It has taken Emerald SA, a specialist division of Santam, only 23 years to build the largest and most successful corporate underwriting business in Africa. While the above-average market growth achieved over the past five years may appear to be remarkable, it is not astonishing, “given we work to an ethos of taking opportunities when they present themselves, regardless of the negative triggers in the environment,” says Emerald SA CEO Carla Jordan.
“It may be that on the back of the pandemic, riots, floods and high inflation, insurers have had no option but to push for increased rates and premiums, but we are cognisant of how much our corporate clients can and can’t absorb in terms of increases, and this is where we excel – in finding the balance between rising reinsurance costs and our clients’ changing needs.”
International reinsurers are concerned, and rightly so, given the impending threat of a complete collapse of South Africa’s national power grid. Yet, while not denying that the loadshedding regime rings alarm bells, Jordan says that this, again, presents opportunities for Emerald to deepen its penetration into Africa, particularly tapping into renewable energy programmes .
“Developments and status changes allow us to look for new ways to improve and grow the business and innovate products that respond to Africa’s challenges. For example, our response to COVID-19 was to pilot a policy that will allow clients to recoup costs, or the additional costs incurred by a business during a pandemic/epidemic crisis.”
When their new policy launches in August, it will be a first-to-market offering from Emerald: a fully customisable solution to protect companies against the catastrophic economic effects resulting from a pandemic/ epidemic crisis, such as business interruption and lost revenue – thereby future-proofing businesses against unknowns. “With some 200 epidemic outbreaks and five new diseases being revealed annually, there exists a very real threat to business resilience,” says Jordan. “With this policy, we will be able to structure, price and underwrite cover for our clients that align to their risk strategy, helping them to build financial security.”
This innovative product is demonstrative of the game-changer attitude that Emerald is renowned for. “By working with the extensive Sanlam Pan Africa network, we have a real advantage in that we have the ability to mobilise premiums from up to 36 African nations, which is critical to underwriting multiterritorial pan-African accounts,” says Jordan. Emerald’s business model is a high-premium, low-volume operation, Jordan confirms. “We have the ability to take substantial lead lines and utilise our broad facultative reinsurance relationships to place large capacity behind risks. While certain accounts have many complexities, this model allows us to punch well above our weight.”
It also helps that Emerald has the ability to underwrite risks outside South Africa using a Standard & Poor’s (S&P) AA rating, which is higher than SA’s current sovereign rating of BB-. This has been facilitated by Santam and Emerald entering into a credit wrap agreement with Swiss-based New Reinsurance Company Limited (NewRe), a subsidiary of Munich Re. While Emerald can estimate that it currently accounts for in excess of 30% of the SA corporate property market share, the African market presents a far more diverse range of industries. “Largely, we will continue to focus on mining, heavy industry, ports (both marine and air), telecoms, and the big-scale property market. And again, the renewable energy sector is exciting,” says Jordan. To do this effectively, Emerald will be partnering with local insurers and tapping into global conglomerates that have operations on the continent. “My message is that Emerald is strong, engaged, and delivers as a market differentiator,” Jordan concludes.
For corporate property and affiliated engineering risk solutions, visit santam.co.za/products/specialist/corporateproperty.
