Our client, an underwriting manager (UMA) in South Africa writing general personal and commercial insurance was having challenges with their solvency/ capital position given the new risk-based solvency regime for the South African long-term and short-term insurance industries. The UMA’s portfolio was well balanced and highly profitable with a traditional risk and catastrophe excess of loss protection. The challenge that our client had was that applying the new risk-based solvency calculation exposed the UMA to a huge capital shortfall in their cell captive which led to a massive capital charge from the cell captive insurer rendering the business uneconomic.
Maksure’s Structured Solution
Maksure structured a tailor made reinsurance solution for the UMA which integrated the existing risk and catastrophe excess of loss and a finite quota share structure. The finite quota share was crafted to provide capital relief. A huge swing sliding scale ensured that the UMA would be responsible for its own underwriting loss as well as “bank” the underwriting profits. ‘A’ rated reinsurers in the “equivalent jurisdictions” were utilised as they provided a lower credit risk capital charge.
By integrating our unique technical skills in risk financing and reinsurance as well as world class reinsurer relationships, Maksure Risk Solutions is able to deliver world class insurance and reinsurance solutions that are tailor made to solve individual client unique challenges.
For more information regarding our structured risk solutions, contact our Managing Director, Mr Simba Makwembere at +27 11 805 0086.
About Maksure Risk Solutions
Maksure Risk Solutions is an Afro-Global independent specialist insurance and reinsurance broker with business footprint in Africa, Asia, East & Western Europe, South America and the Caribbean. We provide innovative and tailor-made risk solutions in Insurance and Reinsurance as well as Risk Financing and Actuarial Consulting geared towards capital management and strengthening our client’s balance sheet. Maksure is also one of the major players in Captive Management (Establishment & Management) in South Africa, Mauritius, Bermuda and various other jurisdictions. We have access into the Lloyds of London with a deep understanding of African markets. Our global nature ensures that our clients access quality capacity as well as some of the world’s latest thinking and solutions.