There is strength in numbers.

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What is the FSP Solutions business model?

We are match makers specialising in instant gratification. We

introduce groups of insurers to groups of intermediaries at the

click of a button. Our product offering is more comprehensive

than any other independent aggregator in the intermediated

space in South Africa. We are not an underwriting manager.

We partner with insurers and sell their product via their rating

engines at their scientifically calculated rates. We provide one

entry point for the intermediary to instantly access multiple

insurer offerings via our Internet based application, or our call

centre.

What dif ferentiates you from your competitors?

There have been numerous attempts to copy our model.

Still, our insurer partners write more policies through us than

anywhere else where their rates are up against anti-selection,

where that channel is not independent and objective. We do

not influence the sale. Each insurer stands on equal grounds,

the only dif ferentiator is each insurer’s individual rating

methodology, brand and product offering. In most cases we

do all the administration for policies written via our portal.

Our intermediaries have one port of call to assist with all the

administration.

It hasn’t been easy to establish this model?

We were probably ahead of the market when we started out

in 2003 and as a result it was difficult to partner with insurers

that had at that stage not really invested in scientific rating

engines. Back then, Portfolio Management was the flavour of

the month and we believed from the outset that those days

were numbered. We have done countless demonstrations for

insurers through the years. The hard slog has fortunately paid

off during the last couple of quarters.

What systems do you use?

We have developed our own Internet-based application and

are constantly enhancing the system. It is a paperless, voice

logged administration application. We outsource our claims

functionality to ECA (Electronic Claims Administration),

FINANCIAL AND ADVISORY NEWSnews

FAnews spoke to Pierre van Huyssteen,

Marketing Director of FSP Solutions, to

uncover the drivers behind their success.

Match makers -

CELEBRATING 40 PRODUCTS

IN SEVEN YEARS

Santam appreciates the value of all our intermediaries, especially when

they’re as innovative and passionate as we are. That is why it is such

a pleasure to work with FSP. We’re confident that because of their vision

and like-minded thinking, our relationship will go from strength to strength.

Albert Bergh

Commercial

Director

FSP Solutions

Pierre van Huyssteen (FSP), Retha Botha (FSP), Leon Oosthuizen (MiWay)

Lucas Bothma (FSP), Ingrid Boreham (Guardrisk), Albert Bergh (FSP)

Lucas Bothma (FSP), Rene Otto (MiWay), Retha Botha (FSP)

Lucas Bothma (FSP)

our preferred outsourced partner which has its own claims

application interfaced with ours. ECA currently manages

claims for Hollard, MiWay, New National and Santam.

Our IT and that of ECA is in-house and on hand for our

exclusivity.

What services do you offer to intermediaries?

We do partial or full life cycle administration and provide

the intermediary 24/7 access to policy data and the

system. The intermediary has one entry point to his entire

client base, irrespective of the insurer offering. We assist

with cancellation and client retention ratios and take care

of all fulfilment and general administration.

Why do insurers make use of the services of FSP

Solutions?

We are non-biased, independent and over time we have

proven that our business model adds additional value

to the existing value chain. We only deal with insurers

that have rating engines and the process is a simple

plug-and-play. We offer insurers innovation, integrity

and business intelligence.

And intermediaries?

In most cases we do everything for the intermediary,

besides sourcing the client. We are an independent,

objective intermediated aggregator that gives the

intermediary choice and access to the widest range

of product offerings at a click of the button, or a quick

call.

What is the way forward?

A couple of big players will have their rating engines on

towards the end of the year to complete our bouquet.

Some great system enhancements will be rolled out

during this year, and we are implementing ITC rating

scoring across the board. We look forward to increase

our broker and insurer policy

base exponentially.

Half AD

Lars Forssman (SCRM), Retha Botha (FSP), Steven Isaacs (Absa)Pierre van Huyssteen (FSP), Retha Botha (FSP), Lucas Bothma (FSP)

Technology and the web are only two of the factors

that will influence the impact of the direct insurer

on the corporate and commercial market currently

monopolised by the traditional broker. The SME broker

may find it more challenging to compete against the onslaught

of the direct market, and more dif ficult to counter it with the

inaccessibility of certain facilities and insurers, due to high

production requests.

Risk management

Risk management is also increasingly becoming the

responsibility of the broker and with current legislative changes

and the impact of global warming, fresh categories of risk to be

considered will definitely prompt a few insurers to expand their

product offering.

We have seen the launch of the Consumer Protection Act

(CPA) and there will unquestionably be a spin-off in the

commercial insurance environment. In partnering with a larger

commercial portal, brokers will be kept in the loop about

product enhancements and industry changes that influence

the market.

The right partners

FSP Commercial strongly believes in the potential of brokers

specialising in a certain market segment and being in the

position to give competitive, yet sustainable options to their

clients.

Although some UMAs still made underwriting losses, the

annual FSB report noted that the average niche insurer made a

substantial underwriting profit in comparison with those of the

traditional insurer. The key in the process is to select the correct

partners with a respectable track record and underwriting

margins. FSP Commercial currently deals with 26 partners,

varying from insurers specialising in most markets, to the

smaller UMAs that focus on a specific field in

Accessibility

The main benefit for a broker to partner with a facility like FSP

Commercial is the accessibility to a variety of facilities where

commercial lines can be placed, ranging from aviation and

marine to plant, all risk and travel insurance.

Premium pressures due to economic circumstances and the

underwriting cycle make it more dif ficult for a broker to deal

with only a small selection of product suppliers. With re-insurers’

underwriting results also under pressure in the local market,

there is also a need for placing collective policies. This might be

challenging as the required experience and agencies need to be

in place.

Win-win situations

Dealing with industry experts, whether specific insurers or

underwriters, provides precious knowledge and information on

certain lines where a broker might not feel comfortable with

placing the business on their individual capability. When placing

your clients via a group umbrella, it also provides you with the

benefit of enjoying first-class service with the peace of mind of

having a big brother to assist with rate negotiations and tiresome

claims situations.

The insurer or underwriter on the other hand, also has the benefit

of lowering their operational expenses as there is an economy

of scale saving with regards to marketing their product and

servicing brokers.

Uncertainty is a likely part of any sales process, so when times

get tough you have to equip yourself with the necessary tools

to advance your offering beyond those of your competitors. FSP

Commercial has developed a refined distribution system that will

supply brokers with unparalleled products and support.

Albert Bergh

Commercial Director

FSP Solutions

Commercial insurance: