Consort Welcomes Lloyd’s Energy Facility to South Africa

By Andy Brown
Senior Underwriter at Consort

To coincide with a visit to Consort by our Lloyd’s Energy Facility underwriters in August, we arranged an inaugural Wine Estate day at Blaauwklippen Wine Estate in Stellenbosch. The day also provided an opportunity for our guests to meet with some of our Service Providers on both a national and local level.

Having gotten through some important business discussions early in the day transport was on hand to ferry our party of eleven to Blaauwklippen. Upon arrival we were met by one of the Ambassadors who introduced the day’s proceedings. 

Set amongst the most delightful scenery in the region and situated a short drive outside Stellenbosch, Blaauwklippen proved to be the ideal venue for our respective presentations. Luckily, the weather also played its hand in making the day a memorable one with clear blue skies, warm sunshine, and no wind.

Blaauwklippen is one of the Cape’s oldest farms, having been established in 1682. The first grapes were planted on the farm in 1688. An interesting piece if trivia is that Cecil John Rhodes acquired the farm in 1899 but his ownership only lasted for one day!

The first Zinfandel vines, a variety not widely planted in this region, were established in the vineyards in 1977 and the first Zinfandel wine was produced by the estate three years later. Blaauwklippen has continued to produce wine using the Zinfandel cultivar since that time and is the first winery outside of the USA to be recognised by the Zinfandel Advocates and Producers (ZAP).

The first item on the agenda was a Sabrage demonstration performed by our host Sheppard. This involves opening a champagne bottle with a sabre, a very handy skill to have if you left the opener at home! Needless to say, the event turned into a competition between England and South Africa to open the bottle with a single cut of the sabre. Fortunately, the score was a one all draw without any blood being shed.

A tour of the cellars followed during which we were taken through the winemaking process from the time that the grapes are picked, delivered to the cellar, and crushed, through the various fermentation stages and into the barrel maturation stage from where bottling is done. One thing that we all came to appreciate is the patience and expertise that goes into the production of fine wines. 

The cellars are located within the old buildings on the estate which provides a naturally temperature-controlled environment, unlike many modern cellars where temperature is controlled via automation. One can only wonder what the occupants of the slave quarters would have thought if they could have glimpsed the future and seen what now lies within those cold, dark walls today.

Once the cellar tour was complete, we transferred to a private tasting room where some of Blaauwklippen finest wines were tasted and described by the knowledgeable Sheppard. Clear leaders in the favourite stakes were the Red Zinfandel, the White Zinfandel (both flagship wines from this estate) and an interesting wine called “Before and After” which can be drunk either as an aperitif or as an after dinner “settler”. This proved so popular that several bottles were purchased at the end of the day although not all them made it back to the hotel in Cape Town as there was a serious “spillage” problem in the bus where thirst was clearly a problem.

A very interesting variety of cold platters, stylishly and thoughtfully prepared by the Blaauwklippen Restaurant, was served for lunch accompanied by some of the estate’s finest wines.

All in all, a great day was had by all with a lot of good humour, good food and fine wine. The day provided a very good platform for all present to network and socialise and to cement business relationships for the future.

Plant All Risks in South Africa

by James Bishop

Senior Underwriter at Consort

Plant All Risks insurance as we know it today started as an insurance product in the 1970’s in South Africa. This at the time was rather limited to the “Yellow Machine” only, i.e. Graders, Front-End Loaders, Cranes and the like. Cover was limited to own damage only and confined to the contract sites only where the works would be conducted and during the Period of Insurance.

The basis of cover was always on a New Replacement Value or Market Value basis of insurance. Plant All Risks underwriting can be relatively simple to underwrite and can create large incomes as well as large claims. Going rates were from 2.5% to 4.0% depending what plant items were insured.

Newly trained underwriters need to understand the impact of the plant all risks cover and terms of the different disciplines that these plant items are exposed to.

Through the years the Engineering Underwriter has experienced many problems with claims handling in respect of settlements. The application of average, incorrect values declared at inception have now resulted in many disputes. Many new entrants into the market create competition, resulting in the rates we see today, 0.75 %, and even lower!

One of the major problems has been the disclosure of Market or New Replacement Values to Underwriters at policy inception or at renewal. Unfortunately, there is no “guide” as per what can be used, as by the Motor Underwriters to establish the exact insured value to apply. Many suggestions have been made to try to overcome these problems by Underwriters, contacting the suppliers of plant equipment to establish the correct new replacement values. Other suggestions were made to apply a depreciation of 15% per annum to the New Replacement to obtain the acceptable Market Value at the date of cover required to hopefully eliminate average.

The Motor Underwriters writing ‘motor special’ types were under pressure and under attack by the Plant All Risks Underwriters which resulted in a significant book of business lost to the Engineering underwriters at undesirable terms which have not been profitable. Today we are seeing items like tipper trucks, heavy haulage vehicles, and the like now covered under the plant policies!

The other challenge the Plant All risks underwriters are experiencing, is being in competition with the fire and assets Underwriters. The fire Underwriters may offer the client fire and allied perils cover at 20% of the full comprehensive plant pricing, resulting in a loss of business to the plant insurer. The client is therefore not enjoying the cover he needs, i.e. tool of trade risks not insured under the assets.

Furthermore, all road risks, off site risks and public liability cover has slowly crept into the Plant All Risks cover at exceptionally high limits and low premiums just to increase income. Cover for windscreens has also been included at very high limits and low income and claims escalated tremendously. It was seen to be uneconomical to appoint loss adjustors to assess these losses which resulted in a ‘’soft claim’’ and paid with little or no negotiations.

The solution to try and make this specialist business more attractive and profitable is to be selective on acceptance, loss adjusting to be accurate and the bottom line premium commensurate to the risk, coupled with a very good understanding of the risks what the plant items will be exposed to, with adequate deductibles bearing in mind the repair cost and the imports of spares.

Consort Technical Underwriting Managers (Pty) Ltd (Reg No 1999/003909/07) is an Authorised Financial Services Provider (FSP No 2273), is FAIS complaint and is underwritten by Lombard Insurance Company Limited, an Authorised Financial Services Provider (FSP 1596) and Insurer conducting non-life insurance business.

CONSORT TECHNICAL UNDERWRITERS © 2021. All rights reserved.