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B E N F I E L D
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Why
reinsurance? Demand for insurance and reinsurance continues to grow quickly in Africa. Writer Ian Armitage Project Manager Eleanor Watson
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on Benfield is the global reinsurance intermediary and capital advisor of worldwide insurance, reinsurance and risk management specialist AON plc. Okay, you say, that sounds great, but what exactly is reinsurance? Put simply, a reinsurance company is a company that insures another insurance company. Why would an insurance company need reinsurance? Well, there are a couple of reasons. First up, think of catastrophic events like Hurricane Sandy in the US or the Christchurch earthquake: Without a fail-safe, events like that could bankrupt an insurer. There is another reason too. Having a company to guarantee against certain losses frees up an insurance companies’ working capital, which means they can invest it elsewhere. You can see the appeal and companies like AON Benfield play an incredibly important role in offering reinsurance, enabling firms to offer a wider range of insurance packages on the African continent. AON has subsequently used South Africa as a hub from which to develop the rest of the African market, opening doors with respect to reinsurance broking. It has managed to establish itself as market leaders in several countries. AON Re Africa is the reinsurance division of AON in Africa. AON bought Benfield for $1.43 billion in 2008. “Reinsurance is critical to helping insurance companies underwrite risk profitably, while preserving or enhancing capital strength and ratings,” the company says proudly, adding on its website that it provides “clients with unbiased capital advice”. “As the industry leader in treaty, facultative, and capital markets, our unique position and impartial perspective ensures that you receive the best advice and the optimal form of capital to meet your needs,” it says.
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EMERALD RISK TRANSFER Emerald is a leading provider of corporate property and associated engineering insurance products throughout the African continent Emerald is a fully intermediated company and underwrites exclusively for Santam Insurance Ltd, South Africa’s leading short term insurer with a Standard and Poors rating of A- , and assets in excess of R17 Billion Backed by skilled and experienced complex claims technicians and professional engineer, Emerald’s underwriters are able to find solutions for even the most complex risks Correct understanding and measurement of risk, appropriate reinsurance placement and accounting and effective claims management are all key to Emerald’s underwriting approach Tel +27 11 658 8200 Email info@emeraldsa.co.za
www.emeraldsa.co.za
It also talks about the importance of gaining access to insurance. “In today’s world, gaining access is critical to success,” it says. “Access to reinsurers however is not nearly enough - you need access to all forms of capital, the latest analytical tools, the best people and the best ideas. AON Benfield brings the entire global marketplace within reach, offering seamless access to a full range of markets, products and services to help you compete and win.” It stresses the importance of advocacy and innovation too. “With the backing of the world’s largest reinsurance intermediary, you are far from alone,” it says. “As your advocate and advisor, AON Benfield deploys the full strength of our organization on your behalf to ensure you are in the best possible position. Because we put your interests first, we succeed when you succeed. “AON Benfield has a long history of pioneering cutting-edge solutions and proprietary tools,” it adds, referring to innovation. “From the creation of the industry’s first catastrophe model, to state-of-the-art portfolio optimisation strategies, to the first proprietary source of catastrophe capacity, AON Benfield helps you stay ahead of the curve.” This is a good time to be involved in reinsurance, with demand for insurance and reinsurance continuing to grow quickly in Africa.
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SHAPING UNIQUE
SOLUTIONS THAT SHINE
Emerald is currently the largest Corporate Property and affiliated Engineering Underwriter in South Africa, and underwrites business throughout the African Continent. The solution orientated approach of the Emerald team to create sustainable, quality products is part of their culture. This flexible approach, coupled with the support of their excellent Reinsurer panel, 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.
For more information on how Emerald can assist your Corporate clients, visit our website or call us. T +27 11 658 8200 W www.emeraldsa.co.za E info@emeraldsa.co.za Find us on Facebook www.facebook.com/ emeraldrisktransfer Or follow us on Twitter www.twitter.com/ emeraldrisk
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AON offers a full range of markets, products and services to help you compete and win
AON Benfield has a long history of pioneering cutting-edge solutions and proprietary tools. From the creation of the industry’s first catastrophe model, to state-of-the-art portfolio optimisation strategies, to the first proprietary source of catastrophe capacity, AON Benfield helps you stay ahead of the curve”
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Rating agencies are awarding stronger ratings to African Reinsurance providers and African economies continue to boom. Indeed, according to The Economist seven African countries - including Nigeria, Ethiopia and Mozambique - are forecast to be among the 10 fastest– growing economies over next five years. Nigeria has the largest population in Sub-Saharan Africa, which, combined with being the second largest economy - after South Africa of course - gives it the highest potential for life insurance in many peoples’ eyes. The middle class in each of these countries is driving a growing demand for goods and services. Demand for insurance products, new or otherwise, should follow. “The urban consumer class represents a huge opportunity for the insurance industry. The key will be unlocking it,” one expert predicts. Africa has not escaped the general increase in the worldwide incidence of natural catastrophes that, according to an AON, saw 900 occurrences globally in 2012, compared to 820 in 2011. There has been widespread flooding in Mozambique, Kenya, Tanzania, South Africa, and Nigeria, and severe drought in parts of the horn of Africa. The lack of
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insurance in these areas shows that the market is still very much in its infancy and with the exception of South Africa, should translate into immense potential. Established in July 2008, the AON Benfield Natural Hazard Centre Africa is a collaboration between AON Benfield and the University of Pretoria, one of South Africa’s leading research universities. The centre provides “expertise and research” on natural hazards, particularly seismic hazards, which affect South Africa and neighbouring territories. It also assists in the development of Aon Benfield’s proprietary GAP (Geographical Analysis Project) earthquake model for South Africa – GAPQuake South Africa - to benefit customers and the insurance market in South Africa. The Centre is led by Professor Andrzej Kijko and located at the University of Pretoria’s main campus. It works closely with the Aon Benfield Analytics Natural Hazards team in London and has extensive skills in earthquake hazard modelling, mining catastrophe, flood and meteorological risk. AON Benfield is a premier reinsurance intermediary and capital advisor. To learn more visit www.aonbenfield.com.
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E nquiries Tel (UK): +44 (0) 1603 559 151 Tel (SA): +27 (0) 21 527 0053 ben.weaver@outlookpublishing.com
S U B S CRI P TIO N S
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