Stepping Up in the Year of Pandemic

A Q&A with MD of Compass Insure Paul Carragher

So…Hindsight 2020??

Exactly. I read in a meme somewhere: if you were asked in 2015, where you saw yourself in five years’ time – you would have got it wrong!

Plus, there’s the guessing game going forward. No one can predict the outcome. And because we simply don’t know, we think it’s important to keep the conversation going.

As a specialist insurer, your business model is an eco-system of specialist partners, brokers and policyholders. Where are you at with regard to the pandemic?

Our solvency is strong and we are financially sound…

Yes. The business model is an eco-system and this is our shared strength! As Compass Insure, we’ve been in good shape going into this. Our solvency is strong and we are financially sound – relatively well positioned to weather the storm. Being a wholly owned subsidiary of Hannover Re is also important because Hannover Re’s capital resources are geared to managing such extreme events.

But our job now is to look towards a cloudy horizon and figure out the best way to support everyone that our business touches, whether we face pandemic curves or stalled growth curves.

Championing the underwriting agency, insuretech and broker…

As a specialist insurer, we need to rally alongside underwriting agencies, insuretechs and brokers, who are mostly SME’s and entrepreneurs. Our role is to support their efforts to manage their businesses well and assist clients robustly in the midst of a storm. It is a complex and unsure environment to navigate.

We have laid strong foundations re: our business controls including prudence in risk management, access to capital and effective reinsurance management. We hope we can contribute to the stability of the sector and even, growth of our specialist business partners in the future.

What responses have you developed to manage the crisis?

We are a specialist insurance model. So we’ve developed custom responses for each of our insurance product offerings, on a client-by-client basis. This is a mix of relief mechanisms like, premium payment plans, risk adjusted premiums due to underlying risk exposure decreasing, and extended “Hold Covered” for policyholders with unpaid debit orders. We’ve seen a positive material impact for our clients and business partners.

Adapting is key. This means accessibility, diligent risk assessment and creating custom solutions. Specialist partners are focused heavily on underwriting quality and acute assistance of policyholders.

Sustainability for everyone in ‘the time of Corona’ is a balancing act and working together to course correct is part of the deal.

Are you expecting significant fall-out in the medium-term?

This is a chain of events that can’t be controlled. Our only option is balance.

It’s never an easy call. Especially as it’s a real possibility that even if the health crisis ends, policyholders will face further financial strain later in the year.

We think the real, on-the-ground impact is still ahead. For example: In one case, we’ve had a small group of sectional title properties where every single property owner was retrenched and defaulted on their levies, which ultimately led to them being unable to pay their insurance premiums. We hope it isn’t the case but think there may be that kind of economic fall-out ahead! That’s why we believe in real-time stewardship!

But business also continues as normal?

Prepped for Lockdown

The business is operating remotely to full capacity. On the lead of our Chairman, Compass Insure implemented the remote working model prior to the formal lockdown. This gave us time to adapt and made us much more effective when the hard lockdown arrived. Our specialist business partners are also fully operational in the remote model and brokers are adapting to digital contact with clients. We continue to assess and pay claims effectively. It’s been a remarkably quick and effortless transition to digital.

Niche underwriting management agency NatSure also came on board just as the pandemic broke in SA?

Just as the pandemic broke… And the good news is that the integration has been a revelation in smart working. Systems have been integrated remotely. Teams are working well through virtual interaction only – which speaks to the commitment and adaptability of both teams. But also attests to the value proposition of the Compass Insure platform.

An unexpected test in resilience

An unintended effect of the pandemic is that it has tested our models, financial strength, systems and processes and so far – we’ve passed well. This inspires confidence in our ability to bring on board new partners.

And there’s been some changes in the Compass Insure stable?

Kopano/Loom will be leaving the Compass Insure stable to partner with King Price Insurance – probably from the beginning of June 2020. Kopano/Loom will remain within the Lireas stable – a sister company within the Hannover Re Group Africa. We are also planning further changes in the Insuretech space, which will be announced shortly.

Our stable of Insuretechs has been successfully incubated over the past four years and each one has developed strong foundations to launch a broader product offering to the market. We feel this is a significant achievement. During the Covid-19 pandemic, their edge in delivering insurance solutions through a remote interface and the use of digital technology in the value chain, has been insightful. It has demonstrated the impact of insuretech-type offerings to the sector and re-affirmed the importance of investing in further tech-based opportunities.

And would you risk a glimpse ahead?

The New Now

In Germany, some leading business people are speaking of the ‘new now’. This is rather than the ‘new normal’. We like this! The world doesn’t yet know what the new normal looks like or how long it will last. And we can’t predict the variables. But we can stay in the present and focus on the facts. Every day is a new now – adapt, be flexible, embrace tech and focus on the horizon. I talked previously about the evolution of insurance over the next decade. But, we’ve all already had to adapt to some changes right now and it’s been good…

Given market uncertainties, we think stakeholders will naturally look to robust risk carriers with strong solvency and financial strength. I hope that Compass Insure meets that bill for specialist insurance partners in South Africa. We want to reflect the ‘quality’ and robustness that the market needs.