What’s keeping Tjaart Esterhuyse awake at night? His team’s strategy for developing the business over the next three to five years. “The insurance market is facing some strong headwinds at the moment,” the Managing Director of RGA Reinsurance Company of South Africa (RGA South Africa) acknowledges.
There are pockets of opportunity, such as the millennial market, which he believes is “up for grabs”. Yet, of the avenues RGA has identified, none is more alluring than the so-called ‘middle market’. “We would like to be able to crack that big group of people who are not insured and show little interest in insurance,” he tells The CEO Magazine.
Converting the unconverted is no small task, but Tjaart believes the answer lies in partnering with industry disrupters. “We are backing a number of smaller players who have approached us with bright ideas about selling insurance through new mechanisms. Some are exploiting a niche opportunity, one we feel can hopefully be broadened to attract the middle markets,” he explains from his Cape Town office.
These smaller players also possess an agility that he thinks is sometimes lacking in their more established counterparts – and it’s this very nimbleness that he sees as a competitive advantage. “That’s how we feel we might be able to grow the business faster over the next three to five years,” he says.
Innovation has been a part of RGA’s DNA since its founding. To build on its legacy of innovation, the company launched a transformation engine, RGAX, in 2015, which forges partnerships with clients and entrepreneurs to address existing challenges, explore new opportunities and secure the future of insurance.
“Through RGAX, we are able to explore regional opportunities that accelerate the development of innovative new ideas,” Tjaart explains. “One example is Inclusivity Solutions, a company that designs and delivers digital insurance solutions. Through digital devices such as mobile phones, it allows users in emerging markets to sign up for policies on platforms familiar to them.
“RGA South Africa provided funding and start-up capital. We also helped develop the product and pricing, and opened up markets for Inclusivity Solutions throughout Africa.”
Headquartered in the US with operations around the globe, RGA is one of the world’s largest life and health reinsurance companies, with approximately €3.1 trillion of life reinsurance in force and assets of €64.9 billion as of 30 June 2019.
Key to the company’s strategy is expanding and strengthening its diversified global platform. RGA opened its South African office in 1998, and is the only global reinsurer in the market focused exclusively on the life and health segments.
Today, RGA South Africa is a full-service reinsurer offering lines of individual and group reinsurance, as well as a range of financial solutions. Strong local operations and deep client relationships have enabled RGA to deliver customised solutions and become an established market leader.
“We’ve always supported our clients in the standard ways reinsurance companies do, providing reinsurance capacity to help them offload extra risk. But we do it in a very engaging, partnership-minded way,” Tjaart says.
Instances include reviewing clients’ internal processes and advising on areas where efficiency and relevance could be increased. “We work to find opportunities across the whole chain to add value for our clients,” he explains.
Tjaart, a Fellow ofActuarial Society of South Africa (FASSA), recently celebrated his 10th anniversary at RGA South Africa, having previously held the position of Head of Group Risk Business at Metropolitan Life.
He joined RGA in 2008, during a climate of economic turbulence and a challenging time for the industry. Fortunately, his team was more than up for the task. “There was something to build and that appealed to my colleagues and me,” he explains.
With a small management team, “half of whom were brand new to the company and even to the reinsurance industry”, RGA South Africa set out to “show its clients that it had the expertise and the ability to give them what they needed”.
At the time, the company ranked fifth on an industry recognised global annual survey. The team set its sights on the top spot, with a goal of reaching it in three years. “We focused on ensuring we got in front of our clients, that we engaged with them, spoke to them and showcased our skills. We organised client seminars and workshops that allowed our clients to get to know us better,” Tjaart explains.
The strategy worked. In 2010, a year earlier than hoped, the survey named RGA number one in the region. It’s a position the company has held ever since. “That was a really big boost to our confidence in what we could accomplish. From then on, relentless client focus became ingrained in our DNA,” Tjaart says. “We give our clients what they need, when they need it, without compromising on quality.”
“We give our clients what they need, when they need it, without compromising on quality.”
Nine consecutive years in first place has resulted in more than an overflowing trophy cabinet. “The end goal wasn’t simply to be number one,” he says. “Obviously if you start to deliver to your clients what they need when they need it, they will trust you with more business.”
In order to handle this increased business in a more structured and efficient way, the team also focused on improving internal processes. “We needed to build a much stronger infrastructure internally to make sure that we could more effectively deliver results for our clients and accelerate business growth,” Tjaart says.
The results are in. In Tjaart’s tenure, RGA South Africa has seen its reinsurance market share grow from the low teens to more than 20%. Many of Tjaart’s proudest moments centre around the accomplishments of his staff.
“When you see one of your direct reports grow into their own position in such a beautiful way that you almost become superfluous to their daily work, it’s very satisfying,” he says.
Valuing and cultivating employee engagement is something common to all of RGA’s global offices. In fact, the firm made it to Forbes magazine’s 2018 World’s Best Employers list, ranking 97 out of the 500 companies listed.
“Our relentless client focus would be impossible if we had not fostered an enjoyable and rewarding work environment. If our employees are engaged and productive, they’ll give more than we ask of them because they want to, not because they have to,” he says.