COMPANY PROFILE
2013
Compass Insurance
Specialist insurance services
company report
Specialist insurance services Editorial: Lauren Grey Production: Chris Bolderstone
South Africa’s short-term insurance sector is under increasing pressure from economic, environmental and regulatory influences; IndustrySA speaks to Paul Carragher, Managing Director at Compass Insurance to find out how the business adapts to a constantly changing market.
Compass Insurance has established itself as one of South Africa’s most well received and unique short-term insurance companies; offering unrivalled customer services to clients throughout South Africa. Compass Insurance is a niche South African Short-Term Insurer, operating exclusively through Underwriting Management Agencies (UMAs). Compass Insurance focuses on providing innovative and relevant products and services to individuals and businesses with specialist insurance needs through its UMAs. “What makes Compass special,” explains Managing Director, Paul Carragher, “is that we offer the best platform in the market through which to underwrite specialist insurance solutions. This means we can offer the specialist products and services required to underwrite specialist risks.”
individuals and businesses. “We operate as a partnership,” says Carragher “we go into business with a UMA with a long term vision, and together we have the specialist skills and expertise that are able to underwrite specialist risks in the market.” The Compass business model is based on cooperation between connected spheres of expertise and Compass respects the specialist knowledge of each partner in the model, and facilitates the symbiotic relationship that is critical to the success of the business and all its partners. Compass’ unique business model not only enables it to offer niche insurance products and services to the market, but it allows the UMAs the freedom to run their own companies as creatively, innovatively and proactively as they wish, yet at the same time they can rely on Compass’ internal guidelines, control, support and expertise to make sure that a mutual business strategy is achieved.
SPECIALIST RISK SOLUTIONS Compass’ business model of operating exclusively through UMAs enables the company to offer a value added proposition to the market through customised, innovative and cost effective insurance solutions to
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CHALLENGES South Africa’s short-term insurance sector is under increasing pressure from economic, environmental and regulatory challenges.
Compass Insurance
Carragher says “Premium growth will be under pressure due to inflationary increases on the economy, and the continuing competitiveness in the insurance market. Consumers will have to contend with increased fuel prices, imminent urban tolls, electricity and other utility increases, which adversely impacts on their spending power.” “Regulation remains top of mind in the Insurance Industry, and the associated costs incurred by insurers in dealing with regulatory and reporting changes continues to increase.” Aside from the challenging regulatory landscape, South Africa’s short-term insurance industry also suffered ‘catastrophic losses’ last year. “Last year was a difficult year for the entire industry; it was a year of catastrophic losses, especially in South Africa where we had huge floods in January, hail storms in October/November and the St Francis fires in November. So unfortunately, from a results and industry point of view, it was a very hard and difficult year,” explains Carragher. “What this has done is put questions around underwriting specific risks, and making sure that the risks are underwritten properly, and also looking at
whether the pricing is correct in the market. So the market is potentially going to harden.” Other challenges that we are currently facing include amongst others, the weakening of the Rand, which will have a significant impact on the motor business, specifically on the cost of imported motor parts, labour related issues and the widening of the Trade Deficit will keep the Rand on the back foot, falling mining production, and Labour costs will continue to increase due to emerging pressures.
INDUSTRY RECOGNITION Whilst the insurance industry has become increasingly competitive in recent years, specifically the personal lines market, especially motor business and the new direct writers entering the market, the specialist insurance knowledge, skills and expertise offered by those operating in the insurance sector has ensured that Compass remain relevant and has also influenced other general insurers. “There has been a trend in the market where other insurers are adopting a UMA model,” Carragher explains “so we definitely have something that is making people consider whether this is a model that could work for them.”
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company report However, Compass remains South Africa’s only short-term insurer that exclusively operates through Underwriting Managers. In order to build and strengthen relationships year-on-year, Compass hold an annual awards ceremony for its partners. The event, ‘Morning of the Stars’ celebrates the best Underwriting Management Agencies within the Compass stable and enables Compass to not only measure the ongoing success of its UMA partners but to also recognise their success. Compass has also received recognition from within the industry for its unique business model; stealing two top awards three years running, “The Financial Intermediaries Association of Southern Africa have an annual awards function where they recognise the best underwriting agency in the market, and for the past three years, 2010, 2011 and 2012, we have had two of
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the top three underwriting agencies in the country” says Carragher.
“What makes Compass special is that we deal exclusively with Underwriting Management Agencies. This means we can offer the specialist services required to underwrite specialist risks”
FUTURE PLANS Whilst the insurance industry in South Africa is facing challenges, Compass Insurance continues to succeed and adapt to its changing market place. “We are always looking for new opportunities to grow our business” says Carragher.
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Paul Carragher
“Last year was a difficult year for the entire industry; it was a year of catastrophic losses, especially in South Africa…”
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+27 11 745 8333 www.compass.co.za
(0)1603 618 000 info@industrysa.com East Coast Promotions Ltd, Ferndale Business Centre, 1 Exeter Street. Norwich, Norfolk NR2 4QB