The Story of Munich Re in Africa
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F O R E W O R D
Foreword When Munich Re took the decision in 1968 to
From the arrival of Ernst Kahle as deputy
expand into Africa, the venerable German com-
general manager in 1972 to his retirement
pany chose South Africa as its base. The choice
after nearly two decades as general manager,
came with some major challenges.
Munich Re South Africa (MRSA) was deeply
There were already reinsurance companies
involved in the struggle to turn the apartheid
operating in South Africa. Gaining a foothold
state into a country where all races were
in that market would not be easy. Nor would it
treated equally and all had the same opportuni-
be easy doing business in a land in the grip of
ties to rise. His successors have continued to
apartheid, for South Africa then was very differ-
build on his legacy.
ent from the country one finds today. Apartheid was at its height. The separation
Consequently, in a charging post-apartheid South Africa, Munich Re leads its peers in
of the races ranged from drinking fountains
transformation, as can be seen in its staff pro-
designated “white” and “non-white” to universi-
file. A representative board with a black chair-
ties set aside for different race groups. The bet-
person, two women, and five black, seven local
ter neighbourhoods and medium-to-high-level
and two international directors. Similarly our
jobs were reserved for whites. Black participa-
management team, led by a black CEO with a
tion in business was also severely restricted to
staff composition of 63% black, 28% white and
designated areas, goods and services.
9% foreign national, is indicative of a diverse
Liberation movements that were challeng-
and global organisation. Focus throughout the
ing this situation had been banned. Detention
organisation is on training and development.
without trial was written into law. Opponents of
During this period the business has registered
apartheid were imprisoned, banned and exiled.
record growth and expansion.
In the same year, 1968, the National African
Today Munich Reinsurance Company of
Federated Chamber of Commerce (NAFCOC)
Africa Limited is easily the major reinsurer on
was formed by Sam Motsoenyane to campaign
the continent. Munich Re is firmly planted in
for reforms that would allow greater participa-
projects from the top of Africa to its southern
tion by blacks in the economy.
tip and expanding its influence across the con-
The leaders of any multinational intending
tinent. With its focus on infrastructure, financial
to operate in South Africa had to face these
solutions and life products, it is well positioned
realities in their quest to run a normal company
to own the future.
in an abnormal society. And they needed to ponder a crucial question: What was the busi-
Sipho M Pityana
ness of business? Was it simply to build a suc-
Chairman of the Board
cessful company? Or was it to build a nation?
Munich Reinsurance Company
For Munich Re in South Africa, it was both.
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of Africa Limited – March 2013
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Soweto houses 1975
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S O W E T O ,
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1 Soweto, June 16
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{
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Apartheid signs
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C H A P T E R
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S O W E T O ,
J U N E
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Chapter 1:
Soweto, June 16
On the chilly morning of June 16, 1976, hun-
that criss-crossed the skies above the
dreds of Soweto high school students set
township.
out for a rally at Orlando Stadium to protest against the introduction of Afrikaans as a medium of instruction. As they made their way
As night fell, scores of young people lay dead. The violence continued for several days
through the dusty township streets, young
in Soweto and in Alexandra township, north
people came from all directions to join them. It
of Johannesburg. It spread to other cities
was a remarkable sight: the marchers swelled
across the country before damping down some
to a crowd of 15 000, most of them in school
months later. The toll was heavy: close to 600
uniforms.
people had been killed in clashes between
The students never reached their destina-
unarmed students and police, or caught in the
tion. Police formed a wall to block their prog-
crossfire, or killed by being in the wrong place
ress, and fired teargas. Students retaliated with
at the wrong time.
stones. Then policemen fired live ammunition
By the end of the year, the country seemed
into the crowd – and the peaceful streets of
quiet. Students were back in school. Police had
Soweto were turned into a war zone.
returned to their normal duties. The govern-
It was a day of pitched battles. The students rampaged throughout the township, destroying apartheid symbols – administrative
ment banned a range of people, from academics and clerics to labour leaders. There was a lot of activity under the
offices and, especially, the municipal beer halls,
surface. Quietly, in townships and tertiary
where their fathers spent the money that paid
institutions across the country, activists were
the salaries of the government officials who
organising. Meanwhile, many of the students
administered the hated apartheid system. They
who had participated in the uprising fled into
set fire to cars and looted shops.
exile; some were sent for military training in
Police brought in anti-riot vehicles and
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eastern Europe.
dropped tear-gas canisters from helicopters
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Protesting students
It would take nearly two decades before apartheid was destroyed. But June 16 was the beginning of the end. Munich Re had been in business in South Africa for nearly eight years by then – and it would not be long before Munich Re of South Africa would become involved in the struggle for democracy.
