COMPANY PROFILE
2014
Thatch Risk Acceptances
Changing perceptions of the insurance industry
company profile
Changing perceptions of the insurance industry Editorial: Christian Jordan Production: Ajuanne Payne
Thatch Risk Acceptances is the only company to specialise exclusively in residential thatch insurance. After the St Francis Bay fires in 2012, the company was commended for the way it dealt with the numerous claims that came in, so IndustrySA speaks to Managing Director, Natasja Blok, to find out more about the company and its plans for the future.
On November 11th 2012 an electrical fire started in the village of St Francis Bay, a holiday village in the Eastern Cape. Strong winds carried the burning embers from home to home setting alight over 75 homes, many of which had thatched roofs. At the time, there was widespread media coverage and a lot of attention on the area with the fire losses being considered as one of the most severe events in the insurance industry’s recent history. Controlling the fire proved extremely difficult under the windy conditions and when the flames eventually died down, thoughts turned straight to the clean-up operation. “In the immediate aftermath it didn’t look like a fire, it looked like a bomb had hit the town. We have never seen
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anything on that scale,” says Natasja Blok, Managing Director of Thatch Risk Acceptances. The insurance companies started to deal with the losses and reports at the time suggested that the claims could run into hundred-millions of Rands. Fortunately, South Africa’s financial institutions are some of the strongest in the world and the insurance industry has remained strong even during the tough global economic conditions. In the past we have featured various insurance companies who have all reported great successes and this month we speak to Thatch Risk Acceptances (TRA) who tell us that despite the high value claims made after the St Francis fires, the company is showing steady growth and customers remain happy because of TRA’s unrivalled
Thatch Risk Acceptances
commitment to quality service. The St Francis Bay fires were a unique incident for the insurance industry and because of the way that TRA and the rest of the industry dealt with challenges, there has been much praise for the company. “We realised very early that it was going to be a huge claim. We had never experienced losses of these proportions in the personal lines insurance industry in South Africa. Never before have we seen so many homes burning at one time, so it also turned out to be a historical event in our industry. Because the insurance of thatch homes is our niche, we picked up most of those claims,” explains Blok. “We worked very closely with Compass Insurance
Company Limited and Hannover Re as we realised that the claims settlements would be in excess of R100 million and if we were going to pay out those amounts, we might just as well do it brilliantly. It would ultimately be our biggest marketing campaign and as we all know, it is at the claims stage where your customers will find the most value and benefit in your levels of service. We set out to assist our brokers and clients to settle the claims. Our goal was to ensure that all pay-outs would be done as soon as possible, by increasing our cash flows. Everyone was committed to doing things as quickly and as painlessly as possible for the clients. “Insurance is such a grudge purchase and I think people hardly ever see the value, so I hope that we were able to
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company profile
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Jindal Africa
The Eastern Capes premier loss adjuster... …with over 18 year’s international and industry experience servicing markets such as: Corporate, Commercial, Sectional Title, Bonded Properties, Captives, General Domestic Losses and Catastrophe Losses both local and abroad. We are proud to have supported the insurance industry, especially Thatch Risk Acceptances, who carried the majority of losses through the St Francis Bay fires. No appointments are too small and we are proud to be involved in large complex losses. Meyer Loss Adjusting is BEE compliant and in terms of the new legislation holds Level 5 status. We hold comprehensive Professional Indemnity Cover and certificates can be produced on request.
We deal in numerous fields including: Commercial Claims Building Claims – Householders/Homeowners Burglary, Robbery, Theft and Money Fidelity Guarantee Jewellers Block
Surveys Goods In Transit Fire and Allied Perils General Liability, Products, Public Accidental Damage
Agricultural Claims General Marine Claims (Cargo) General Business Interruption Contractors All Risk
Eastern Cape working areas: George Port Alfred Plettenberg Bay East London Outshoorn Mthata Humansdorp
Graaff-Reinet Cape St Francis Grahamstown Jeffrey’s Bay Middleburg Port Elizabeth and surrounding i.e. Uitenhage and Despatch
Physical address: 11 Bendor Drive, Beverley Grove, Port Elizabeth Postal address: PO BOX 70403, The Bridge, 6032 Email: marius@mla-ec.co.za | adele@mla-ec.co.za Tel: 041 379 5402 | 061 404 0357 Fax: 086 767 8310 Cell: 061 405 4501
Reg. no: CK2009/020952/23 Managing Member, Marius J Meyer is Vice Chairman for the Eastern Cape for the Institute of Loss Adjusters of Southern Africa. JAN 14 PAGE 5
Providing a focus on quality and service When the St Francis Bay fires caused havoc to many properties in 2012, insurance companies came under the spotlight for the way they handled the response to the damage. After the emergency services had finished in their role it was down to the insurance companies to help people rebuild their homes and in some cases their lives. Meyer Loss Adjusting played a big part and assisted Thatch Risk Acceptances throughout the whole process. IndustrySA finds out more about the Eastern Capes premier loss adjuster…
