Succeeding in a broker-driven market

Broker relationships are key to King Price growth strategy. By Rhett Finch, CFO and MD of broker business

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King Price is seeing significant growth in our corporate and commercial book, with more than R150 million in business signed during the 2019 year. The key to this growth is our focus on our broker channel. By emphasising value and service, and by showing our brokers the same dedication as our direct channel, we’ve grown our broker business to a half-billion Rand business in the past three years. Broker sales currently make up 30% of our business and we plan to increase this further.

We’ve targeted commercial insurance as a key growth segment as we look to continue our exponential rise in the local market. From a R100 million start-up in June 2012, we’d grown to a R3.3 billion business at the end of our 2018 financial year, contributed to, in no small way, by a year-on-year growth of 75% for the year.

In addition, our 15% shareholding by Germany-based global reinsurance giant Munich Re is a strategic reinsurance partnership which enables us to write bigger risks in the commercial space and gives our clients peace of mind that we’ll be able to pay any potential claims.

We select only reinsurers with strong credit ratings above A (determined by credit rating agencies) with similar jurisdictions in the case of foreign reinsurers. In an environment that’s seeing a dramatic increase in claims due to weather patterns and acts of nature, our reinsurance strategy mitigates the risk of potential catastrophic claims in this area.

Our message to our broker partners is clear: we’re a serious player in the corporate and commercial space. We’ve got the most favourable reinsurance terms in the market, which gives us the foundation we need to grow this side of our business quickly and sustainably. Another key differentiator that we’re looking to exploit is our agility. Thanks to our industry-leading ratings box, we’re able to make major underwriting decisions within as little as 24 to 48 hours.

We’re also quietly growing our business in niche segments like engineering, where a big part of our book is yellow metal; and agriculture, where we currently provide cover for assets and livestock. We also plan to start providing insurance products to the marine sector in 2019.