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T H E
B E G I N N I N G
2 The beginning
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Chapter 2:
The Beginning A century earlier, Carl von Thieme, the Bavarian
Pemsel, banker Philipp Schmidt-Polex and
representative of German insurance company
banker and politician Friedrich von Schauss.
Thuringia, was working out the details of a new way of doing business. Reinsurance was a gamble – and a very
In 1880, the Münchener RückversicherungsGesellschaft was founded – modestly, in a tworoom office with a staff complement of four.
risky one. German reinsurance companies were
More than a century later, the staff would have
tied to primary insurers. When the primary
grown to 47 000, in branches and subsidiaries
companies sank – and they did, with disturbing
around the world.
regularity – the reinsurers headed for the rocks.
Munich Re’s first client was, not surprisingly,
By the end of the 1870s, two-thirds of Germa-
Thuringia, but it was not the only one. The firm
ny’s reinsurance business went to foreign firms.
soon found customers abroad, starting with a
Von Thieme had a better idea. Why not
Danish firm, and, by 1886, they had opened a
establish an independent reinsurance com-
Paris office to deal with clients in Belgium and
pany? And, further, why not spread the risk
Spain. Offices were opened in St Petersburg,
across a range of areas and markets? When
specialising in marine reinsurance, in Copenha-
one market or region sailed into difficulties –
gen and Stockholm.
due, perhaps, to an earthquake or a shipping
Meanwhile, in 1889, Von Thieme and Von
disaster – the resources of another could be
Finck founded their own primary insurance com-
brought in to keep it afloat.
pany, Allianz Versicherungs-Aktiengesellschaft,
He convinced a number of investors to
initially specialising in third-party and personal
join him in his new venture. Most important,
accident insurance before its focus shifted to
initially, was Theodor von Cramer-Klett, the
property.
founder of one bank and co-founder of another,
Munich Re grew by leaps and bounds – a
as well as a manufacturer – his engineering
London office was opened, then one in the
works produced everything from steam engines
United States. Its interests spread to “machinery
and bridges to guns. Banker Wilhelm von Finck,
insurance” – the beginning of an engineering
in business with Von Cramer-Klett, put money
division.
into the new firm, and so did lawyer Hermann
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Then came the 1906 San Francisco earth-
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quake. It measured 7.8 on the Richter scale, killed more than 3 000 people, destroyed buildings and infrastructure over 100 hectares
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But by 1937 the company was back to its pre-war level. And then came World War II. In a prescient move, Munich Re had
and dealt a heavy blow to Munich Re. It was
established the Union Reinsurance Com-
the company’s most costly natural catastro-
pany in Zurich and the Swiss office was able
phe – but afterwards, Munich Re was known as
to maintain the firm’s international business
the only reinsurer that remained solvent after
during the war. However, when the war ended,
paying out the claims. “Thieme is money...” was
the Allied forces prohibited German reinsurers
reputed to be the buzz word among claimants,
from operating outside the country. Munich Re
referring to the Munich Re founder, in recog-
lost its assets in countries involved in the war,
nition of the company’s outstanding claims-
in neutral countries, and in what became East
paying reputation.
Germany. At the same time, currency reform
The company’s growth was often beset with difficulties not of its own making. Munich Re had moved on to travel, motor
cost the company dearly, and fires and heavy storms wiped out a large portion of its profit. But in 1950, when the prohibition against
and aviation risks and begun doing business in
international business was lifted, Munich Re
Japan when World War I broke out, affecting
began to grow again.
much of its foreign business, with customers
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In 1959, a subsidiary for life reinsurance
not allowed to trade with a German company.
was founded in the United States, and a year
The end of the war did not bring a restoration
later a subsidiary was opened in Canada. An
of its previous status: the Treaty of Versailles
office was opened in Hong Kong in 1963 and a
closed off Russia, France, Britain and the
liaison office was founded in Japan in 1967.
United States to German companies, including
In 1968, Munich Re moved into Africa.
Munich Re.
Original Munich Re Logo in use up until 2009
Current logo since 2010
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