The face of insurance and risk management is radically changing. The effects of globalisation have seeped into every corner of the market with a raft of legislation, technological, social, political and economic changes combining with an increasingly competitive environment.
It is into this tumultuous environment that Indwe Risk Services was created when in 2006 South African leading insurance brokerages – Thebe Risk Services and Prestasi Brokers decided to merge.
Thebe Risk Services was a business steeped in history and could trace its roots back to Hoskens Insurance which started out in 1903. In 1992, it became the insurance arm of Thebe Investment Corporation which was the country’s oldest black empowered financial institution, with a focus on the insurance needs of corporations.
Prestasi Brokers had formed in 1972 and quickly established a reputation for innovative short-term insurance products for both individuals and SMME customers. In 2001 Pamodzi Investment Holdings purchased a controlling stakes in the business which elevated it to full empowerment.
In 2006 Indwe therefore inherited a large book of existing business; however the fledgling company needed to establish its name quickly and look for new sources of revenue. Six years on (the company celebrated its sixth birthday at the start of July), under the astute leadership of founding CEO Giel Muller, the business is thriving, having continually refined its strategy over this period. During this period, Muller has introduced a novel and innovative approach to redefining the Indwe business model.
Peter Olyott Executive Head of Operations joined Indwe just over two years ago and is charged with the task of overseeing its 25 branches and taking the advisory business forward in terms of it’s chosen segments .: “We decided that we needed to identify specific sectors to concentrate the business on specialist knowledge and service offerings that would develop the commercial side of the business,” he recalls. His colleagues Joe Szemerei and Willers Baard are responsible for the Direct Call Centre based business and Administration business respectively and together the three business areas look to extract synergies between them as well as looking to further their own respective business interests.
“Today we provide professional risk advice solutions which include insurance products for individuals, small and medium sized businesses, corporations and state enterprises. Although making clear strides towards gaining a larger slice of the commercial and selected corporate market, Indwe has not abandoned its roots in personal insurance. With a greater emphasis on targeted segments, Indwe is making great strides in ensuring it becomes a competitor to be reckoned with in these chosen segments.
Privately-owned Indwe is headquartered in Johannesburg, and Olyott divides much of his time between this office and a major branch and broker support centre located in Pretoria. Overall the company operates 25 branches and has 600 employees.
“Our on the ground client servicing staff work in the branches but we also have a central technical resource centre run by staff with more experience and technical knowledge around specific sectors, these individuals provide a support service to the branches in a knowledge management system,” Olyott describes.
“We have diversified our portfolio and our commercial focus has predominately concentrated around five sectors: property (both residential and commercial), construction, manufacturing, retail and automotive and transportation. What we have found is that sector performance fluctuates on a cyclical basis, so we have invested training (since the merger) into specialist teams to add diversity and to spread our own risk. Indwe wasn’t previously represented in sectors such as aviation, marine construction and legal liabilities but these are developing areas that attract risk and we want to be able to capitalise on that opportunity,” he continues.
Olyott says that from launch the company initially went through a period of consolidation but that the past few years has seen an emphasis on growth as the book of clients changes; “We have developed our specialist areas as the competition has increased. Legislation has had a big part to play not only in terms of how we react to what is required of us, but it has also created new opportunities for us to consult, while technology and the business environment have also driven change.”
“We face an increasingly regulated environment, with the main areas being the Financial Advisory and Intermediary Services (FAIS) Act 2002, the Short Term Insurance Act 1998 and the influence of the Consumer Protection Act 2008. We have to be adaptable to changes in legislation and we have to optimise our business structure to be flexible and to ensure our branches react quickly to change.”
In such a highly regulated and competitive environment, staff skills are at a premium and Indwe has put in place training and procedures to ensure compliance and to develop specialist skills for its workforce, as Olyott explains:
“We provide different levels of learning styles and platforms including in the classroom and on computer systems, but much of the training is achieved as an integrated part of doing business. This helps our staff to achieve compliance; however compliance and competing are two different things so further individual training helps to develop knowledge in specialist areas.
“There is a general shortage of skills within our industry and the retention of our skilled and experienced staff is an important focus for us. Indwe has invested in a graduate internship programme and our people really contribute greatly to the company’s success. It is down to ensuring our staff are the best trained and have the best knowledge of the products and markets we operate within.”
According to Olyott, the market is very soft at present, which has led to lower rates and lower premiums. He says that it is a challenging commercial environment but that in itself opens up possibilities for new business models:
“We have changed the focus of our business and one of the main benefits of concentrating on specific industries and segments has been that we could optimise our marketing spend in a more targeted way.
“Overall we have approximately a 3 per cent market share but within the brokerage operations we are comfortably one of the top five companies in our peer group. Under the strategic leadership of CEO Giel Muller and the excellent support we receive from our colleagues in Finance, Information Systems, Human Capital and Client Experience, we are confident that we will make great strides over the next twelve to twenty four months and we will be looking at introducing additional sectors, channels and products to our range of services,” he concludes.