Dare to think differently: Eikos Group

The Eikos Group has dared to think a little differently and the approach has worked says Chairman Dr Tony Valsamakis.

By Ian Armitage

Dr Tony Valsamakis and his colleagues within the Eikos Group dare to think differently. They're shrewd, aware that you have to innovate, adopt new strategies and become more adept and resilient with changing market forces.

Tony is an internationally recognised risk management professional, with the reputation of being commercially innovative and technically astute.

He also has a knack of making the right choice.

"At Eikos we consider ourselves unique compared to our traditional counterparts we are distinctly different. We've a different structure, fresh approach, and we've a different scope of expertise and activity. We're in the business of risk, not necessarily the business of insurance; we've well-developed, defined identification and evaluation processes to cater for most event-type risks that corporates face. We consult, yet we're able to direct clients towards solutions and facilitate opportunities around clients' risk mitigation needs."

Areas of expertise include strategic, financial, actuarial, insurance, IT, treasury and market risk analysis, underwriting and process management, he says.

"All these skills are applied to our general client base, and we have a particular focus and a dominant position both in consulting and insurance contexts in the transportation sector.

"Our approach lends itself well to an association with a variety of players in the market – brokers, bankers and insurers."

According to Dr Valsamakis, Eikos is managed by a strong team of insurance and risk finance professionals with many years experience in the marine, transportation, risk management and insurance sector, both within South Africa and internationally.

"Each has established individual reputations of high regard in their areas of expertise," he says. "We're an independent group of companies involved in risk, the business of risk, and its assessment, measurement and, importantly, management. We call our approach IRIS – Integrated Risk and Insurance Strategies. IRIS uses models to accurately simulate outcomes which provide critical decision making tools for the insurance buyer in structuring and pricing risk."

Tony established the Eikos Group – whose name derives from an Ancient Greek word which roughly translates as 'all that is possible or probable' – in 1999 and he and his team have since been responsible for building a successful enterprise with clients around the world.

The group consists of three specialist units: Eikos Risk Capital, Eikos Risk Applications and Group Risk Management Services. Each is autonomous "but we're all conceptually fused together – a type of integrated diversity," he says.

Eikos Risk Capital provides specialised risk financing solutions – things like insurance architecture and structuring, related feasibility studies and modelling, risk assessments, and insurance price setting – to an international client base. It is one of the few independent specialist alternative risk transfer, retention strategy and risk finance companies in the field, Dr Valsamakis says, and it has pioneered insurance cell structures in South Africa and abroad and developed statistical software that allows clients to spread insurance costs across a group of companies, in a fair and objective manner.

Eikos Risk Applications is a leading marine insurance broker, specialising in transportation and logistics risk consulting. It manages one of the largest marine broking portfolios in South Africa and is widely recognised as a unique risk services provider.

Group Risk Management Services specialises in structuring and managing complex insurance programmes for large corporates. Clients include the Mutual Risk Group, which originates from the unbundling of the Barlows Group.

"We're certainly a unique proposition," Dr Valsamakis says.

And things are going well. "Absolutely - of course the macro economic situation comes into play. I guess in the future it depends on the world economic scenario. Against the backdrop of a structural change, around 2008 moving to 2012/13, and the problems associated with the decline of the world economies and the impact of this on our client base, we have been pretty pleased with the way we have performed. I think that there are underlying changes that are redefining how we move forward, specifically in Europe. In a way, on a macro level, we have to trade through a period of phenomenal change, real change as opposed to just vagaries of the cycle, which are more short-term. Of course, we face the same sort of cost and revenue pressure that any other company would face and in our case we have to be careful about making sure that we do not allow this trend to upset the equilibrium within our company."

And how would he like to see the business develop?

"A top priority now, as a Group, would be to increase the return to risk ratio. I guess it's about balancing adequate return for what we deliver, against costs, which are always under pressure. I would like to see the Group pursue a profitable efficiency for the benefit of our clients and getting to 'best of breed' status. Looking forward, I'm very keen to see our concept get some scaleability – our value proposition is clear-cut, succinct and has been very well received by corporate clients. It would be great to see us extend our influence and footprint."

