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Monday, March 1, 1999
Stronger ties

Forbes Group says it has increased its investment in Guardrisk to 70%. Graeme Kerrigan, Forbes chief executive explained that the increased holding “was a logical move since we have a long and successful relationship with Guardrisk and believe in its future. Now, as the majority shareholder we are able to exercise greater influence on Guardrisk’s future direction and participate in its future growth.”
Forbes founded Guardrisk in 1993 as a joint venture with Guardian National Insurance and Glenrand MIB. It increased its holding by acquiring MIB’s 9% interest as well as the 10% held by Co-ordinated Network Investments (CNI). Forbes has also acquired a portion of Guardian National’s interest, so reducing that company’s shareholding to 30%.
Guardrisk pioneered the concept of cell-captive insurance in South Africa in 1993. MD Roger Voysey says that the emergence of cell-captives facilitated the material advantages of Owning a captive, formerly the preserve of very large corporations, to be available to many more companies. Cell captives allow shareholders to purchase an equity stake (or “cell”) in the promoting company, which undertakes the professional management of the cell including underwriting, reinsurance, claims management, investment and accounting.

“The risk written by each cell is limited to the solvency of that cell, while additional cell risk is covered by “stop loss” and “catastrophe reinsurance.”
The success of Guardrisk has led to the emergence of other cell captive companies both in South Africa and around the world with Guernsey, Bermuda and Cayman, being three of the popular locations for the world’s other leading cell captive insurers.
Mr Voysey adds, “The past year saw our premium income rise by 80% in 1998 to R841m with assets under management approaching R1 billion. Our client base also grew by 25% from 53 to 66 cells. But the competitive nature of the market meant that margins came under pressure.”
Chris Wakeham, deputy MD of Guardian National notes, “We have had a long and successful association with Price Forbes and CRM Risk Finance Consultants (both wholly- owned subsidiaries of Forbes) and with these changes, expect to strengthen this relationship in risk financing with both Forbes and Guardrisk.”
Graeme Kerrigan succeeds Chris Wakeham as chairman of Guardrisk with Andy Jack (MD of Guardian
National) appointed as Guardrisk’s deputy chairman. The existing management team remains in place and, over time, could be supplemented by certain transfers from CRM and Guardian National.

Copyright © Insurance Times and Investments® Vol:12.2 1st March, 1999
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