Meyer Loss Adjusting CC (MLA) was started by Marius Meyer in 2007 after working for local and International Loss Adjusting firms since 1995. Prior to Loss Adjusting, Marius started his career within the insurance market and realised where the market needed to focus. “As a smaller firm, we focus on quality of adjustments and service with a new and dynamic claims approach. We also believe in sharing our knowledge with our clients and are involved in training, and auditing claims to maintain their set standards,” says Marius. The company has a wide reach in the Eastern Cape and tends to many different needs, from a range of clients. “As an Adjusting firm, we attend to a broad spectrum of claims over a large geographical area in the Eastern Cape. We also do marine surveys for cargo carriers. We furthermore assist our clients with risk management and surveys,” says Marius. “We attend to commercial claims, general and property loss for domestic, body corporate’s and bonded properties. We also attend to complex and catastrophic losses between George, Middelburg and Mthata. “We work for various insurance companies and for some we have service level agreements in place. Then we also assist claims underwriting managers and brokers directly.” Of course, the St Francis fires were a disaster but Marius suggests that the way the industry dealt with the
situation may have helped to renew faith in the industry. “We were part of an exceptional group whom swiftly settled the claims and I personally believe that the tragedy of the fire renewed the trust in the industry and the need to insure adequately. “As for 2014, I am sure we will respond to the challenges that our clients face and will assist them to the best of our ability. We have exciting plans for the future and we are adapting to meet our clients every need.” The relationship between MLA and Thatch Risk Acceptances (TRA) dates back to 2003 when Marius met the TRA team in Cape Town. “When I relocated to the Eastern Cape, TRA continued their loyal support and remain one of our best supporters in this area. TRA’s approach to modern day claims is truly inspirational and everybody in the team is effective and determined to provide excellent service to their clients and brokers,” says Marius. “We experienced a similar relationship between TRA and insurers which made the St Francis claim`s a true example of professional insurance when it mattered most.” As we move into 2014, Marius expects to see growth and change for the company and the industry, saying: “Growth is essential to every business and we shall advise the market and our clients during 2014. We believe that there will be changes but we think that samet will be beneficial to all parties involved.”
Thatch Risk Acceptances
portray to the public that we are there to help when they need us most. It is an amazing opportunity that we in the insurance industry have, to enable our clients to recover financially,” says Blok. “This sets off a chain reaction of opportunities starting with a huge boost to the local economy as our clients will be able to afford to rebuild their lost homes. “This in turn will assist with creating much needed employment opportunities. Many builders, building material suppliers and furniture companies did benefit from this as their revenue increased as a result of insurance pay-outs. “From the feedback we’ve had, I think we did achieve what we set out to. It’s satisfying to hear that we managed to lift the image of the industry through the way we dealt with the situation. “The rebuild is still on going and as many of the homes were holiday homes it will take some time to restore the area to its former beauty.”
company is now widely regarded as the leader within its niche. The company is small in terms of number of employees but each member of the team is a competent thatch insurance professional and has vast experience in the industry. “Our niche has never changed in 15 years and this is one of our key success factors. When you have a niche, you should stick to it and do what you know best,” says Blok. “Our staff eat, drink and sleep thatch. They work with it every single day and they are extremely knowledgeable about it. They could answer any question that could come up about thatch and this sets us apart from the other players. “In addition, we don’t run a call centre. We are very focussed on personal service and in today’s fast pace of business, this is still appreciated by many brokers when they experience our personal touch.”
HISTORY THATCH EXPERTS As the company’s name suggests, TRA’s focus is on thatched properties. This focus has remained the same since the company’s inception in 1998. This market is a specialist one and the service offered by TRA staff means that the
Importantly, as well as offering a personalised service, TRA tailors its business to the local market and to clients in South Africa. Before the formation of TRA there was not a dedicated thatch insurance specialist and some customers had to look abroad for their cover as Blok explains.
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company profile
“The company started 15 years ago because there was a need to insure thatched properties in the local South African market.” she says. “At that point in South Africa, there weren’t many players that were prepared to write thatched houses, businesses, lodges, hotels, etc. Most thatch insurance business was placed at Lloyd’s of London on binders, so there was a gap in the South African market for a niche player and that’s how we got started.
“Everyone was committed to doing things as quickly and as painlessly as possible for the client and this is the feeling we wanted to leave there” TRA offers a complete service to its broker base, with a full mandate from Compass Insurance Company Limited (see our June 2013 edition for more on Compass Insurance Company Limited) to provide quotations, issue policies and manage the entire claim settlement process. “Compass specialises only in UMA’s, and therefor does not conduct any business directly with the broker or the public.
