[PPT] - PARTNER RISK Solutions (Pty) Ltd PARTNER RISK PARTNER RISK PowerPoint Presentation

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PARTNER RISK Solutions (Pty) Ltd “PARTNER RISK”

[ FSP licence no. 48214 ] underwritten by

PARTNER RISK Solutions (Pty) Ltd

Reg. no. 2016/544416/07

FSP 48214

Direct: +27 (0) 87 742 3036 Email: admin@partnerrisk.co.za

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PARTNER RISK – Group structure (at 13 08 2019):

Reg. 2016/544416/07

PARTNER RISK Advisory PARTNER RISK Holdings PARTNER RISK Solutions* ONE JOURNEY INVESTMENTS

Reg. 2014/173622/07
Reg. 2014/165222/07
Reg. 2017/171137/07

51% 74% 50%

* Underwriting Manager, FSP 48214 PARTNER RISK Analytics Individual staff members

49% GUARDRISK GROUP 26% 50%

Reg. 2019/393406/07

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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

Responsible Reliable Relevant

Gareth Baines Managing Director PARTNER RISK Solutions (Pty) Ltd

Reg. no. 2016/544416/07 | FSP 48214

Responsible Reliable Relevant

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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

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Payback is designed for the MID-MARKET

COMMERCIAL SEGMENT SUM INSURED CORPORATE SEGMENT VOLUME 100m 3,000m 750m 60m

Payback appeals to good risks in Mid-Market in South Africa

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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

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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

PARTNER RISK - RESOURCES

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Board of Directors

PARTNER RISK Solutions (Pty ) Limited

ORGANISATIONAL STRUCTURE (at 01 03 2019):

Gareth Baines (exec)
Fernando Patrizi (non-exec)
Richard Eales (non-exec)
Walter Cronje (Alt to R Eales)

Underwriting management Insurance Administration General administration Managing Director

Administration Manager –

Insurance: Mr Noel Rossouw

Gareth Baines (Key Individual)
Head: Technical Support:

Mrs Janice Clayton

Senior Underwriter:

Mr Lazaros Sibanda

Administration Manager -

Operations: Mrs Ruwaidah Marian

Credit Controller:

Mrs Kalpana Dullabh

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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

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Speed wins

Risk Appetite – link Risk Assessment Risk Rating - model Surveys Risk Requirements Risk Recommendations

Payback Risk management

Annual Discretionary Threshold Claims ratio – link

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Speed wins

Risk Appetite – link Risk Assessment Risk Rating - model Surveys Risk Requirements Risk Recommendations

Payback Risk management

Annual Discretionary Threshold Claims ratio – link

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PARTNER RISK has exclusive rights to use the Payback undertaking in South Africa

PAYBACK

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Clients qualify for Payback If: PARTNER RISK leads the client’s insurance programme(s), or Writes them 100%

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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

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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

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1. PB payable
2. PB payable
3. PB payable

…etc …etc …etc STP STP LTP LTP LTP STP STP STP DPB DPB DPB DPB DPB

PayBack - illustration

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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%

f 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

PayBack (PB) - description

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The PB pool is apportioned in 3 parts, the first is: 1. Long Term Payback (LTP) – each year this amount is calculated first. A fixed 2.5% of client GWP (LTP%) is available to clients (LTP pool). Only clients that don’t claim above their TCR will have a Surplus for the year and are allocated pay back(LTP Alloc). If the client’s 3-year cumulative Surplus is positive then a LTP amount is paid to the client (LTP payable) in year 3. The LTP payable is distributed irrespective of the overall profitability of the PARTNER RISK total portfolio

Calculated annually
Paid on a 3-year rolling basis
Paid within 4 months of un-interrupted cover for 36 months
Paid to client provided policy is in-force

PayBack - approach

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The second annual apportionment of the PB pool: 2. Short Term Payback (STP) – each year this amount is payable to those clients who beat their TCR (Surplus) for the year, provided the PARTNER RISK PB portfolio makes a profit as determined by the company Surplus of Target Claims Incurred over Actual Claims

Incurred. If a company Deficit is recorded then no STP is payable to clients for the year.

A maximum of 2.5% of client GWP (STP%) is available to clients (STP max)

Calculated annually
Paid within 4 months of un-interrupted cover for 12 months, provided the portfolio

makes a profit

Paid to client provided policy is in-force

PayBack - approach

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The third and final annual apportionment of the PB pool: 3. Discretionary Pay-Back (DPB) – An amount after allocations to LTP and STP which becomes available from the overall PB pool. If some clients claim more than their claims threshold, it is quite possible that an amount is left unallocated in the PB pool. This amount may be allocated across the broker portfolios based on relative growth(20%) and size(80%) of each portfolio. Distributions to clients within each broker portfolio are agreed with the respective broker e.g. clients which may have potential for becoming better risks may receive priority status. DPB may be paid if LTP and STP combined allocations are less than the overall PB pool for the underwriting year

Calculated annually
Paid within 4 months of un-interrupted cover for 12 months, provided the

portfolio makes a profit

Paid to client provided policy is in-force

PayBack - approach

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THANK YOU

PARTNER RISK Solutions (Pty) Ltd

Reg. no. 2016/544416/07

FSP 48214

Direct: +27 (0) 11 884 6782 Email: info@partnerrs.co.za