Marsh

COMPANY PROFILE

2014

Marsh

Risk Consulting

t: +27 (0)11 060 7100 | http://africa.marsh.com/CountrySites/SouthAfrica

company profile

Effective risk management = effective business management Editorial: Roland Douglas Production: Ajuanne Payne Managing the risks faced by your company; now there’s a task that can get complicated and potentially expensive. But if you have the correct advice and service from seasoned industry leaders, you will undoubtedly reap the rewards. Marsh Risk Consulting MD, Volker von Widdern tells IndustrySA more about the benefits of effective risk management.

Risk: The potential of losing something of value, often the result of interaction with uncertainty. Risk is something that all businesses flirt with and something that, in some cases, needs to be mitigated.

So, how do you go about this? Everyone knows that to alleviate risk you buy insurance and insurance for business is one of the world’s biggest industries. It involves sharing your risk with an insurer at a cost.

Years ago, this was a simple idea; you pay a premium and the insurer pays if you receive a loss; and the same remains true today but the techniques used by the insurance industry to analyse and reduce the risk have become almost like a science with specialists exploring every aspect of business with a fine-tooth comb.

In South and Southern Africa, the market is no different to the rest of the world – there are many risks to deal with so who can you turn to for the highest quality service surrounding risk? Many international risk advisors / insurance brokers and insurance companies now have homes in South Africa so there is a raft of options to choose from but if you want the best then you cannot overlook Marsh.

Marsh, a global leader in insurance broking and risk management, is a wholly owned subsidiary of Marsh and McLennan Companies and in Africa the company

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is headquartered in South Africa with direct Branch representation in Namibia, Botswana, Zambia, Malawi, Zimbabwe, Uganda and Nigeria.

Importantly, in South Africa Marsh has a risk consultancy division – Marsh Risk Consulting (MRC) and in 2012, this division merged with Alexander Forbes Risk Services creating one of the largest and most experienced dedicated risk consulting companies on the continent.

The risk consultancy side of the insurance industry is concerned with helping companies to better identify, understand and manage the risks they face.

One man well versed to talk all things risk is Volker von Widdern, Managing Director of MRC SA. The industry veteran recently told IndustrySA more about what risk consultation actually involves.

“The core of our business is in two themes; qualitative or hazard/operational on one side and financial and quantitative issues on the other. What are the kinds of things that can burn, break, injure people, poison the environment etc. those come under hazard/operational.

“If you look through a risk lifecycle and you’re looking at a business for which you may buy one year of insurance, we would start the assessment of the business by doing a risk survey or property survey. This involves assessing every aspect of the business from a risk point of view – say it’s a factory; what are the throughputs, what plant is

Marsh Risk Consulting

on site, what consumables are on site, what are the fire loadings etc.

“Then you would write up all of your findings in a substantial report, around 100 pages, and underwriters will use that report to evaluate and price the risk.

“Within the report, you need to asses critical elements.

For example, if you were reviewing a printing factory, the fire loading colloquially would be enormous because of the paper, the glue and packaging materials. You would look out for high levels of protection and prevention – things like fire sensors and air extraction etc. Practically speaking, we know where the key risk areas are.

“A big part of the risk understanding is not only the fire, burn, break; it’s the understanding of business interruption and the consequences of the particular kind of loss,” explains von Widdern.

The first port-of-call is to understand the risk as deeply as is possible and being able to recommend risk prevention and reduction strategies and this is where the report developed by MRC becomes important.

“The critical outputs of the survey report are what we call the estimated maximum loss (EML) and the maximum possible loss (MPL) scenarios,” says von Widdern. “EML is a large loss scenario but where protective systems work - so the fire prevention works, or you can minimise the impact of plant failure etc. The MPL is where your

prevention systems don’t work - maybe a plane hits your roof and wipes out your sprinkler system for example.

“The first order of business is to understand the risk and understand the likely insurability and size of a possible claim on the risk, write the report, and hand it in. The report then goes to our insurance market brokers.