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“As a UMA we are not allowed to deal with clients directly and our only distribution channel is via our broker network,” says Blok. “Most personal lines brokers will have a portfolio of clients where maybe 2% of their total client base will have a thatched roof property. So the broker doesn’t deal with thatched roof properties on a regular basis, whereas we deal with these risks daily. This also sets us apart from our competitors and gives us the opportunity to build on our experience and expertise to understand the risk.” Dealing with a broker network allows TRA to maintain their focus on the thatch industry, continuously updating their knowledge.
HARDENING INDUSTRY? “We’ve been in a soft market cycle for a very long time across the whole insurance industry in South Africa. Following various big losses that we faced in 2012, including the fires in St Francis, we were one of the first to implement rate increases. Initially it was met with some resistance as the brokers had been used to years of a soft cycle,” says Blok. “Apart from the St Francis Fires, the industry also experienced severe floods in various parts of the country as
Thatch Risk Acceptances well as extreme hail storms resulting in huge losses, so we did expect more hardening of the market,” she explains. “Over the course of 2013, we have seen the market increasing the motor rates up to 20% with the average rate increases being around the 7% to 10% mark. The non-motor rates are also going up and in some cases, even where the client did not lodge any claims during the past 12 months, they received double digit rate increases.” The challenging economic conditions along with unpredictable natural events resulted in increased loss ratios for the industry. “In addition, with the slowing down of the economy from 2009, growth remains a challenge for all of us and we have seen some unsustainable ratings to gain new business. The recession has resulted in less disposable income for many people and, of course, this has an impact on the construction of new and maintenance of existing thatched properties,” says Blok. “As for the future, I think the market will improve slightly for 2014,” she says. “At TRA we are happy with our results for 2013. I think, over time, businesses may have to consider diversifying to achieve growth targets. As for working in the industry and being a part of the
Natasja Blok
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company profile
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Thatch Risk Acceptances
day-to-day issues that affect the industry, Blok says that the insurance industry offers fantastic opportunities and experiences. “The insurance industry in general offers you an amazing landscape that can take you anywhere. What I’ve been exposed to and what this industry has given me has been absolutely phenomenal and I love working in this industry,” she says. “My involvement in the insurance industry stretches further than just TRA, as I have been a Council member and Past President of the Insurance Institute of Gauteng (IIG) for a number of years and I am also a director on the board of the South African Underwriting Managers Association (SAUMA). I’m fortunate to be exposed to a lot of issues in the industry that are not just related to my own business. This keeps things interesting and my base allows me to participate in all of these other industry initiatives which I really enjoy. “One of the highlights of my career was when I received the Cover Excellence Award in the UMA Category at the Insurance Institute of South Africa’s gala dinner in July 2013.” The Cover Excellence Award is awarded to an individual who has made a significant contribution to the industry in the last 12 months. Cover magazine is the medium through which the industry expresses its appreciation and respect for those who have made significant contributions to shaping and uplifting the insurance industry. The Cover Excellence Awards acknowledge a winner for 2013 and a winner for a lifetime contribution in four categories: Short-term, Life Risk, Intermediary and Underwriting Management. Below is an extract of what was said when Blok was called up to receive the award: “Natasja Blok has led Thatch Risk Acceptances, where she is currently is Managing Director and shareholder with great distinction for eight years. Natasja has been on the SAUMA board for several years and was the President of the IIG in 2009. She, with the President of the IIG of that year, founded the IIG Charity Auction in 2005. Since inception of the IIG Charity Auction, R2.2 million has been raised for charities including Wet Nose Animal Rescue, Frederic Place, Marang House, Just
One Child and Oasis Haven. “All in the industry are aware that TRA picked up a significant number of claims from the homes that burnt at St Francis Bay. The value of the 30 claims that came to TRA was in excess of R100 million. The way in which Natasja and her team mobilised and dealt excellently with such a devastating fire and the losses incurred, presented the opportunity for the insurance industry to demonstrate the value it offers. “The company received numerous compliments on how well the TRA/Compass Insurance Company Limited/ Hannover Re team handled all these claims. Natasja was remarkable in her dealings with the media on these claims; the public could witness that, though the insurance industry has been subject to huge losses over the past 14 months, none of the insurers or reinsurers has collapsed – all still have a high claims paying ability with significant financial resources. “Natasja devotes extra-ordinary effort and dedication to the insurance industry, to enhancing its reputation and to ensuring always that our customers come first.” So, in the case of TRA it seems that the ‘grudge purchase’ is one that has yielded extremely positive benefits for clients. The way that the company dealt with the St Francis fires and the fact that quality service remains the focus proves that insurance doesn’t have to be a battle. As TRA continues on its growth path, it seems certain that the company will achieve further success and continue to be recognised as the leader in its niche segment.
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“Insurance is such a grudge purchase and I think people hardly ever see the value so I hope that we were able to portray to the industry and to the public that we are there to help and there to rebuild” JAN 14 PAGE 11
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