On June 1 1985 Auto & General Insurance was launched in the SA market. To give a timeline reference, elsewhere in the world in 1985, Mike Tyson made his professional debut, the Nintendo Game Consol and Tetris was launched and the first British cellphone call was made.
Auto & General has been a strong innovator over the past 24 years. Trevor Manuel once said that Auto & General understands the value of partnerships, commended it for its plain language and simple policies and said that it had a solid foundation. FW de Klerk said that it was ahead of the times. Even Nelson Mandela applauded Auto & General for being a pioneer in the short-term insurance industry, calling it a trendsetter and a valued friend.
Auto & General's holding company, Telesure Investment Holdings (Telesure), was created in 1998 to house the SA interests of Budget Holdings Limited. The group entered the UK market in 1993 and Australia in 1997.
Telesure CEO Leon Vermaak says that now Telesure operates short-term insurance underwriters such as Auto & General Insurance and Unity Insurance, insurance brokerages including Budget Insurance Brokers and 1st for Women Insurance Brokers; and two companies that are held directly by Budget Holdings UK - Dial Direct Insurance and direct life insurance provider 1Lifedirect.
Telesure has 600 000 policyholders, turnover of R4bn and last year had an underwriting profit of close to R700m.
"Telesure stands out with its multiple-channel, multiple-brand strategy approach. All the companies in the Telesure Group target different segments of the insuring public. It is geared to assess the needs of the market it services and provides products and distribution channels to best suit those needs," says Vermaak.
Four Telesure brands were ranked among the Top 10 most popular short-term insurance brands in SA in 2008 in the Sunday Times Ipsos Markinor Brand Survey.
In addition, Telesure is recognised as one of the most profitable short-term insurance groups in SA and has never made an underwriting loss in its 24-year history. No other insurance group can make such a claim, which is outstanding given the insurance industry's boom and bust underwriting cycles.
If the relationship with the AA is included (insurance sold by the AA is underwritten by Auto & General), Telesure has five of the Top 10 short-term brands.
Vermaak says that over the years, Telesure has introduced a number of firsts in SA. It brought out a service charter for its clients and brokers, in which Telesure takes real financial pain if certain service levels are not met. It also committed to plain English writing in all of its policy books.
Twenty four years ago, via the Auto & General brand, Telesure introduced paperless and telephonic insurance, and not long after, scientific risk rating and electronic underwriting. Telesure was also the first group to offer business insurance specially tailored for SMEs.
It pioneered on-line quotes and claims, 24-hours-a-day, with claim tracking capability as well as voice logging to keep records of contracts. It also pioneered the invention of the first self-arming car immobiliser and direct short-term insurance. It was the first to offer direct long-term insurance (1Lifedirect) with cover of more than R200 000.
It was the first to target the female market (1st for Women Insurance Brokers) and it started the first online aggregator site (hippo.co.za) in SA, learning from the experience of Budget UK's comparethemarket.com. Comparethemarket.com is the third-largest aggregator in the UK and is projected to generate 6,5m insurance quotes this year and sell just under 1m policies.
Telesure also launched affinity products with premium brands such as the AA, Clicks and Woolworths Financial Services. "Telesure sees its core market as the beer drinkers, or the mass market who historically had cross-subsidised the more affluent whisky drinkers. In other words, Telesure does not insure Lamborghini drivers and prefers to focus on the general motor population," says Vermaak.
Telesure's evolution from a simple mono-brand direct business began in the 1990s when it decided to embrace the broking fraternity and Auto & General started operating both direct and within the broking channel. Competition began to intensify in the SA market in 1998 and in the same year, a decision was made to launch Budget SA.
Synergy - Woolworths Financial Services and Auto & General have launched an affinity product
Budget took the position of "what you see is what you get". It launched as a simple, cost-effective, fuss-free insurance solution - "it's cheaper but it still does the job". The brand charges the SA public "low, low premiums" on their motor and household insurance. It also offers innovative value-added products such as funeral cover, personal accident cover, small damage cover and Exposure, which provides protection in the event of accidental exposure to HIV/Aids for the client and his or her family. Budget also offers Business Insurance for SMEs.
In 2003, Telesure launched sister company Dial Direct, an offshoot of Dial Direct in the UK, which is a strong performer. In August 2008, Dial Direct was named the most popular short-term insurance brand in SA in the Sunday Times Ipsos Markinor Brand Survey. The survey is the only research-based, consumer-driven guide to brand loyalty in SA.
At about the same time, Telesure realised that the number of women taking out their own insurance policies was increasing all the time and that there was a gap in the market to offer these women an insurance product that catered to their unique requirements. This revelation gave birth to 1st for Women in 2003. 1st for Women offers a discount on car insurance, affordable home contents and buildings insurance, and a host of free value-added products designed for women.
To ensure compliance with the insurance charter and to capitalise on opportunities within the lower LSM market, in 2005 Telesure launched Unity Insurance. This short-term domestic underwriter delivers specialist short-term insurance products that address the lifestyle needs of all South Africans.
In 2007 Prosper, a product of Unity Insurance, was launched. Prosper targets SA's emerging middle class and offers motor and household insurance products as well as a wide range of value-added products. It also has a product called Like New, which was designed to cover small scratches and dents that are not usually immediately covered by motor vehicle insurance.
In 2007, Telesure also launched hippo.co.za - SA's first insurance Internet aggregator site. It allows busy consumers to solicit the most competitive insurance quotes from a range of big-name insurance providers. With hippo.co.za consumers need only enter their details once, taking the burden of filling out reams of online forms off their shoulders. In a couple of minutes, hippo.co.za generates an insurance profile, shops around and delivers the top tailor-made solutions for comparison.
Vermaak says that Telesure has a customer-centric approach that delivers value at its core. "In today's highly competitive business climate, you have to deliver value because if your customers can't see the value of doing business with you, they will take their business elsewhere. This is especially important during tough economic conditions like we are experiencing now," he says.
Though attracting new business is vital for Telesure, it recognises that retaining customers is essential to its long-term growth and sustainability. "Telesure believes in finding a better way and is passionate about innovation. It is a progressive, forward-thinking and pioneering company that employs people who can challenge the mundane, are cutting-edge and revolutionary," says Vermaak.
In the future, he says, Telesure will concentrate on expanding its product range into different sectors that don't currently exist in the short-term insurance industry. It will also look at becoming a holistic financial services provider. "Telesure's business model has enjoyed phenomenal success in SA, the UK and Australia and can be replicated. As such, Telesure will consider additional geographies such as Africa and beyond," says Vermaak.
Telesure does realise that none of this could have been achieved without its people, so, to continue its success, being an employer of choice is nonnegotiable. " To create a workplace where people can excel and become an employer of choice, an open and transparent relationship with employees is essential. We want to create an environment where people feel a part of Telesure's vision for the future. This, ultimately, has an incredibly positive spin-off for customers," he says.
Has 600 000 policyholders