“After that we raise many recommendations for the clients on how we can assist them to improve the risk – things always need attention and this leads to the next level of consulting which is risk management or risk programme delivery. Here, we go right from the bottom and help develop standards, help with training, help with implementation, we have a very strong audit programme, we do benchmarking and validations and all the like and we effectively become the rent-a-risk manager providing the right resource as required across the whole qualitative operational risk area.”

COMMITTED Marsh has by far the largest risk consultancy team in the country and von Widdern says that this shows the company’s expertise and commitment to the industry.

“Our team has around 110 people working on this and the next biggest team for any other broker has fewer than ten and this demonstrates the commitment we have to this side of the work,” he says.

jun 14 PAGE 3

company profile

WHEN YOU ARE PASSIONATE ABOUT SOMETHING, YOU PROTECT IT IN THE BEST WAY. ZURICH INSURANCE. FOR THOSE WHO TRULY LOVE THEIR BUSINESS. Speak to your broker or visit www.zurich.co.za

2014 Zurich Insurance Company South Africa Ltd. Authorised Financial Services Provider no. 17703.

PAGE 4 jun 14

Marsh Risk Consulting

“Our expertise covers both themes: The qualitative, the hazard right through to the strategic risk, and the quantitative, where you start with claims experience and aggregate that all up into a structure where you recommend to the client what financial model they should use to best capture and retain their premiums to minimise the cost of risk.”

Following the assessment of all of the qualitative aspects involved, MRC then has to make quantitative calculations and review all of the financial impacts of potential risks.

This covers everything from business interruption costs to supply chain disruption costs.

“Throughout the year, we hope that the client doesn’t have a claim but what if they do? We are now talking about how we can help the client with that claim. We have a forensic accounting team that is expert in dealing with claims. Our team drastically improves the data that goes to the insurer for the claim and reduces the effort for the client. This shortens the time of the claims and accelerates confidence and cash flow of the claim and this makes clients happy,” von Widdern explains.

“When we have gone through the physical assessment of the risk, we have to look at measuring and pricing the risk.

“What has come to the fore in the strategic risk area or corporate risk area is the quantification of risks, risk financing and insurance optimisation. What you’re trying to show here is that there’s no point to a large corporate

insuring every last dollar of its risk because it’s too expensive and insurers are not there to reimburse petty cash. Insurers are there to look after you when you really need it; several hundreds of thousands upwards, relative to the size of the company.

“You have to understand where to pitch the risk transfer layer. We have an actuarial and analytical team which does that.

“We estimate the maximum loss for the business, we look at claims for the last five years, we work out an estimate for the average cost of claims for a year and we note the company’s profits and so on and so forth.

Through this process we recommend the excess or deductible and we do this from an analytical point of view as we know it’s important for clients to understand the efficiency of pitching the deductible at the right number.

So, the quantitative side of risk becomes a very important part of our lives,” he says.

SUPPLY CHAIN RISK One of the services making MRC unique in its offering is supply chain risk assessment – such an important part of modern insurance offering but so often neglected.

Von Widdern says that MRC is the only company to offer supply chain assistance and this separates the organisation from the chasing pack.

“In the field of supply chain risk assessment, there is

jun 14 PAGE 5

company profile difficulty in achieving adequate insurance coverage and our unique analysis substantially improves the coverage terms for our clients.

“We are the only risk consultants in South Africa’s insurance industry who do supply chain risk assessment.

“It’s unlikely that you can get a risk solution from anyone else other than Marsh where we will motivate a more pragmatic risk orientated outcome, in partnership with the insurers,” he says.

But what does supply chain risk assessment actually involve? Von Widdern defines: “It’s any disruption to the supply chain where the underlying assets or business

PAGE 6 jun 14

interruption cover for the company’s own assets is not the primary risk exposure consideration.”

Consider the 2011 ‘Bangkok floods’ as an example.

Many factories that make hard disk drives were completely flooded and left inaccessible and unusable.

