[ FSP licence no. 48214 ] PARTNER RISK Solutions (Pty) Ltd “PARTNER RISK” PARTNER RISK Solutions (Pty) Ltd Reg. no. 2016/544416/07 FSP 48214 Address: Tower 2 | 102 Rivonia road | Sandton | underwritten by Johannesburg | South Africa P.O. Box 78424 | Sandton | 2146 | South Africa Direct: +27 (0) 87 742 3036 Email: admin@partnerrisk.co.za 1
PARTNER RISK – Group structure (at 13 08 2019): ONE JOURNEY INVESTMENTS Individual staff Reg. 2014/173622/07 members 49% 51% PARTNER RISK Holdings Reg. 2014/165222/07 GUARDRISK GROUP 50% 74% 50% 26% PARTNER RISK PARTNER RISK PARTNER RISK Advisory Analytics Solutions* Reg. 2019/393406/07 Reg. 2017/171137/07 Reg. 2016/544416/07 * Underwriting Manager, FSP 48214
VISION To be the leading provider of Property insurance for good risks in the Mid-Market Mid-market = Businesses with combined Sum Insured between ZAR100m to R750m at their target location MISSION To partner with brokers in the target market we serve, to institute risk-managed solutions for clients who want sustainable businesses ETHOS Gareth Baines Managing Director PARTNER RISK Solutions (Pty) Ltd Responsible Reg. no. 2016/544416/07 | FSP 48214 Authorised Financial Services Provider Underwriting Managers for Guardrisk Insurance Company Ltd Direct: +27 (0) 11 87 742 3036 | Mobile: +27 (0) 83 443 1100 Reliable Email: garethb@partnerrisk.co.za Web-site: www.partnerrisk.co.za Trading address: 1 st floor | Tower 2 | 102 Rivonia road | Sandton 2146 | South Africa P.O. Box 78424 | Sandton | 2146 | South Africa Relevant Responsible Reliable Relevant 3
WHAT PRODUCT/MARKETS PRODUCTS - Property insurance (material damage/business interruption) Motor insurance (must be with Property insurance) Other solutions may be made available from PARTNER RISK where clients require them in their insurance programmes FOCUS ON - SIZE FOCUS: Clients between Sums Insured ZAR100m to ZAR750m (at target location) PARTICIPATION: 100% or lead share% (qualifies for PayBack bonus) Follow lines are accommodated (no PayBack bonus) GEOGRAPHY - South Africa 4
Payback appeals to good risks in Mid-Market in South Africa CORPORATE COMMERCIAL SEGMENT SEGMENT VOLUME 60m 750m 100m 3,000m Payback is designed for the MID-MARKET SUM INSURED
EXCLUDED MAIN OCCUPANCIES PARTNER RISK Solutions Main Economic Activities that are Excluded , and that require Special Acceptance (S/A): [ EFFECTIVE FOR COMMERCIAL INSURANCE POLICIES ATTACHING TO TREATY 1 JULY 2019 TO 30 JUNE 2020 ] EXCLUSIONS SPECIAL ACCEPTANCES 1 MINING 1 FOOD PREPARATION & PROCESSING: 2 TEXTILES Dairy 3 SAWMILLS Frozen 4 TIMBER Meat 5 PAPER manufacturing Fruit 6 PLASTICS extrusion Vegetables 7 MATTRESS factories 2 CHEMICALS & ALLIED PRODUCTS 8 EDIBLE OILS manufacturing 3 MULTI-OCCUPANCY INDUSTRIAL PARKS 9 PETROCHEMICALS 4 WAREHOUSING: 10 EXPLOSIVES manufacturing Cold Storage facilities 11 SMELTING 5 GOVERNMENT: 12 PAINT manufacturing Local Authorities 13 AGRICULTURE (excluding Dairy) State Owned Companies 14 FORESTRY 15 FISHING 16 LIVESTOCK farming 17 WOODWORKING 18 RUBBER 19 ENERGY RISKS 20 VARNISHES manufacturing 21 FISHING 22 POULTRY farming and processing 23 REFINING 24 METALS 25 FURNACE Note: 1. Excluded industries have been marked as 'RED' on the weblink 2. Referral industries/occupancies have been marked as 'AMBER' on the weblink 3. ALL risks with Target/Top Location Sum Insured(TLSI) greater than ZAR 750,000,000 excl VAT are automatic referrals to lead reinsurer 6
PARTNER RISK - RESOURCES TEAM: Gareth Baines - Director Lazaros Sibanda - Underwriter Janice Clayton - Underwriter Ruwaidah (Ru) Marian - Administration Manager Noel Rossouw - Claims Kalapana (K) Dullabh - Credit Controller POLICY SYSTEM: PARTNER RISK Analytics ( uses proprietary software, PSICLE ) ADMNISTRATION: MICROSOFT Office 365/Azure UNDERWRITING: UCF (proprietary methodology) AUTO-RATER: Under development CLAIMS MANAGEMENT: Low-frequency-High severity focus RISK SURVEYS & MITIGATION: PARTNER RISK Advisory ( JV with Riskonet (Pty) Ltd) MARKETING: www.partnerrisk.co.za DISTRIBUTION: BROKERS ONLY 7
