COMPANY PROFILE
2014
Sasria SOC Ltd
An altogether different insurance offering
company profile
An altogether different insurance offering Editorial: Christian Jordan Production: Ajuanne Payne
IndustrySA talks to Sasria Managing Director, Cedric Masondo who explains more about the company’s plans for the future and how business has changed since this interesting company was formed in 1979.
When you think of the insurance industry, what is the first thing that comes to mind? Perhaps car insurance? House insurance? Life cover or corporate cover? All everyday products that every business person will have dealt with at one point or another. But what happens when something completely unexpected happens? Something that is not covered by regular insurers? Not a hurricane or hailstorm but something that can be equally as destructive. How about a political uprising? Or maybe a street riot, a strike or even a terrorist attack? Most insurers will not cover this type of risk and this is where you need a specialist; a company with over 30 years’ experience in the market place. Enter Sasria, the company with the vision of ‘protecting the assets of all South Africans against extraordinary risks’. Managing Director, Cedric Masondo tells IndustrySA that it was exactly this type of extraordinary risks that prompted the formation of the company back in 1979. “The company was born after the 1976 riots,” he says. “As a result of those riots, almost all insurance companies were not prepared to write political risk. Most companies put in exclusions that if there was any damage caused by riots, holders would not be covered. “People in South Africa were scared because their
PAGE 2 MAR 14
property was at risk and insurance companies may not respond.” The government at the time and SAIA (South African Insurance Association) formed a company to take care of this risk. Masondo says that the aim was solely to write this political risk that no one else was prepared to write but in the years after inception, the company’s service offering has grown. “Over the years the company has grown, especially through the 80’s, which was a difficult time for political unrest, and through the 90’s with the new government in 94, the cover was extended so we were no longer just providing cover for political risk. We were now also providing cover for any riot, including political riots, labour strikes, civil unrest and even terrorism.”
STATE OWNED Sasria is fully owned by its only shareholder, the South African government. In 1999 the company was commercialised and began operating as a fully-fledged insurance company as Masondo explains: “In the late 90’s there was a debate as to who really owned Sasria. As a section 21 company, no one really owned Sasria. Originally, no one really put too much cash in and after many years the government remained the re-insurer of last resort.
Sasria SOC Ltd
“At that point there was a surplus in capital and around R11 billion was paid back to the government for the debt that was caused insuring the apartheid years. Since 1999 we have reported to the national treasury.” At the turn of the millennium, Sasria’s market place changed and the company began to see more and more non-political claims. “We no longer had the issue of political parties fighting with each other which was obviously good but we were seeing more and more claims as a result of social economic problems,” says Masondo. “The last three years has seen a change in claims. We used to get around 200 claims each year but there has been a spike. We have seen a huge increase in claims following violent protests and destruction of property. But, this has resulted in an increase in people’s awareness of Sasria.” This increase in awareness of the brand has been particularly helpful for the company as it has looks to expand. “We’ve looked at expansion in two areas; geographical expansion and gaining more clients,” says Masondo. “We are governed by a mandate so we can’t just write any business. We are restricted by an act of parliament to only write special risk so you will never find Sasria writing the normal type business. “There are enough insurance companies who are well
equipped to write this type of business. We want to expand within our mandate and write more business.” Masondo says that there are a number of potential customers still obtainable for Sasria and two industries in particular have recently formed the focus of the company’s marketing. “During the farming strikes two years ago, we realised that a lot of farmers were not buying Sasria so there was an aggressive campaign on our side to encourage business in that area. What we’ve also found is that black SME’s do not buy Sasria mainly because they don’t buy insurance at all and this is strange because these can be the main victims. This will be another area of focus for us going forward. It’s part of our social responsibility to provide cover to everyone.” When it comes to geographical expansion, outside of South Africa, Masondo admits this is a difficult prospect but not something that Sasria will rule out. “You are moving in unknown territories with different risk. Of course, we have to inform our shareholder, the government, and get their approval,” he says. “If we do expand into Africa it will be mainly following South African companies. If a customer wants to go and do business anywhere in Africa, we will make sure they are fully protected.
MAR 14 PAGE 3
company profile
Cedric Masondo “We do want to grow and we do have a plan for the next five years. We are busy finalising the strategy with our shareholder. We want to improve in terms of efficiency and make sure contribute to the development of people.”
STRONG PERFORMANCE As Sasria grows, the hope is that the company can continue with the sound financial performance that it has displayed over the past few years, despite the challenging economic
conditions. “We are doing well in terms of the top line, we are attracting more premiums and we have managed to not increase the rate. Our intention is to maintain the low rate but write more business,” explains Masondo. “In short, we are doing quite well but not as well as in the early 2000’s, mainly due to situations in the economy. However, we are financially sound and have a strong balance sheet and we can deal with big claims.”
Meet Cedric Masondo “I’ve been with Sasria for over five years. I joined in 2009 as an executive. At that time the company was going through a transformation and we didn’t even have an underwriting department so my role was to establish that department. “Two years later I was appointed as MD. I have been in the industry for more than 20 years, working for companies like Alexander Forbes, Allianz and Excel so I’ve been around, especially in the short term sector. “In the last three years we’ve transformed from a small company to a medium company.”
PAGE 4 MAR 14
Sasria SOC Ltd
The global economic recession, which hit hard in 2008, did not impact majorly on Sasria and the company has witnessed significant growth. “In the past five years we’ve enjoyed around a 10% increase in premiums year on year so the economic slowdown didn’t impact on us too much. We also picked up a lot of business as a result of the 2010 FIFA World Cup but where the global slowdown has hit us has been with social economic problems; more people are unemployed, strikes tend to be longer and more disruptive whereas prior to 2007, very few strikes were destructive,” says Masondo. Nevertheless, Sasria continues to work with a wideranging, highly powerful range of clients. This includes the likes of Eskom and Telkom; anything from individual clients through to big corporates. The company’s strong performance spans both its financial figures and its business culture. There is a solid commitment to people development and when it comes to CSI, the company focuses on the advancement of young people. “We contribute 4% of our net profit to CSI projects,” Masondo explains. “As a state owned company we appreciate principals of the National Development Port ofthe Ngqura
Programme. Because of this, all of our projects are aimed at youth and education. We don’t benefit directly and we believe if more companies contributed like this, we would not have a skills problem. We are proud of what we have achieved so far.” Sasria is right to be proud. What it has achieved since its inception is remarkable; a testament to the insurance industry and with the ambitious plans that the company has in place for the coming years, no one could bet against this innovative organisation achieving its vision.
.
“We’ve looked at expansion in two areas; geographical expansion and gaining more clients” MAR 14 PAGE 5
011 214 0800 www.sasria.co.za
(0)1603 618 000 info@industrysa.com East Coast Promotions Ltd, Ferndale Business Centre, 1 Exeter Street. Norwich, Norfolk NR2 4QB