Reg No: 2000/027673/06
A licensed Financial Services Provider
(No. 2092)
Short-term insurers,
long term partners.
Just as the clown fish and anemone look out for the interests of one another – Safire looks
out for you. These two organisms have a mutual and symbiotic relationship which relates to the
sense of loyalty and friendship that Safire strives to have with each of their clients. Energy and
commitment best describe Safire and the focus and drive that they have. These two organisms
have a lasting relationship and Safire hopes to share a relationship like this with you by being your
short-term insurers, long term partners.
www.safireinsurance.com
SAFIRE INSURANCE COMPANY LIMITED
OVER 25 YEARS OF PROVEN SUCCESS
A LONG-TERM HISTORY AND PROVEN TRACK RECORD
Safire was founded in 1987, when a group of farmers and timber-growers decided to act to curb the spiralling costs of insuring their timber. They created a unique
insurance co-operative to respond to the specific requirements of their niche market at a cost that was accessible to all. Initially called the Central Timber Fire Protection
Co-operative Limited (CTFP), it operated a scheme whereby members’ claims were settled from a central pool of reserves contributed by the members. A re-insurance
treaty was simultaneously established with underwriting syndicates at the renowned Lloyds of London, to cover the catastrophic portion of the risk.
In 1997, with the advent of the General Short Term (GST) programme, insurance cover was extended to include non-plantation short-term insurance to co-operative
members. The co-operative’s name was changed to South African Fire and General Protection Co-operative Limited.
SAFIRE TODAY
In November 2000, a momentous step was taken when the co-operative was granted an insurance licence by the Financial Services Board, and converted to a public
insurance company known as Safire Insurance Company Limited. The decision to transform the nature of the company was based on plans to expand the range of insurance
options available to clients, achieve better economies, and develop the company beyond the limitations of co-operative insurance. Despite this conversion, Safire
maintains its co-operative philosophies to this day, and its clients are still viewed as members of a self-insurance scheme. Safire practices a strict policy of selectivity,
choosing clients that are risk-averse and responsible. The company thus sustains a sizeable pool of resources from past profits and low claim levels, resulting in extremely
competitive premiums. Safire enjoys the dual support of re-insurance through renowned international underwriters, plus extensive reserves.
Today, Safire Insurance Company Limited is a leading short-term insurer offering a comprehensive range of insurance products, tailor-made to suit its
clients’ individual needs. Our product range includes: Commercial, Domestic, Agriculture, Transport and Guarantees. We also provide first and third party
cell captives as part of our Alternative Risk Transfer (ART) business.
Safire’s advertising campaign is based on the theme of symbiotic relationships where ‘partners’ from the animal kingdom make their relationship mutually
successful, in line with our slogan of “Short-term insurers, long term partners” and our strong commitment to environmental awareness and sensitivity.
Various relationships are featured in different adverts, including a bee collecting pollen and a sheepdog guiding a flock of sheep.
Based on the theme of “a helping hand” between partners, we have developed the concept of “five fingers” representing Safire’s five most significant
characteristics:
Fair and fast
No call centres
Access to decision makers
A proven track record
Expert advice
We have a flat management structure, with representatives who are accessible to anyone who needs them, and all queries and business matters are managed
effectively, efficiently and with a personal touch. Safire does not operate through call centres thus enabling brokers to deal with our staff who are directly
involved with a claim and or underwriting file. Safire does not handle direct business because we believe in the special value that a broker adds for their client.
INTERVIEW WITH PIERRE BEKKER, CHIEF EXECUTIVE OFFICER
PIERRE, HAVING STUDIED FORESTRY AND THEN COMMERCE, DID YOU PLAN TO BUILD A CAREER IN THE INSURANCE INDUSTRY?
Not at all...I grew up on a farm in the Eastern Transvaal and followed in my father’s footsteps with a view to returning to farming once I had finished studying a BSc Forestry at Stellenbosch
University. Then later, after completing a commerce degree, I planned to go into banking. However, when I saw the Safire Insurance co-operative business model (my father was a founding
member), I was blown away by the opportunities that it presented in terms of revolutionising insurance in this country. I was amazed that the co-operative model wasn’t more widely used – it
ensures that rather than prioritising the needs and demands of shareholders, Safire focuses on the needs and demands of its clients, who are actually its shareholders as members of the cooperative. It’s a huge transformation.
