By: Thys Nieuwoudt, Head Southern Africa, Swiss Re
Reinsurance used to be about capacity: we insure the insurers. We used to be a small club of strongly capitalised companies with settled long term business, established processes and reliable networks.
We played a crucial but relatively comfortable risk management role in a robust financial system. It was a cosy world. Innovation happened at its own pace. While some of us may have dabbled in product development, in general we left the end-consumer to our insurance clients and focused on underwriting, catastrophe modelling or maximising the risk-return trade-off.
But that was then and this is now – Reinsurers have become part of a brave new world via a convergence of competitive and macroeconomic pressure – but most importantly, we are being challenged by the needs of a primary insurer who is constantly looking for competitive advantage, and who expects the reinsurer to do more than just play catch up.
A fire can financially ruin a business. Flames, smoke and the water used to extinguish the fire can severely damage buildings, plant, machinery and stock. Should a business not have sufficient fire insurance cover, it may not be in a position to rebuild or replace the assets lost to a fire event. In many instances, the company or manufacturing facility may be forced to close operations indefinitely or for a substantial period of time which could lead to further financial difficulties down the road.
Fire protection regulations, such as the requirement for the number of fire extinguishers, hose reels and hydrants, are defined by the National Buildings Regulations (NBR). Additional requirements may be for items such as spray booths or flammable liquid stores; the specific zoning requirements applied to commercial and industrial areas and the nature of the business.
As a major fire event can have far reaching implications for commercial and industrial enterprises, business owners are urged to identify what fire-prevention, early detection systems and firefighting capabilities are in place or risk the very real dangers of their business going up in smoke.