Instantly, industry analysts began to predict global shortages of hard disk drives and the price quickly doubled. One company was reportedly set back between US$225–$275 million. Some reports suggested that the insurance industry responded by raising rates in some areas between 50 and 200% or by outright not accepting new clients in Asia.

Palabora Mining Company NON-STANDARD LIFE INSURANCE

RISK FINANCE

AllLife

Centriq

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CAR HIRE INSURANCE BrokerserV

Manwood

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HCV

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Blue Diamond

AVIATION

MARINE

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Azriel Aero Aviation

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Xelus, Total Risk Administrators

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Ad Ultimum, IUM, Paladin, Paradigm

WHY LOOK ANYWHERE ELSE? We’re all different. We think, work and live differently. At Centriq, we see insurance in the same way – differently. It’s this way of looking at you and your clients that makes us a partner you can trust and turn to, whatever your clients’ insurance needs, from assets to liabilities to people. Over the years, we’ve built relationships with leading UMA business partners in our industry that position us to offer each insurance broker and their clients unique solutions provided by dedicated and competent people – that’s the Centriq difference.

jun 14 PAGE 7

company profile

Arch Underwriting Managers at Lloyds (SA) wish Marsh Africa every success in the future Arch Underwriting Managers at Lloyd’s (South Africa) (Pty) Ltd is one of Lloyd’s service companies offering direct local access to Lloyd’s security via Arch Syndicate 2012.

We are a wholly owned subsidiary of Arch Underwriting at Lloyd’s Ltd, the London-based managers of Syndicate 2012. Our experienced team in Johannesburg is available to assist clients with flexible solutions to meet their specific needs. In particular, we seek partnerships in the facultative, wholesale, agency and retail markets.

Address: The Campus, Augusta Building, 57 Sloane Street, Bryanston Tel: 011 575-1041 | Fax: 011 576-1041 | FSP No: 43830

“You buy your computer from Dell or Lenovo or whoever but the hard drive comes from elsewhere.

The hard drive supplier has nothing to do with you.

So when the computers don’t arrive because the hard drives were late, no one realises that the supply chain insurance is deficient,” says von Widdern.

And don’t think that you are immune to supply chain issues – these can affect any company, small, medium or large. A recent study by the Business Continuity Institute has uncovered deep-rooted sources of supply chain failure. Respondents from various industries in 62 countries revealed that 85% of organisations reported at least one supply chain disruption over the last 12 months, and 50% of companies had more than one disruption.

Fortunately, MRC’s global Supply Chain Risk Management Practice (a specialisation within the company’s Strategic Risk Practice) provides unique, proprietary solutions that can help organisations ensure that the right plans, processes, and procedures are in place to remain competitive and overcome adverse events, and as the sole provider of this service in South Africa, the company is undoubtedly the first port-of-call when it comes to managing supply chain risk.

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HOW CAN MRC HELP? While offering a fantastic portfolio of services, one of the challenges facing MRC is demonstrating tangible results after all, even with all the reports, numbers, figures and policies in the world, a client needs to see value at the end of the process.

“In the food industry, we had a situation where a client had an unfortunate loss. When this happens, insurers become nervous and can sometimes impose strenuous new conditions on an insurance policy such as increasing the excess.

“What we did was to review the property risk surveys and implement a strategy which helped the client with an immediate plan that would protect the structural assets across all sites quickly and effectively.

“Because of this, the very high deductibles that were applied were retracted immediately and returned to the prior lower levels as soon as the risk management programmes commenced.

“Our input helped to improve the relationship between the client and the insurer enormously and this allowed the technical improvements to be deployed and risk exposures were improved significantly in the following year,” explains von Widdern.

So there is clearly a benefit to be had from high-quality

Marsh Risk Consulting risk management processes and it’s not just heavy-industry businesses that now know this.

“We are busy in the mining and financial services sectors because of the scale of those industries,” says von Widdern.

“We have a raft of clients in the middle market sector which are mostly in the manufacturing industry; it could be motor, hospitality, light industry, distribution, food, retail – we have many of these types of clients who are actively engaged in risk finance.”