Hugh Reimers is managing director of Eikos Risk Applications and he has similar growth ambitions.

"Eikos Risk Applications is the leading independent marine insurance brokerage in South Africa," he says. "Our clients range from large and small providers of supply chain services such as clearing and forwarding agents, warehousing and distribution operators etc., to large industrial manufacturing groups all the way down to the small importers and exporters. We handle goods being moved by any and all modes of shipment and ranging from raw materials to finished goods to perishable products such as fruit and HIV medication."

Eikos Risk Applications have focused strongly on developing products for the freight and transportation sector, which deal with the exposures affecting both the cargo owner and the service providers in the supply chain.

"We believe that we offer the most professional broking option in the country in terms of the level of skilled people that we have within our business," says Reimers. "We've carefully selected people of a high calibre who have a good understanding of the supply chain sector, marine insurance and risk finance, which is an important part of our value proposition. We believe that our differentiator is just that – primarily the level of skill that we have within our business compared to our competitors, supplemented by the systems that we have within our organisation and the relationships that we've developed with insurers who have grown with us in this sector and who have also developed a sound understanding of our strategy and target markets. These relationships and skill sets have enabled us to develop superior products with faster turnaround times, wider cover and competitive rating which ultimately brings tremendous benefit to the end user or consumer of our products, the cargo owner."

The advantage to the cargo owner of the freight forwarder facilitating his cargo insurance transaction is the convenience of dealing with one party for all of supply chain needs, including insurance.

"In terms of where we go as a company in the future, I think we're reaching a level of saturation that makes it difficult to continue growing at the same rate as we have until now. We therefore have to look at different ways to grow the business. I think what we've done quite well is to find a niche and have developed the people and products which have allowed us to dominate in that sector.

"There are other specialist areas of insurance out there that we could potentially look at. Obviously we want to keep doing what we're doing and there's still a fair amount of work to be done in our own space. Expanding our insurance offering direct to cargo owners is an area we want to focus a little bit more on, for instance. There will always be large corporates that won't want to place their insurances through a freight operator facility and that's the area that we really want to target. We firmly believe that we offer 'best of breed' marine and transportation insurance solutions to the cargo owner ultimately and our challenge right now is to be front of mind for anyone looking for these solutions, be it through their freight operator or direct if that is what the cargo owner prefers."

The growth bug has caught on with Group Risk Management Services as well.

Des Vernon, managing director, and director Louis Ferreira are certainly looking at it.

In their case, it is perhaps more challenging - Group Risk Management Services specialises in the structuring and management of complex insurance programmes for large corporates and deals with the risk financing and risk control requirements in these programmes.

"There are several ways we can grow," says Des Vernon. "For existing insurance pools, in addition to normal growth, it would be a case of finding new participants who share the same work ethics and subscribe to the same risk management principles. Secondly, we can create a replica of what already exists and form a new pool. Finally we can offer risk management services to clients outside of the existing pools. This is already being done. We join your team and we work with you as part of your risk management structures. We're not external consultants charging you enormous fees."

In a tough operating environment Group Risk Management Services has performed well.

"We deliver a unique service, through a really experienced team in a market where expertise is often lacking. We have a reputation for being reliable, trustworthy and innovative in the outcome and our response. We are able to tailor make our response to your needs rather than delivering something that is not required. I think also our personal relationships and knowledge of our clients' businesses adds to the success of our service delivery."

"By pooling your risks, the bigger you are the less the cost and the wider the covers can be," Mr Ferreira adds. "We have demonstrated repeatedly that the overall total cost of risk is probably between 15-30 percent cheaper than what you can achieve by unbundling it and standing alone for each of the participants."

These are exciting times for Eikos Group.

To learn more visit www.eikosgroup.com.

Image: Supplied

Copyright is owned by Africa Outlook and/or Outlook Publishing. All rights reserved.