Zurich Risk Financing SA Limited (Zurich Risk Financing) is a primary level financing facility for South African-based commercial customers
who wish to manage their own risk
The company has a designated team in Johannesburg, but brokers and
customers can access the service through any Zurich office
Zurich Risk Financing is a wholly-owned subsidiary of Zurich Insurance
Company South Africa Limited and as such a member of the Zurich Financial
Services Group
The company also offers cell captive facilities to customers whose business model includes the selling of insurance products to their customer base in addition to their core product or service
Managing risk
Technology, the global village, increasing competition, the need to drive down
costs, the demand for customisation and freedom of choice. These are but some of
the factors that have changed the face of the short term insurance market, leading
to a growing trend for commercial customers to manage their own risk through
traditional means plus alternative risk financing solutions.
Directors and management
The Board comprises the following Directors: Guy Munnoch, Pieter Bezuidenhout, Christo Schmidt and Stefan Maeder who is responsible for
the day-to-day management of the company.
Operations
The management team operates from Johannesburg but brokers and customers can
access the service through any Zurich office.
Competitive advantage
Being a wholly owned subsidiary of Zurich Insurance Company, Zurich Risk
Financing is open to all brokers and consultants. Customers are able to control the
cost of risk through a primary policy, whilst enjoying the freedom to choose their
preferred broker or risk manager and determine for themselves the composition of
their risk programme.
Products
Rather than provide a "one-size-fits-all" product, Zurich Risk Financing offers
customised solutions structured according to the customer's risk profile, type of
business and financial circumstances.
For more information regarding the services offered by Zurich Risk Financing send an e-mail to
dewald.treurnicht@zurich.co.za
Relationship with Zurich Insurance Company
The risk financing facilities of Zurich Risk Financing complement the conventional
insurance products offered by Zurich Insurance Company. Both can be accessed via
any branch of Zurich.
Risk Financing - some easy answers
Q. What is risk financing?
A. Risk financing offers businesses an efficient and cost effective means of
managing their own risk by financing exposures from their own reserves, taking
away predictable rand-swapping losses before entering into traditional products. In
certain instances it can also offer them the facility for providing insurance products
to their customer base.
Q. How does this differ from banking?
A. Banking is a deposit-taking facility. All risk financing options are insurance
transactions involving the transfer of risk.
Q. Who can use Zurich Risk Financing?
A. Any medium or large sized business that effectively manages its own risk and
can demonstrate a positive premium balance over a period of three or more years
can take advantage of risk financing options.
Q. Is anyone precluded from using risk financing options?
A. Any business can avail itself of a primary policy. However, insurance companies,
insurance brokers and underwriting managers are precluded from owning a cell
captive in terms of the licence granted by the Registrar of Insurance.
Q. Are there minimum premium levels for risk financing?
A. The current entry level for a primary policy is an annual premium of R500, 000.
The minimum annual premium required to incept a cell captive is around R10 million.
As the cell captive involves a sectional title ownership of shares in Zurich Risk Financing’s insurance licence, some capitalisation is required. The amount of capital
depends on the type of business to be written by the cell captive, subject always to
legislated solvency levels.
Q. What is the pricing structure?
A. The fee charged for the use of Zurich Risk Financing's financing facilities varies
from customer to customer and risk to risk. Fees are charged on new annual
premium which reduces on a sliding scale as the premium increases, subject to a
minimum annual fee. Premium and reserves earn investment income and an
investment management fee is charged.
Q. What about commission or brokerage?
A. Maximum brokerage levels are governed by the Insurance Act. Zurich Risk
Financing encourages brokers to negotiate suitable levels of compensation with
their customers for additional services rendered as these vary from case to case.