But although this sounds attractive, where do you go and who do you speak to for this kind of service? Fortunately, it’s not just a case of endless online form filling. MRC’s team is large and has a plethora of skills in a vast range of areas.

“We need technical engineering people to understand how mechanical things work and understand when they break down how long they will be down for,” explains von Widdern.

“Then we need people on a fire, health and safety standard side. We recruit people and develop them. Our development comes from the survey routines we have established over many years; the audit procedures, the technical standards and benchmarking, and people learn these and learn what best practice is.

“Then we have chartered accountants working for us.

They are offering the highest level of insurance consulting

to the captive insurance companies that we service here.

These are people who may have been junior accountants through the chartered accountant training routes at auditing firms and who have looked for jobs in commerce.

We try and recruit them and demonstrate that there are good opportunities for career growth as both accountants and consultants in an area of specialisation like insurance.

“The same happens with asset valuations. We would recruit an asset valuer and they would like working in a large organisation where the client base is highly diverse and they can gain diverse experience,” he says.

Clearly, insurance is a ‘people’ business. People are the most important factor and through its people MRC is taking strides towards its ambitious long-term goals.

“We want to be the leading risk advisor, reducing the cost of risk both qualitatively and quantitatively in respect of cash flow and exposure. What that means is that by engaging with clients we want it to be recognised that we add value by reducing risks and that improves business performance.

“We think that by demonstrating to companies that you can use risk management as a strong lever towards operational improvement, it will become less of a grudge purchase and more of a gain sharing, success building process,” says von Widdern.

Inniu Underwriting are proud to be associated with Marsh SA.

“It’s not about the pieces, but how they work together.”

Inniu Underwriting are Insurance Specialists in Large Corporate, Mining and Industrial Risks.

Contact us on 011 476-4420 or at www.inniu.co.za to experience our excellent service and delivery.

Authorised Financial Service Provider FSP No 34049

jun 14 PAGE 9

The Brainchild of Gary Corke and Dave Manuel, Emerald was started in 1999 with the idea of specialising in corporate property underwriting. From humble beginnings with a premium income of R30 million in its first year, the company reached over R1.1 billion worth of gross written premium at the end of 2013. From the 1st January 2010, the growth of the company reached an exponential point with the acquisition by Santam of the entire share capital of Emerald.

With a combination of Dave looking to retire, Super Group (one of the shareholders at the time) looking to exit from non-core businesses, and the desire and need within Emerald to change, Santam entered the picture. Santam was looking for a solution to their corporate property business, which resulted in bringing the entire corporate property portfolio of Santam into Emerald, who now does underwriting on behalf of Santam,” explains CEO, Bernard Ray. As a result of this merger, both companies underwent a restructure transferring both the business unit and the people from Santam that worked specifically on corporate property accounts to Emerald. “Obviously there was a need for rationalization and a restructure as the two businesses had effectively been in competition in the corporate property space” Ray explains.

The combined portfolios from each company provided access into a potentially greater market share, on Emerald’s terms. Initially the goal was to ensure the profitability of the combined portfolios, but the business nevertheless continued to grow.

As a fully intermediated company, all of the company’s business comes through intermediaries. Marsh, a strategic partner to Emerald, is one of the major intermediary companies providing business to Emerald, which then provides the insurance product for the policyholder.

“Marsh has a strong relationship with its clients and a large part of that relationship relates to assisting clients in terms of its risk management. The risk, which is then passed over to Emerald in terms of underwriting is better, and we understand the risks which creates less exposure, and thus allows us to give the client a better product designed for their needs” explains Ray. The synergistic relationship between Marsh and Emerald helps to build relationships between the client and its intermediary and between the intermediary and the underwriter, therefore creating better knowledge and ultimately, an improved risk.

Looking to the future, Emerald wants to continue as the preferred provider of corporate property insurance products to both South African, and now a wider geographical market as far as South East Asia. “The goal is to continue our positive growth in a manner that provides a profitable return to our shareholders” says Ray. Emerald will continue to set its own strategic goals in association with Santam ensuring that these goals remain aligned with its shareholder. Geographical diversification into emerging markets and managing the risk pool efficiently is just one of the strategies undertaken by Emerald.

Emerald places a heavy focus on its CSR campaigns and considers this side of business as an imperative.

“Our approach is definitely one of customer centricity, but in order to fully understand the needs of our customers we have to look wider at the community, the country and probably even the world we conduct business in.” Ray explains.

The Emerald Experience promises to “encompass the greater needs of the community and the environment”, which together with expansion into Asia and a continued and valuable relationship with Marsh, looks set to continue for many more years to come.

Palabora Mining Company

Shaping unique

solutions that Shine

Emerald Risk Transfer is currently

For more information on how Emerald

the largest Corporate Property and

can assist your Corporate clients, visit our

affiliated Engineering Underwriter

website or call us.

in South Africa, and underwrites

t +27 11 658 8200 W www.emeraldsa.co.za E info@emeraldsa.co.za

business

throughout

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Continent.

The solution orientated approach of the Emerald team to create sustainable, quality products is part of their culture.

Find us on Facebook www.facebook.com/emeraldrisktransfer

This flexible approach, coupled with the

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allows Emerald to be truly innovative.

The aim of the company is not to be the cheapest by cutting corners, but rather to be the best by offering expertise and skill.

Emerald writes business into the insurance licence of Santam Limited. Santam has a Standard & Poors rating of A- with a stable outlook.

Emerald Risk Transfer (Pty) Ltd (Reg. No. 1998/025512/07) is an authorised financial services provider (FSP No. 13893). Emerald is a wholly owned subsidiary of Santam Limited.

jun 14 PAGE 11

company profile Envirosure Underwriting Managers is a niche Underwriting Agency • Specialising in insuring transporters against hazardous spills • Insuring garages or commercial sites with underground or above ground tanks for gradual pollution Our additional value added products are: • Excess Solution – excess is bought down to nil in RSA or R50,000 cross border • Side Tank Cover – an indemnity of R80,000 or R150,000 is on offer • Premises Risk – Insuring the transporters premises for spill incidents

Your environmental hazard insurance solution

Envirosure has a 24 hour toll free call centre called Hazcall24, with qualified operators who will immediately mobilise our preferred response company, Spill Tech, to the incident scene.

Spill Tech is the leading oil and chemical spill response company in Southern Africa with a national footprint.

Spill Tech is a SASOL approved emergency response service provider.

Our insurer is Guardrisk insurance company and our Re-Insurer is Hannover-Re. Envirosure is an Authorised Financial Service Provider – FSP: 38594

Contact: Sjanine Tanner sjanine@envirosure.co.za 031 2054918 New National Assurance Company Limited (Principle Insurer)

But on the journey towards becoming the ‘leading risk advisor’ is not straight forward. As any business person will know, especially those in the insurance industry, sometimes things that are out of your control can swoop in and spoil your plans.

“We think that by demonstrating to companies that you can use risk management as a strong lever towards operational improvement, it will become less of a grudge purchase and more of a gain sharing, success building process” In the case of MRC in South Africa, the global economic slowdown of 2008 was one thing that had an impact on the growth of the business.

“We didn’t continue growing at our normal 15-20% each year. It was very evident that markets had shrunk, the availability of credit had shrunk and companies were very careful about where they spent money.

“We had a few knocks in that period but on the other side, the retail sector and the property sector was growing nicely in South Africa. The influence of global risks and the shock to the financial system certainly came through to South Africa.”

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But even though this was a difficult time, MRC managed to come through relatively unscathed with highs in one market sector making up for lows in the next.

One of the side-effects of the on-going success of the company has been the movement of business to a new office, a move which took place in October last year.

