyn O’Neill said yesterday.

Mr O’Neill said BnB Sure had about 4,000 policyholders and Zurich would use its broker network to sell the BnB Sure offering. It offered bed and breakfasts and guesthouses insurance solutions that were not adequately covered by the traditional shortterm insurers.

“We are leveraging our scale and capability network to distribute this product through our existing infrastructure,” Mr O’Neill said.

He added that Zurich had about 65 staff servicing brokers.

“We are looking for a longterm, sustainable growth opportunity in hospitality. This is all based on the growth of tourism in the country,” Mr O’Neill said.

Last year, tourists to SA grew 10% to close to 9.2-million, compared to 8.3-million in 2011.

“As far as the bed and breakfast industry is concerned it’s estimated there are about 30,000 bed and breakfast and guesthouse establishments in SA,” Mr Jack said. “It’s also estimated that by 2016 that number would have grown by about 5%.”

Mr Jack said BnB Sure did not have a specific target market.

It insures bed and breakfasts and guesthouses from Soweto to Camps Bay. “It does not matter where the bed and breakfast is. They have similar risks that they face every day,” Mr Jack said.

Zurich shares ended flat at R270 yesterday.