PRODUCT OFFERINGS SHAPED AROUND SOUTH AFRICA’S TRADE CREDIT INSURANCE NEEDS
TRADE CREDIT THAT PR OTE CTS
We speak to Gareth Joubert, Managing Director of Hollard Trade Credit, about the company’s personalised and customer-focused product offerings that are shaped around South Africa’s trade credit insurance needs
Writer: Lucy Pilgrim | Project Manager: Ben Weaver
Gareth Joubert attained his position as Managing Director of Hollard Trade Credit, a trade credit insurance provider underwritten by Hollard Insurance Ltd, due to his deep commitment to fostering business opportunities in South Africa (SA).
“Insurance is typically about when things go wrong, either when your house burns down or you have a car accident. Trade credit insurance is about enabling trade for businesses,” he introduces.
Hollard Trade Credit was formed to serve the South African economic and corporate environment, creating insurance products that work in favour of the nation’s diverse range of businesses.
During his eclectic career, Joubert has worked in various areas of Hollard, amassing substantial knowledge and expertise before
eventually settling into the Group Business Development area of the organisation.
“Before taking over as Managing Director of Hollard Trade Credit, I was part of a team that was the eyes and ears to any innovations in the insurance space. People would raise opportunities and we would conduct feasibility studies on anything new or needing a facelift.
“This included previously nonexistent insurance products for weather indices, divorces, weddings, and intellectual property - one of those products was trade credit insurance,” he recalls.
“In the two years that I worked on establishing the trade credit insurance concept, I fell in love with it and the role it fulfils beyond the realm of insurance, enabling clients’ continued success.”
Hollard Trade Credit was
established in 2016 to provide compelling products that would facilitate trade in SA and help overcome various socioeconomic difficulties.
In the past eight years, these challenges have included periods of flooding and social unrest, along with the COVID-19 pandemic and global conflicts, each having a substantial impact on international trade and supply chain management.
The negative effects of these events have made it increasingly important that Hollard Trade Credit
provides clients with comprehensive insights into the economic and insurance environment so they continue to thrive.
“Our job is about ensuring access to sustainable trade and making sure we are doing the right thing for our clients,” Joubert emphasises.
SERVING SOUTH AFRICAN NEEDS
Upon inception, Hollard Trade Credit found that national penetration of the trade credit insurance market was approximately 15 percent.
This meant only a small number of businesses had leveraged trade credit insurance, which was surprising given the South African economic climate at the time.
Following further investigation, the company realised that existing trade credit insurance products were derived from a European model which has been in use since the 19th century.
As such, the trade credit insurance product used in SA was based around a more developed economy, in which it is easier for insurance companies to support their clients’ cash shortfalls.
“Significantly, trade credit insurance policies only respond six months after default, which is fine if inflation is low and the cost of raising large amounts of money quickly is achievable.
“However, in an emerging economy such as SA’s, the cost of raising cash is high, which results in greater repository and interest rates, causing a substantial devaluation of returns over six months,” Joubert explains.
For this reason, the European model of trade credit insurance was deemed unsuitable for the country’s financial climate.
A SELECTED BUYERS APPROACH
Alongside its trade credit product solution being tailored specifically around South African businesses, Hollard Trade Credit stands out from other major competitors thanks to its selected buyers approach, which reflects the company’s philosophy of putting the customer first.
Typically, insurance providers force clients to offer all their debtors for cover, which means that they are often spending premium on debtors they are not worried about and not fully covered on the ones they are worried about.
Hollard Trade Credit, however, offers a much more personalised approach by striving to have a greater understanding of its customers’ entire risk landscape.
“The customer tells us what keeps them up at night, and we’ll underwrite the risk and let them know if it’s a single trade or multiple. Plus, because of our holistic credit management solution, we can share the results of the underwriting with our clients.”
Furthermore, in the event that Hollard Trade Credit declines a risk, the company informs the client of the reason for doing so, which puts them in a position to make the right decision for their business.
As a result, Hollard Trade Credit created a trade credit insurance product built specifically for the South African market, with applicable qualities for other distressed or emerging economies.
The company’s product suite enables a policyholder or seller to insure any trade, from a single buyer to all of their buyers.
Hollard Trade Credit offers both domestic and export policies within its trade credit risk management solutions. Regarding the latter, its product use extends to buyers in the US, China, Europe, and other regions across the globe.
With its primary offices in Johannesburg, SA, the company also currently operates across Botswana and Namibia.
By following the footprint of Hollard Insurance Ltd, which has insurance licenses and entities across Africa, the business hopes to help secure trade
in Ghana, Kenya, Mozambique, and Zambia next.
With an expansive presence across Africa and beyond, the company creates trade credit solutions that are specifically tailored to the needs of customers.
“Our philosophy builds a product that revolves around our clients’ businesses, as opposed to the traditional corporate approach that forces them to fit inside the confines of a single offering.
“As long as the credit risk is something that is palatable to us, we can tailor the insurance product to respond appropriately for both the policyholder and ourselves,” Joubert highlights.
