In June 2022, Telesure Investment Holdings (TIH) announced the acquisition of Renasa Holdings Proprietary Limited, the holding company of Renasa Insurance Company Limited. (Broker’s Best Friend just got the capital needed for growth). The acquisition is now effective and all regulatory approvals have been granted.
Brief history of Renasa
Renasa was established in 1998 and wrote primarily liability classes when first established. Since its restructure commencing in 2003, it has been writing general commercial and personal lines business. After the restructure, when the company was acquired by a local consortium, there was precious little capital in the business and certainly not enough to launch direct marketing operations. Renasa elected to focus on the intermediated markets and channelled all its efforts into developing expertise in the off-platform segment of the market, with the ultimate objective of positioning its intermediaries to outcompete their competitors.
Says Jonathan Rosenberg, CEO of Renasa: “There are a few elements to how we went about achieving this. The first was decentralising the decision-making process. We established our branch networks, with local representation seen as important. We developed our branch network and brought our business to a position where it could deliver personal service locally, avoiding contact centres and using trained marketing underwriters. This included direct access by intermediaries to our management, me included. We were at our posts on duty, wherever we were, 24/7, 365.”
He went on to explain that accessibility to management and, finally, the approach of supervised independence were what permitted them to operate in that fashion. Over time, the “supervised independence” approach which they adopted improved as they advanced their infrastructure.
Growth and success
Since then, Renasa has become one of the fastest growing insurers in Africa. In fact, it was the fastest growing at a compound annual growth rate of 26% in the 13 years preceding the Covid-19 pandemic.
Renasa even dominated the FIA awards between 2017 and 2019. In 2017 it was insurer of the year for commercial and a finalist in personal lines. In 2018 it was insurer of the year in both the commercial and personal lines classes. In 2019, Renasa was insurer of the year in personal lines and a finalist in commercial lines. That cemented Renasa’s position in the independent broker segment of the market, rounded off the growth and made increased capital imperative.
Jonathan explains in respect of Renasa’s capital raising objective that, from as early as 2017, the primary motivation was to access institutional capital. He says, “At that stage we concluded that the combined effect of the massive growth that we had experienced, and the regulatory change, which was coming, both in terms of supervision and otherwise, would incept consolidation in the market. So, we foresaw that consolidation in both risk carrying and in intermediation.”
Renasa was at that stage knocking on the door of R2 billion in written premium, and now had to advance to the next level, competing on equal terms with the key players in their segment, as opposed to being an alternative to them. This required access to institutional capital, significant and substantial capital, befitting a company which was writing over R2 billion.
When asked why Telesure, Jonathan explains, “From our perspective, we saw the entrepreneurial way we approached our business as a key success factor, so it was important for us to identify that in whoever, for us, would be the most appropriate capital partner. In terms of Telesure particularly, their attributes were that they are highly capitalised and therefore institutional in stature. But while institutional in stature, they are very much an entrepreneurial organisation and privately held.
“So, the ethos which drives that business is very similar to that which prevails in ours – institutional in stature, but entrepreneurial in spirit. That is really what drove us in the direction of Telesure. Furthermore, Telesure does not operate in our segment, and they support our approach, so there is little overlap. Telesure also operates multiple licences, so it is part of the strategy for Renasa to continue as a separate licence. They have many independent businesses, and their approach is that the businesses operate independently, but benefit from shared knowledge.
“Finally, they are highly advanced from a technological point of view. We see further benefits for us in terms of that shared knowledge down the line. Those are, in essence, the reasons why we were attracted to Telesure. From their point of view, I believe it represents valid diversification for them and I think they identify in us some of the repetitive excellence that they aspire to.”
He adds that there were other options under consideration, but Telesure made the most sense. “It is a comfortable fit. There were many respected parties interested, all of stature and all highly regarded and for all of whom I have a healthy respect, but the best fit by no small margin was Telesure.”
Business as usual
The Renasa licence will continue, and the operations will continue unchanged. The management continues with an amplified management structure. According to Jonathan, there was too much to do, and they were not getting to everything, so before the acquisition they added quite significantly to their senior management infrastructure. They appointed five senior managers, most of whom have now been engaged for almost a year and one of whom is an Exco member. All are highly experienced people.
Jonathan confirms that he will continue as CEO, the Exco continues, the modus operandi remains the same, and that they will continue with the same personal service. “We are not going to replace that with any other method of operation. Certainly, we are not going to invoke the use of call centres to replace any of the services which our marketing underwriters deliver now, or our local representation,” he says. “We are going to continue as we have. It is going to be business as usual.”
Because Telesure does not operate in this market segment, there is nothing really to change about the way in which Renasa conducts business. It will be business as usual, but with the big difference of institutional capital backing, to the benefit of all stakeholders, which will position Renasa with the freedom to compete on level footing with the institutions operating in their segment.
“We are going to do more of the same, more of what we have done up until now,” says Jonathan. “We have already incepted the plan with the appointments of the executives that I mentioned. In terms of specific plans, we have some new branches in mind – where many others are centralising, we will continue to pursue the decentralised model. Of course, the world has moved on, it has changed a little, so now one can make better use of virtual regimes. We have appointed and are in the process of appointing for these new regions and you can expect our footprint to develop further.”
Looking ahead, Jonathan is excited about the future of Renasa and the new opportunities that lie ahead. “We are truly inspired to pursue the next leg of the journey. It is important for us to elevate our business into a one that is itself of institutional stature. We will consider that a big achievement for all of us, our intermediaries, and our staff. That is what the objective is.”