“When Marsh and Alexander Forbes completed the merger transaction, it was essential that we were located together in single buildings where multiple offices existed, to maximise the payoff of the merger. In August 2012, we moved into an office that is next to our current site and in October 2013, we moved into our current head office premises.

“It’s an excellent, smart new building with brilliant client presentation facilities and a beautiful view. It’s been very good to bring people together; it’s organised and well structured. All of our colleagues are accessible in this building by going up or down a few flights of stairs,” says von Widdern.

Now in a top-of-the-range new complex which contains a team with almost unrivalled industry expertise, the future looks bright for MRC and von Widdern suggests that even with the ever-increasing amount of competition in the industry, his team are comfortable in their position.

“We have certain competencies but we haven’t locked

Marsh Risk Consulting up the market. There are other service providers for every one of the services we offer. We are under constant pressure to justify a premium price. Market entrants are constantly coming in so we have to try and be nimble as well as being corporately well aligned.

“There is a lot of competition but it keeps us alert and that is fine.”

This confidence is not unfounded. The Managing Director has had a long and illustrious career in the industry and as you speak to him about the various achievements and accolades he has picked up over the years, you get the sense that there is nothing going on in the industry that he is not in-tune with.

PASSIONATE LEADERSHIP “I’ve been in financial services, in one form or another either asset management or insurance and risk, for most of my career.

“I started in the asset finance industry but even then we had short-term insurance broking company as a subsidiary and we capitalised on an opportunity where we could change the model for premium financing. There I saw the real benefits for integrating operational systems with client transactions data and we managed to significantly turn around a premium financing business.

The business we started off then remains South Africa’s most successful premium financing company, IoM” he says.

From there, he remained in the asset financing industry and eventually moved to Guardrisk as one of its earliest employees. Guardrisk, the country’s first cell-captive insurer, pioneered the concept of cell captives on an international basis.

“A cell captive is a specially approved insurance licence where a corporate is entitled to rent or to operate a branch of that licence in the name of the insurer. It’s beneficial as you can potentially access a licence to write two kinds of insurance. The license means that you can issue an insurance policy from Guardrisk to cover yourself as the corporate and secondly you can issue insurance policies to your customers.

“This is very valuable because if you have a reason to look after your customers or add insurance as a product for your customers, you will have the licence that supports the product. This is the correct and regulated way to do things. Instead of going to a big insurer and asking them to write a specific product for you, the cell captive industry was born to allow companies to issue tailor made insurance products to either customers or to themselves, but in a regulated and capital governanced environment.

TRANSITION RISK SOLUTIONS PTY LTD (Underwriting Managers) FSP No : 40534

Transition Risk Solutions was founded in 2009 by experienced short term insurance campaigners Winston van Zyl and Tony Rose. Winston and Tony combined have spent more than 50 years in the reinsurance, insurance, retail broking industry, holding senior positions at the various corporation’s that they have worked for.

Transition has secured panel positions at many of its targeted accounts. Growth followed strong relationships with major national, international and independent brokers of which Marsh is one of their leading suppliers. At the outset Transition adopted a strategy of writing follow lines on the larger Assets All Risks type policies depending on risk segmentation and quality Transition specialises in corporate assets risks for large corporate client’s i.e. Telkom, Eskom, Impala etc with operations in South Africa and beyond. Our segments include Mining, Industrial ,Energy , Manufacturing and all other property portfolios says Winston.

The UMA offers covers such as Material Damage, Business Interruption and Machinery Breakdown as well as all assets associated with their clients activities.

Transition’s partnership with New National (South Africa’s oldest empowered insurer) has been in existence for the past three years. New National has just exceeded the R1billion mark in premium income and boasts impressive empowerment credentials.

Due to New National being involved in other classes of business (motor, liability, engineering, marine etc.), Transition is able to offer a seamless product to its clients.

The partnership is also a welcome step towards transformation in an industry where change happens slowly. “We share the common vision of meaningful transformation in the corporate insurance space” says Rose.