PARTNER RISK Solutions (Pty ) Limited ORGANISATIONAL STRUCTURE (at 01 03 2019): - Gareth Baines (exec) Board of Directors - Fernando Patrizi (non-exec) - Richard Eales (non-exec) - Walter Cronje (Alt to R Eales) Managing Director - Gareth Baines (Key Individual) Underwriting management Insurance Administration General administration - Administration Manager - - Head: Technical Support: - Administration Manager – Operations: Mrs Ruwaidah Mrs Janice Clayton Insurance: Mr Noel Rossouw Marian - Senior Underwriter: - Credit Controller: Mr Lazaros Sibanda Mrs Kalpana Dullabh 8
How is PARTNER RISK different PARTNER RISK ticks the important boxes: • Fast turnaround on service (tools will enable speed to transaction) • Works hard to pay valid claims speedily • Good on relationships • PARTNER RISK has strong and respected industry partners • PARTNER RISK Value Proposition 1. Speed wins - Web links for risk appetite, used by brokers 2. Payback - see slides below 3. Risk Management - Dedicated survey/risk management capability 9
Risk Appetite – link Speed wins Risk Assessment Risk Rating - model Payback Annual Discretionary Threshold Claims ratio – link Risk management Surveys Risk Requirements Risk Recommendations 10
Risk Appetite – link Speed wins Risk Assessment Risk Rating - model Payback Annual Discretionary Threshold Claims ratio – link Risk management Surveys Risk Requirements Risk Recommendations 11
PAYBACK PARTNER RISK has exclusive rights to use the Payback undertaking in South Africa 12
Clients qualify for Payback If: PARTNER RISK leads the client’s insurance programme(s), or Writes them 100% 13
Threshold Claims Ratio (TCR) • The TCR for each client and the overall company TCR are central to the calculation of PBs • PBs are calculated with reference to TCRs, both at a client and the Payback portfolio level • The TCR calculations are determined actuarially, after making allowance for the non-claim components of the written premium, including the capital cost • The capital cost component is included as a % of regulatory class written premium. The cost is based on an estimate of the capital required to service the client’s policy(ies) under the SAM regulations • The capital cost is obtained by calculating Premium Risk, Catastrophe risk, Counterparty Default Risk and Operation Risk in line with the SAM regulatory specification. These are then aggregated using the SAM standard formula correlation structure between risks categories, then adjusted further for PARTNER RISK’s risk assessment 14
TCR calculation The TCR for each client is set based on the following relationship to 100% of annualised gross written premium: Where the broker inputs: • Premiums by regulatory class for all policies with a concurrent policy inception date • BC - commission% or annual fee amount • BF - Binder fee as a % of GWP (if applicable) • Selects the Industry group from a drop- down menu (Cap is adjusted for underwriter’s risk score for the main occupancy) Where the underwriter’s Administrator inputs: • IE - Relevant insurer expenses (e.g. corporate services, royalties) as a % of GWP • IM - Portfolio target margin as a % of GWP • UF - UMA fees as a % of GWP • RI XOL/CAT reinsurance cost as a % of GWP • LTP - Maximum LTP as a % of GWP (currently 2.5%) • Cap - Cost of allocated Insurer capital as % of GWP (adjusted for underwriters risk scoring) The TCR is included in the PARTNER RISK quote where lead terms are invited 15
PayBack - illustration LTP LTP … etc 1. PB payable LTP … etc STP STP STP 2. PB payable STP STP … etc DPB DPB DPB DPB DPB 3. PB payable 16
PayBack (PB) - description PARTNER RISK has exclusive rights to use Payback model: A component of the underwriting profit made by the PARTNER RISK PB portfolio of policies will be distributed annually to qualifying clients for the main purpose of investing in risk improvements. Amounts paid back to insured clients are similar to a performance or out-bonus The total PB pool is funded annually with a maximum of 5% of PARTNER RISK’s PB portfolio gross written premium (GWP) At an account level there are two parts that make up the PB payment to clients. Up to 2.5% of client premium is allocated to the long term pay back (LTP), and an additional 2.5% of client premium is available in the short term pay back(STP) STP and LTP amounts are calculated annually and paid annually (LTP after 3 years) to clients In addition, a discretionary pay back (DPB) amount, after allocations to LTP and STP, may be paid annually to selected clients as agreed with PARTNER RISK 17
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