HOLISTIC CREDIT MANAGEMENT SOLUTIONS
A key component of Hollard Trade Credit’s portfolio is its holistic credit management solution. As part of this
offering, the company also assists clients in managing document risk and credit agreements.
This allows the company to differentiate itself from the wider market due to the fact it is more concerned about upskilling and creating a robust credit framework for clients, rather than simply offering a risk transfer mechanism.
Hollard Trade Credit also makes sure that all its credit agreements are up to date with any legal requirements or precedents such as the National Credit Act and the Protection of Personal Information (POPI) Act.
Going forward, the company additionally strives to facilitate the entire risk management framework.
“We share the decision-making tree so our clients understand why we might not be comfortable with a particular risk, enabling them to make the best decisions for their business,” Joubert insights.
“OUR PHILOSOPHY BUILDS A PRODUCT THAT REVOLVES AROUND OUR CLIENTS’ BUSINESSES, AS OPPOSED TO THE TRADITIONAL CORPORATE APPROACH THAT FORCES THEM TO FIT INSIDE THE CONFINES OF A SINGLE OFFERING”
– GARETH JOUBERT, MANAGING DIRECTOR, HOLLARD TRADE CREDIT
CREATING A ROBUST FRAMEWORK
As part of its innovations in the trade credit insurance space, Hollard Trade Credit is currently introducing a single policy that includes a trade credit and a contingency policy which gives its clients the opportunity to accumulate their own funds for risk management, allowing them to create an insurance pool rather than paying a third-party organisation.
Combined with the company’s current credit policy, clients still have
access to Hollard Trade Credit’s claims teams, lawyers, collection agents, resolutions, and much more – even for the risks that the company ultimately does not support.
“In this way, we can instil a great management philosophy to allow the customer to become self-insured,” Joubert shares.
As a result, the company can help build a robust framework within a business, stepping in to provide extra support only during peak exposure times.
GENERATING INDUSTRY CHANGE
Looking towards the future, Hollard Trade Credit is focusing on the diversification of its risk management pool to ensure that it continues to operate in a sector that generates change in SA.
One such area is the improvement of credit mismatching and the impacts this has on the country’s agriculture and food security.
For instance, farmers across SA operate on an annual income that can only be obtained during the harvest season. Therefore, to enable the farmer to pay for necessities such as fertilisers and appropriate inputs on a seasonal basis, Hollard Trade Credit provides support by taking on their credit risk for the year and, in turn, solving the credit mismatch.
Meanwhile, Hollard Trade Credit also strives to improve South African manufacturing by boosting domestic product capabilities so that the country’s industries don’t have to export materials to be made elsewhere.
“If we stimulate the domestic manufacturing industry, we can also create more job opportunities and help to solve the huge unemployment issues in SA,” Joubert impassions.
This further subscribes to Hollard Trade Credit’s philosophy of enabling clients to have a greater understanding and control of their insurance products, as Joubert endeavours to rewrite the reputation of the trade credit insurance sector.
Additionally, the company ensures that the products it delivers are in line with the client’s perception of what they’ve purchased and that each business is satisfied with the offering.
Therefore, Hollard Trade Credit’s comprehensive and thoughtful service offering, alongside its dedicated team, has cultivated exceptional customer retention over the past eight years.
A FAMILY CULTURE
Hollard Trade Credit has maintained its upward trajectory by emphasising a family culture in the workplace, which means that it fights for what matters.
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TAILORMADE COMMERCIAL CREDIT MANAGEMENT SOLUTIONS
“OUR JOB IS ABOUT ENSURING ACCESS TO SUSTAINABLE TRADE AND MAKING SURE WE ARE DOING THE RIGHT THING FOR OUR CLIENTS”
– GARETH JOUBERT, MANAGING DIRECTOR, HOLLARD TRADE CREDIT
“The reason I say we are like a family is because I want us to fight for our customers’ cause, consistently push the boundaries, and have difficult conversations about how to improve,” Joubert expresses.
The company’s culture also encourages making mistakes, viewing them as opportunities for learning and growth.
“Making mistakes also means you are constantly pushing the status quo and you cannot change the landscape without challenging the framework.”
Additionally, the Hollard Trade Credit team prioritises constantly assessing its work and unpacking its
methods of doing business so that it is in a constant state of improvement.
“Because I did not originally come from the industry, I don’t have blinkers on saying that this is exactly what trade credit insurance should be. I question everything, and that is also how my team operates,” Joubert affirms.
Another philosophy that he instils into the business is making sure the team enjoys their everyday activities and giving employees the opportunity to determine their career path.
“They tell me where they want to be and how they want to behave, and as long as that aligns with the business,
we can hire other people to do the tasks they don’t enjoy.”
This ensures that staff have the capacity and time to complete higherlevel tasks and conduct their role efficiently.
“My team and I fundamentally believe that trade credit insurance has an important role in stimulating the country, and if we do our job well, we can recover the South African economy to a point where it becomes an investment destination and a great place for future generations,” Joubert concludes.