Address: 11 Boundary Road, Isle of Houghton, 1st Floor, No 2 Harrow Court, Parktown, Johannesburg Directors: Winston van Zyl (cell no: 0823383960) and Tony Rose (cell no: 0834538673) Ownership: 50/50 between Winston van Zyl and Tony Rose respectively Tel: (011) 4846802 | Fax: (011) 4849385 | E-Mail: Winston@transitionrisk.co.za and tony@transitionrisk.co.za

New National Assurance Company Limited (Principle Insurer)

jun 14 PAGE 13

company profile “That was seen as one of the biggest innovations in the insurance industry. The concept started in South Africa in 1993, the licence was awarded in late ’95 and I joined Guardrisk in ’96. I became the MD in ’99 and remained there until 2002. We went from a start-up to a R3 billion company in six years,” says von Widdern.

Guardrisk started in the short-term insurance but grew very quickly adding numerous different products to its portfolio. “In ’99 we started a life company (still one of the big innovations in that space), we also issued a license which was focussed on risk financing and building reserves for HIV Aids called Aids Guard, we started a licence in Mauritius called Guardrisk International and we did all of this in six years,” notes von Widdern.

“Since then, Guardrisk has continued to do very well; it’s now more than double that size at R10 billion. By the time I left, the company had become a 100% subsidiary of the Alexander Forbes group. There was a natural fit with having a very strong distribution chain in Alexander Forbes (both on the short-term and life side) and the products offered by Guardrisk.”

Von Widdern looks back fondly on his time with Guardrisk calling it “a fruitful and innovative time for me, being involved in the start-up of a company and taking it to critical mass and also being involved in a number of innovations there,” and when he left to join Marsh, his

Specialists in the Motor Fleet Insurance Industry “We are very proud to be associated with Marsh for the past 14 years” Tel: +27 11 781 7939 Fax: +27 11 781 7940 Email: grant@motoracceptances.co.za

excellent risk selection • accurate underwriting • integrity • equity • fairness Authorised FSP Number 12118 | Registration Number 2000/011175/07 Underwritten by Compass Insurance Company Limited, FSP Number 12148

PAGE 14 jun 14

personal development and that of his new employer didn’t slow one bit.

“When I arrived at Marsh, I had the option of becoming a senior financial executive or working in more of a consulting type role. Marsh in South Africa was fairly small at the time but had some very large corporate accounts like Anglo American,” he says.

“We wanted to focus on very large clients in a way that we could add value, make sure that we understood the full range of strategic risks and bring a new level of thinking.

“I came at it from a financial strategic element. I was also appointed to the board of Marsh and through that process understood that we had access to risk consulting engineers and a variety of other specialist risk areas.

As a result of my interest in that area, that division was handed over to me in late ’02 and from early ’03 I started travelling around the world, seeing how all these specialist practices worked whilst still continuing with my normal job in South Africa.”

From 2004 to 2006, he had responsibility for Latin America, Africa, Australia and Asia in terms of the strategic development of Marsh Risk Consulting. A very busy time for von Widdern, he would travel for roughly one week east – to Australia, Taiwan, Hong Kong, Singapore and back, and the next week west - to Brazil, Argentina, Bolivia, Columbia, Mexico, USA and back. “I would meet the teams and try and develop our strategy and client contacts

Marsh Risk Consulting

jun 14 PAGE 15

company profile “We put the teams together and they were very complimentary in terms of their skills sets,” he says.

The Marsh/Forbes combination was one which allowed for service levels of the very highest order. The skills and customer bases of the two companies complemented one another perfectly and to this day, both continue to reap the rewards of that decision.

“In the local market, the approach and the value proposition of Forbes and Marsh was very similar; to give the highest quality professional service and really understand clients well. It was really the upper end of professionalism and technical competence” and so forth.”

He then took on a slightly different role, with responsibilities in the Middle East as well as Africa because Marsh’s global reporting changed.

“I got to know all the specialist practices and assimilated those so I learned a lot about strategic risk and business continuity, and from a financial side I had assimilated risk finance concepts from Guardrisk. We developed risk consulting strategies across many geographies.

