A strategic choice for our future
In the ever-evolving insurance landscape, cyclical shifts between aggregation and intermediation are common. While many companies are drawn to aggregation, Lombard Insurance’s decision to “grow big by staying small” sets a powerful industry precedent, writes ANTOINETTE SHAND, Managing Director.
Lombard was founded on guarantee products, originating in the construction industry 35 years ago. Since then, we’ve diversified into multiple guarantee solutions, built long-lasting partnerships with ten underwriting management agencies (UMAs) and two divisions that develop specialist insurance solutions on our behalf.
Niche is nice – for a reason
Globally, there’s been significant growth from managing general agents (MGAs) – UMAs in South Africa – who utilise their specialisation, product flexibility, innovation and increasing focus on technology, data and analytics to drive growth. The United States MGA market shows a 20 per cent year-on-year growth with an estimated $102-billion in premiums in 2023 – reflecting a shift in insurer risk appetite and strategy.
We believe the South African market will follow this trend. While there has been some recovery, the physical risk space (motor, property and so forth) has faced significant challenges in recent years due to floods, riots, storms and fires. There appears to be a strategic shift by major incumbents towards diversification and the pursuit of returns from the specialist insurance market. UMAs account for an estimated R22-billion in gross written premiums (15–17 per cent of the short-term market), with specialist lines comprising 40–50 per cent of that value.
A look in the mirror
In an industry full of noise, rapid change and shifting customer needs, clarity of our unique market position is crucial. Last year, we made the difficult decision to sell our commercial motor and property division. This business represented a departure from our stated strategy that focused on specialist risk and partnership-driven growth.
Although self-reflection is challenging, by staying true to our values and leveraging our strengths, we have committed to an evolutionary journey to strengthen what we do best – building meaningful partnerships and delivering specialist insurance solutions through UMA partners who fit our criteria and align with our values.
Going global
Lombard gained a strategic shareholder last year – the Cert. Group, a global insurance licence platform holding four other international insurance licences. This relationship enables us to “grow big” without the burden of large corporate head office costs or a rigid global strategy. Aligning with this group provides a broad perspective and additional resources, even as our operations remain distinct.
In line with our commitment to “staying small”, Lombard’s highly successful Guarantee division will become an independent UMA and partner to Lombard. It will be part of the Credeq Group – a family of guarantee, credit insurance, fintech and financial risk businesses across Europe, the United Kingdom and Australia. Credeq SA will operate under and leverage off a global brand, but maintain regional independence.
A fine balance
Logic suggests that consolidation of businesses, systems and processes leads to better efficiencies. But are the economies of scale truly more effective?
One of the most compelling aspects of Lombard’s strategy is our emphasis on people who value influence over control. In a highly regulated environment where oversight and control are inherent, there is both an art and a science to achieving this balance. This doesn’t mean we don’t value better ways to manage efficiencies; our approach prioritises human connections over systems and processes, recognising that people prefer doing business with people.
Forging our future
“Partnership” is a buzzword tossed around like confetti. Many claim to embody this value, but true partnership is defined by authentic collaboration and practice. We don’t always get it right, but we can honestly say that our partners – people and businesses – are our reason for being.
As the industry steadily evolves, our commitment to this purpose and our strategy of “growing big by staying small” will serve as a guiding light.
Published in Business Day – Insure July 2025
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