With a passion for engineering, Mike Tandy (Managing Director) set out to create a business for the long term. Firedart’s numerous Compass Awards are a clear indication that he has been successful in his quest. In our Coffee with COVER series, sponsored by Global Choices, we spoke to Mike and George Parrott (Director) to get their views on the UMA market, economic pressure and doing business with a passion.
Tony: Please give us a brief background to the birth of Firedart?
Firedart was started in a small office in Benoni by Mike Tandy in May 2001, In 2002 Anthony Jones joined us in Cape Town and then in 2003 Francois Engels and Ian van Loggerenberg joined the team and helped in making the company the success it is today. Anthony and Francois both moved on in 2012 and Ian left in 2015. Andre Alberts joined us in November 2014 in Cape Town and George Parrott joined under secondment in April 2015 and Angie Randall joined us in Durban in May 2015.
Tony: What were your most memorable milestones since the beginning?
When Compass had their first “Night of the Stars” event and Firedart won the Passion Award, would be my first memorable milestone, there have been others i.e. winning the overall Compass award 9 times. Tony: How has the specialist insurance/ UMA segment changed since then? Initially UMAs were under the radar. The large insurance companies have taken notice of the UMAs since then and seen that niche markets can be underwritten profitably with the right specialist skills and a focus on service. The UMA space is also much more competitive with more and more players entering the fray. These are only two of the factors that have made the successful management of a UMA much more challenging than what we have previously encountered.
Tony: Has the new Binder Regulations made any difference to your business?
As a product provider it definitely has an impact on the way we do business. Management of expenses and fees has always been a focus of an UMA to stay relevant and be sustainable. Additional remuneration does put pressure on a UMA’s bottom line but we welcome the standardisation of this practice. We do see the consolidation of small to medium brokers in the market and this does affect our broker base and distribution channels. We welcome the strong influence of Treating Customers Fairly (TCF) as part of this legislation and do acknowledge that TCF is a shared responsibility between product suppliers and financial advisers.
Tony: What do you expect from the Engineering sector in 2016?
The economy is under pressure due to global pressures and our own local challenges and the construction and engineering sector is not escaping the impact of these trends. Our market is heavily influenced by the construction sector and the FNB/BER Building Confidence Index which, after losing 9 points in 2015Q3, regained some ground rising by 4 points to 48 in 2015Q4 and we appreciate the slight upward movement of the index right at the end of the year. We are positive for 2016 and focus our efforts on risk management, risk selection and service delivery to our brokers. The fact that we have a strong risk carrier in Compass Insurance with a Global Credit Rating of A+(ZA) with the outlook accorded as stable and the strong reinsurance back up means that we can confidently offer cover on strong insurance paper. We are also a level 3 contributor to B-BBEE.
Tony: If you were to give brokers three main points of advice, what would that be?
Provide your client with knowledgeable advice enhanced by excellent service and know what is on offer by financial service providers such as UMAs in the niche markets. If you, as a broker, provide good advice the client’s losses will be minimised when claims are submitted. Provide fast and efficient service to your client during points of interaction and you will prove yourself invaluable to the client and make it challenging for other brokers or direct insurers to get a foot in the door.
Tony: On a more personal note. Besides engineering matters, what do you guys read to relax?
Mike: I am not an avid reader but I do read when I travel (which is not often) currently I am reading the autobiography of Sir Alex Ferguson.
George: I read policy wordings… only kidding. I enjoy reading on my Kindle and will read anything from biographies, business literature to fiction. Currently I am reading Without Hesitation: The Odyssey of an American Warrior by H Shelton, R Levinson and M McConnell, a biography of General Hugh Shelton, war hero, former chairman of the Joint Chiefs of Staff on 9/11, and one of the most respected military leaders of our time.