“From 2009 to 2011, I was given the responsibility of the Middle East as well as South Africa so I spent half of my time in the Middle East and half in South Africa.

That was how I got to know those countries and roll out strategic value propositions for a variety of risk consulting services.

“In the mean-time we grew the business in South Africa and in 2011 we completed a deal where Marsh bought Alexander Forbes and from the beginning of 2012 my focus was purely on South Africa because we then had a very large risk consulting team.

“We had nearly 100 colleagues in the combined risk consulting team based on 45 from Marsh SA and the Forbes team was already 65 strong. Forbes in South Africa had nearly 800 people whereas Marsh only had around 200.

PAGE 16 jun 14

“In the local market, the approach and the value proposition of Forbes and Marsh was very similar; to give the highest quality professional service and really understand clients well. It was really the upper end of professionalism and technical competence.

“Forbes by their size and history and scale, had a very well established sectoral footprint – hospitality, financial services and others. Marsh, because of the globals, was very strong in mining, banks and some other industry elements. In almost every industry sector, Forbes had very good penetration and that was just a fact of life as they had, through their networks, grown a very solid company over 40-50 years.”

RISK MANAGER OF THE YEAR In October 2013, at the Gallagher Convention Centre in Johannesburg, von Widdern was recognised for his contribution to the industry and was named Risk Manager of the Year by the Institute of Risk Management South Africa (IRMSA).

The awards recognise the best risk professionals in South Africa and von Widdern puts his success down to the wide range of activities that he has overseen throughout his career.

“It was a big surprise. It’s given to corporates and their risk managers.

Marsh Risk Consulting opportunity,” he says.

“I always knew that I wasn’t going to be a formal reporting accountant. I always found the CA route to be highly versatile and open many opportunities to add value through financial problem solving.

“I had the opportunity to convert a premium finance book and start many other businesses. When I was in a private company the entrepreneurial environment suited me.

“I qualified as a chartered accountant and I did an MBA with Henley while I was at Guardrisk.

“I learnt a few tough lessons as a founder and manager of businesses that we acquired, I realised that in commerce not everyone does what they say.”

All of this points to one very concrete conclusion: Under von Widdern’s leadership and with clear targets in place, the future looks very bright for MRC and with the tag of ‘grudge purchase’ gradually being applied less and less, companies are now looking to the big risk advisors and insurers as partners and investments rather than costs and hindrances.

The message from von Widdern is clear: “When you consistently use the right level of risk expertise, you can position the business as best in class and thereby minimise your cost of risk on a consistent basis.”

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“Perhaps in my favour was that I’ve been lucky to gain experience from a variety of risk practices.

From property hazard, business continuity, supply chain, environmental risk; all the qualitative and operational risk areas, through to risk financing, captives, quantitative risk assessment, buying and establishing an asset valuation team, doing the same in the environmental space, building a forensic accounting team for claims - in the context of my 12 years at Marsh, I’ve seen and experienced a variety of risks that are perhaps unusual and we’ve developed all of them successfully so the scale and variety might have been different to the experience of most risk managers.”

The success achieved by MRC and von Widdern throughout his career has not been down to luck or being in the right place at the right time. Hard work, determination, persistence, innovation and entrepreneurialism have all contributed to the success and these qualities were instilled early on in his career.

“I studied part-time and in those days most of us had to go into the army so I joined the army and when I left, through friends and contacts, I was offered a job where we had the opportunity to buy businesses, fix them up and run them for profit. For a new accountant, that is like heaven. It’s a highly creative, highly stimulating

Together we can grab Worry by the scruff of its neck, poke it in the eye and give it a good old wedgie.

Oh, and we can also sell insurance together.

We’re super proud of the lasting partnership we’re building with Marsh.

When we work with people like you, everyone’s lives become a lot less worrisome.

personal

commercial

corporate

investments

Hollard Short-term, Hollard Life and Hollard Investments are Authorised Financial Services Providers.

jun 14 PAGE 17

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