YOU HAVE BEEN WITH SAFIRE FOR A NUMBER OF YEARS, SEEING IT THROUGH THE CHANGEOVER FROM A CO-OPERATIVE TO A FULLY-FLEDGED INSURANCE COMPANY. HOW HAS THIS
GRADUAL TRANSFORMATION, FROM AGRICULTURAL CO-OPERATIVE TO INSURER, UNIQUELY POSITIONED IT IN THE AGRI INSURANCE MARKET?
Firstly, this transformation has not been gradual. Safire made a decision in early 1999 to convert from a co-operative to a fully fledged insurance company, a move that came about the following
year. We wanted to maintain the principles of the co-operative philosophy while broadening our product range to a wider market. Safire had offered plantation cover since our inception in 1987, but
this served a very small niche sector of the agri-market. These loyal clients understood co-operative insurance and the limitations thereof, namely that claim payments would be limited to the extent
of the co-operative’s pool of reserves – a situation that they were very comfortable with as they knew the high level of reserves available and our longstanding relationships with major international
re-insurers. In 1997 we started offering general short term insurance, namely general property and casualty insurance in the agricultural sector.
In the years since 2000 when we became an insurance company, we have broadened our scope well beyond the agricultural sector, while still growing and developing products to serve this, our
original marketplace, which is still very loyal to Safire. For example, at the end of last year we launched our dairy cover which offers a specially structured package for dairy farmers. We also have
crop insurance for sugar cane and macadamia farmers, in addition to our other comprehensive short term cover that includes commercial, domestic, transport, cell captive / ART (Alternative Risk
Transfer) and guarantee. We understand the farming way of life, and the majority (over 70%) of our original clients from our co-operative days are still with us today. We offer them stability and
have shown that we are there for the long haul. Also, we continue to develop products especially for this sector, and we offer hands-on expertise, employing people who know what they are talking
about and who the farmers can see understand their specific insurance needs.
WHAT ARE THE MOST SIGNIFICANT DEVELOPMENTS YOU HAVE WITNESSED IN THIS MARKET AND THE SOUTH AFRICAN AGRICULTURAL/FORESTRY INDUSTRIES MORE GENERALLY,
OVER THE PAST 15 YEARS?
The insurance and farming sectors have undergone massive transformation over the past 15 years. The insurance industry has rationalised so that there are a few large players, with many of the
smaller, familiar insurance names having disappeared at around the time we were being granted our licence. At this time we offered, on a small scale, a competitive range of products in a hard market
where prices for consumers had increased. We are not a general capacity provider but continue to offer specialised products to our niche sectors of the market. From the FSB’s perspective, granting
such a relatively small insurance company a licence was an endorsement of their confidence in Safire’s ability to offer a new angle for the industry.
IN SECTORS SUCH AS AGRICULTURAL AND COMMERCIAL INSURANCE, WHICH ARE DOMINATED BY LARGE INSURANCE COMPANIES, HAS SAFIRE HELD ITS OWN? HOW HAS IT MANAGED TO
MAINTAIN MARKET SHARE?
Safire has certainly held its own against larger players, although we are not a major threat to the larger companies because of our focus on niche sectors – we are not a general capacity provider and have no
plans to change our business model. We have grown because we prioritise personalising our relationships with our long-standing partners, which include our insured members, brokers and our re-insurers where
loyalty and support works both ways. This adds stability and confidence to an amazing partnership. One of our marketing message’s ‘five fingers’ is that we have no call centres, which is the way that the rest
of the market is moving – towards massive centralisation. The other ‘five fingers’ are also significant: we aim to always be ‘fair and fast’ in our dealings with clients; callers will always have access to decisionmakers – my door is always open for anyone who needs to talk to me; we have a proven track record dating back over 25 years, and we employ experts in their respective fields who can impart knowledgeable
advice to clients and brokers. We also constantly revise and develop products to serve our niche markets.
IT MUST BE EVEN MORE DIFFICULT TO HOLD ON TO MARKET SHARE WHEN BEING HIGHLY SELECTIVE ABOUT THE RISKS YOU UNDERWRITE. HAS THIS PAID OFF?
Our selective business model differentiates Safire from the general market and our niche approach has always worked for us through our focus on superior products specially developed for the benefit of our
selected clients. This adds to the loyal and long-term relationships that I speak of which is very different to the general market approach that suffers from a very high rate of policy churn.
TELL US ABOUT YOUR DECISION TO OPERATE THROUGH BROKERS ONLY.
