RENASA'S CAPITALISATION AND REINSURANCE STRUCTURE

Renasa has an unrestricted short-term insurance license..

Under this license, Renasa writes a wide range of business classes incluing personal lines, commercial lines and a wide range of specialist classes.

During the 2008 year critical mass was achieved leading to Renasa’s first profits. This bolstered Renasa’s statutory solvency margin at 30 June 2008 to 51% (solvency margin on the international basis of 76%). The 2009 year marked the first year in which Renasa achieved an Underwriting Profit. The statutory solvency margin remained 51% at 30 June 2009.

Renasa is backed by a comprehensive reinsurance programme led by Munich Re.

Renasa's reinsurance programme, which employs, inter alia, quota share treaties, is led by Munich Re and Africa Re, with support by Swiss Re, Labuan Re and Flagstone Re. All Renasa’s reinsurers are, investemnt grade, “A” rated.

Upon renewal, Renasa's cession increased to 80%. More than half of the cession is now backed by the two largest reinsurance groups in the world and nearly 90% by "A" rated reinsurers. All of Renasa's reinsurers have investment grade ratings.

Uniquely, Renasa’s treaties have a three year term.

Commencing 1 July 2007 the term of Renasa’s treaties was extended to three years with all major reinsurers. This is the first occasion that treaties of such duration have been concluded in the South African Short-Term Insurance Market and represents the clearest endorsement of Renasa by its reinsurers. The treaties commit to Renasa the capital necessary to sponsor its growth targets.

Renasa has been rated BBB+ by Global Credit Rating Co. ("Global").

The combination of stronger reinsurance support and the recent recapitalisation significantly raises the quality of Renasa's paper. In Global's words, the BBB+ rating granted to Renasa "(which benchmarks Renasa against the best credit risks in the industry) is a testament to the remarkable change experienced by the company in the past two years, underpinned by the quality of the business model and management team."

RENASA'S OPERATING DIVISIONS AND PRODUCT OFFERINGS

Renasa's operations are conducted in three regional divisions:

• Central Region;
• Natal Region;
• Cape Region.

Each region has its own Regional Manager and mandates. Devolving authority to the regions in this manner brings about decentralisation of routine decision-making and a more efficient service level.

• Brokers/Administrators who distribute domestic and commercial lines through conventional delegations of authority granted to administrators and direct brokers;
• Portfolio Managers who underwrite select business through risk and reward sharing structures; and
• UMA's which underwrite spesialised single class business. These currently include:
  • Construction performance guarantees;
  • Contractors all-risks business; and
  • Marine classes.

Renasa's Product Range

In addition to conventional domestic cover and Multimark III-type commercial cover, Renasa offers products for specialist risk areas including:

• Property;
• Machinery breakdown;
• Contractors all-risks;
• Guarantees and Bonds;
• Marine;
• Agriculture ; and
• Products specifically developed for previously disadvantaged communities.