Spotlight on… Guardrisk

13 Jan 2023

Guardrisk is the leading provider of cell captive business and alternative risk transfer solutions in South Africa, and has in the last six years ventured into the General insurance business where underwriting profits have increased sustainably year-on-year. It has been a Genasys customer since 2014.

We sat down with Guardrisk’s Head of General Insurance, Mark Joubert, to find out more about the phenomenal success of the business to date, the challenges and opportunities that lie ahead, and his own personal highlights from his near 10 years in post.

Mark, thank you for taking some time out of your diary to sit down with us … can you kick things off by telling us a little bit more about Guardrisk?

Guardrisk was founded 30 years ago and for the first 20 years or so, it was purely a cell captive insurer. What that means is that we provide a vehicle through which companies can write their own insurance using our license in a ring-fenced cell captive. Then five years ago, we decided to start writing business for our own account as well, and set up Guardrisk General Insurance. This division is now a R4 billion premium division writing various commercial lines of business including property and various specialist lines. So we’ve effectively diversified the Guardrisk business now into two segments: Guardrisk General Insurance and the traditional cell captive business.

Could you tell us a little more about your journey with the business?

I joined Guardrisk nine years ago, working in the cell captive area until the launch of the general insurance business, where I moved across as deputy head of this new area. I’ve recently stepped into my old boss’s shoes so rather than directly managing every part of the general insurance business, my main focus is now on leading the business strategy. This includes looking at potential acquisitions and building relationships with brokers and partners, who obviously include Genasys. While day-to-day operations are managed by my team, if major decisions are needed on systems then I’m involved in the discussions.

Guardrisk seems to be a business that is always looking ahead at how you can fast-track transformation in the insurance sector. Weren’t you granted South Africa’s first microinsurance cell captive licence last year for example?

Yes, that’s right. There are a lot of barriers to entry in the insurance market so this is all about enabling and up-skilling entrepreneurs to launch innovative insurance products for dedicated segments and markets. Microinsurance is far less capital intensive and regulatory requirements are simplified. We get approached by a lot of companies with great ideas and great distribution. A good example is funeral cover. To give an example, we were recently approached by a small business who wanted to develop a funeral scheme with significant distribution opportunity. He had a wording but no system, no operation – we were able to help. It’s good to know that we have a system that can cater for this and can easily deliver a solution to these types of ideas and companies. We’re really invested in supporting small companies and are deploying a lot of capital to help empower this sector.

The Guardrisk microinsurance proposition sounds like it’s been a hugely significant milestone for you, but what other highlights stand out for you since joining the business?

When I started, our premium income was some R500 million with an underwriting profit of R20 million. By the end of this year, we’re set to close on R4 billion with an underwriting profit of R500 million so we’ve certainly experienced exponential growth. A lot of this has been via acquisitions, and one of my personal highlights would be bringing in four underwriting managers into Guardrisk that were previously in cell captives.

Looking ahead, what are the biggest challenges to the business in the next year or two?

Probably the biggest challenge we face is the natural response of the reinsurance market to the combined impact of COVID-19 business interruption claims, the 2021 riots and this year’s terrible floods in Natal. These events have cost billions and so reinsurers worldwide are increasing rates. Managing these increases, driven by events beyond our control, with our clients presents us with a tough job.

Another focus point for us is our commercial property book. We launched this in 2019, but then COVID-19 hit preventing us from getting in front of brokers for two years. We’re getting back out there now, however brokers have entrenched relationships with the larger insurance companies. We have noticed that by being more broker relationship-focused we can grow this commercial book and have seen success in this approach.

Do you think there is a balance to be struck between utilising technology and maintaining human relationships?

Building and maintaining personal relationships is integral to our approach, and part of that is using the right technology to help make our partners’ lives easier. Our broker portal, for example, allows brokers to monitor the status of a claim without having to contact one of our people. 

We’ve also given a lot of focus to the claims process, making sure we have the technology to deliver a streamlined process without losing the human touch. This certainly gives us an advantage.

Great tech can’t exist in the first place without great relationships. We recently moved our marine business onto the Genasys platform, and a few of the team joined us for a strategy session that turned into more of an internal operational discussion. It was great that Genasys was there to see where we’re trying to go as a business. Elsewhere, we’ve got a quite a complex large property portfolio and it’s a bit different to other property programmes – it’s not just a plug and play. When there are big challenges, I know I can pick up the phone and call Eugene or someone, and they’ll get it resolved.

Where do the opportunities lie going forward?

Probably the biggest thing is our broker portal, which we recently developed and released. It’s going to be a good enabler for many of our partners. And another is developing the capability to integrate broker systems into our Genasys system. It’s the direction that many of our partners are travelling in and will be really important in helping us to develop our commercial offering. There’s a balance to be struck between being able to control underwriting and claims, and giving brokers flexibility to be able to manage a certain level of claims. It all talks to this type of system integration and if they’re happy with the service, we’ll grow the business whilst retaining oversightsix

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