Unlike the majority of insurance companies, our business comes from brokers only who ensure that all upfront queries and transfer of information is managed professionally and on a one-on-one basis with their
clients. This means that there is very little chance of post-event disputes over cover provided. Safire works together with its brokers for the good of our mutual clients – there is no conflict of interest. Our
focus is on Safire’s underwriting role – we are not in the mass market, we are in the market where one-on-one relationships matter. We are very selective about which brokers we deal with – we emphasise the
need for technical expertise to market our sophisticated products to our niche markets. Brokers assist us in ensuring that all concepts are understood by the client. Brokers are our partners and have a vital
role to play in expanding our market.
SAFIRE HAS A LARGE NUMBER OF CELL CAPTIVES. WILL THE BINDER REGULATIONS CHANGE THIS APPROACH IN ANY WAY?
Actually, Safire doesn’t have a large number of cell captives – once again, we are very selective about deciding who we offer this product, it’s not for the mass market. We look for partners that are ideologically
similar to us, that are looking to provide insurance products to the market in niche areas with the same level of sophistication and care that Safire does, to build the Safire brand. We have always operated in
ways that are compliant with the Binder Regulations, so we see this as having no effect on our cell captive offerings at all.
YOUR TAKE ON THE CURRENT STATE OF AGRICULTURE IN SOUTH AFRICA?
The current situation is challenging, there is no denying that. All parties MUST share a sense of the need for change and to take responsibility for this change. There are many problems (crime, inequality, labour,
labour costs, land reform, land use, imports, etc etc), that need to be addressed as all these issues cause conflict that results in an untenable situation for all. As mentioned earlier, at Safire we are aware of the
need for conflict resolution and try to help facilitate communication and create viable, long term solutions.
WHEN YOU’RE NOT OCCUPIED WITH THE BUSINESS OF RUNNING A NICHE INSURER, WHERE WOULD WE FIND YOU?
With the industry’s rationalisation, other insurance companies were pulling out of plantation insurance, which has a large catastrophic element of risk, and we were offering cover to only well
managed risks and had high limits of indemnity. Eventually Safire was the only one to offer plantation cover. Safire started out in an incredibly hard market preceding an exceedingly soft cycle.
In 2001, when Safire had just become an insurance company, we had the tragedy of 9/11, which saw the post-event hardening of the insurance market. We maintained our levels and didn’t take
advantage of the situation; we didn’t hike up our rates, so reducing premium volatility, and made our mark as a stable, responsible insurer, something our clients have never forgotten.
You would usually find me with my family, perhaps taking part in one of the many outdoor activities that we enjoy such as golf, fishing, paddling, running, cycling. I recently had a wonderful time at the
In terms of the agricultural sector, there have been vast changes through land reform etc, which has been a huge challenge for us in terms of our ethos of offering cover to well managed risk only as
there has been a deterioration in risk management - but we believe that we need to serve the transformation process. There has been a change from numerous smaller players in the forestry industry
and agriculture in general to a consolidation into larger players and hence a lesser number of potential clients requiring agricultural and plantation cover.
Commercial
Cordwalles Mudman Triathlon with the Safire Buddies, a sports development initiative that we sponsor, whereby pupils from an underprivileged school, Ashdown Primary, are partnered with pupils from the
affluent Cordwalles Primary School and trained to participate in various multi-sport events. To be able to make a difference in these youngsters’ lives is very special.
Domestic
HOW HAS SAFIRE ADAPTED TO THESE CHANGES THROUGH PRODUCTS AND/OR UNDERWRITING
APPROACH?
As mentioned, Safire has for many years been the only plantation insurer consistently serving this market.
We feel very responsible for the need to be able to offer cover to even high risk clients – a departure from
our original philosophy. We have worked towards finding innovative ways to provide cover to these risks
that we previously wouldn’t consider. We have moved from choosing our clients to seeing that we need to
find an insurance solution for certain high risk plantation clients that might be high risk through no fault
of their own (they might be located in high fire risk areas, or have risk management issues). We saw that
we couldn’t just walk away from the reality of this situation, so once again we reverted to using the cooperative model and differentiated between different levels of clients with three financially independent
pools of resources so that there is no cross-subsidisation between high risk and low risk clients.
In addition, we have become actively involved with incentivising and assisting certain clients in
remedying their high risk circumstances by doing research and then advising them on what steps to take
to improve their level of risk and so improve their premiums. Many have adhered to our recommendations.
Fires cross boundaries and fences, so this transformation is for the benefit of all. We are also involved in
community awareness projects for safe and sustainable harvesting of honey – a major cause of man-made
fires in outlying areas and plantations. Conflict resolution is a large part of defusing potentially high risk
situations – frequently between landowners and labourers and/or tenants – and is a major element of
our field extension services. This wider social awareness is part of doing business in South Africa today.
Agriculture
Transport
Guarantee
ART