Marsh ventures into agribusiness insurance

Isaac Pinielo | Monday February 2, 2015 12:40

A decade ago there were less than 20 insurance brokers in the country and the number has since doubled and the competition is the order of the day.

Raymond Matsake, divisional business development director said in an interview that due to intense competition, the company is looking into other prospects in order to enhance its growth and to further provide peace of mind to the agricultural industry.

“Through our Marsh South Africa skills, we will be able to introduce new initiatives such as agriculture insurance thus giving the farmers peace of mind,” he said.

Marsh’s agriculture practice provides risk management solutions based on in-depth knowledge of the risk exposures facing corporations in Africa – and around the world.

According to the company brochure, staying competitive in the dynamic world of agribusiness requires a risk management advisor with a sophisticated understanding of one’s business. “With continuous industry changes, there are new risks that need to be identified, quantified, and either retained or transferred,” it stated.

Matsake noted that Botswana is now a soft market due to competition, which compelled Marsh Botswana to renew at low rates to retain the business. He reiterated that the country is still not out of the woods yet from the recession and that most of the insurance clients are feeling the effects.

A soft insurance market, which is considered a normal part of the business cycle of insurance, is described as a period of time during which insurance companies assess low premiums and therefore achieve relatively low profits.

It occurs after companies begin to meet their profit goals and are able to loosen their underwriting standards, writing more policies on more clients.

Experts assert that it can be easy to obtain insurance during a soft insurance market. However, the possibility exists that insurers may write too many policies, taking losses or at least reducing profits.

Matsake pointed out that due to the situation expenses are usually under the radar, and that customers go for the cheapest quote. “We compete for business and most brokers reduce their margins just to retain the business, hence the word ‘soft market’,” he said.

Marsh Botswana was established in 1984 and is a subsidiary of Marsh & McLennan Companies, a world leader in delivering risk and insurance services and solutions. Marsh currently provides insurance brokerage and risk advisory services to over 70 percent mines across the globe.