Over the past several years, our close collaboration with Herman Schoeman, retired Chief Executive at cell captive and alternative risk transfer solution leader at Guardrisk, and his team has been eye-opening and a great opportunity to learn from South Africa's pioneers in the affinity insurance space. Their successful and fast-paced drive towards a future for insurance is reshaping the industry. 

Herman is now leading Guardrisk’s initiative to substantially grow its affinity and embedded book of business by investing in leading technology and industry partnerships such as Root. We are thrilled that he and Guardrisk Executive Jacobus Claasen found the time to share their perspective on insurance innovation with cell captives in South Africa, a model worth considering in other parts of the world. Root Co-Founder Jonathan had the opportunity to ask some questions that shed light on the strategic partnership between Guardrisk and Root, revealing the initial motivations, key pain points addressed, and significant gains achieved. Definitely worth a read!

Q1 Jonathan: What motivated Guardrisk to initially partner with Root?

Herman: Guardrisk has always been known for its commitment to innovation and its forward-thinking approach in the insurance industry. When we started exploring the insurtech space, Root quickly caught our attention. At that time, our parent company had just made a strategic investment in a dedicated venture capital fund, which facilitated an introduction to Root. We were impressed by the strong existing relationships, especially with Jonathan. After meeting with the founders, we recognised the immense potential for collaboration. What stood out to us was Root’s drive for innovation, their focus on delivering low-cost insurance software as a service, and the high ethical standards and quality of the team. Moreover, their track record in the fintech startup space was compelling. We identified a pressing need among our retail clients for a more efficient insurance administration platform, and Root was the perfect partner to address that need.

Jacobus: Guardrisk recognised a significant gap in the market—our clients needed access to a modern insurance system that could be delivered via a software-as-a-service (SaaS) model. The legacy systems most large clients were using were simply not equipped to handle modern insurance products, which was creating a barrier to agility and growth. By partnering with Root, we saw that we could provide our clients with a customisable, scalable solution that would not only enable them to continue growing but would also drive growth for Guardrisk as the cell captive insurer managing the licence underwriting the insurance products.

Q2 Jonathan: How has this partnership evolved over time? Has it met your expectations? What has surprised you?

Herman: The partnership with Root has evolved significantly and has exceeded our expectations in many ways. Initially, we viewed Root as a part of our investment portfolio, but as the relationship deepened, it transformed into a key partnership. Root quickly became our preferred service provider for a substantial part of our affinity and embedded insurance business. This evolution speaks to the trust we’ve built and the value they’ve brought to the table. I’ve even joined their advisory board, which is a testament to the strength of our collaboration. What surprised me most was Root’s perseverance and adaptability, particularly in navigating the complexities of working with large corporate retailers. Despite the challenges, Root has emerged as a leader among insurtech startups, particularly in the rapidly growing embedded insurance space.

Jacobus: Guardrisk played a crucial role in Root’s initial growth by providing access to our extensive client base. We were pleasantly surprised by how quickly large clients with significant legacy tech adopted Root’s platform. The demand for modern insurance systems—those that don’t require significant development costs and can be implemented quickly—was greater than we anticipated. This rapid adoption not only validated our decision to partner with Root but also highlighted the urgent need for innovation in the insurance industry.

Q3 Jonathan: Can you share some of the most significant challenges that Root has helped Guardrisk address since the beginning of your collaboration?

Herman: Root has been instrumental in helping Guardrisk maintain and strengthen our market leadership in South Africa. One of the key challenges they’ve addressed is improving the quality of data we receive from our cell clients. This has significantly reduced the administrative burden on our clients, allowing them to focus on rolling out new products more quickly. In essence, Root has enabled us to better serve our clients by making their operations more efficient and data-driven.

Jacobus: Root’s platform has allowed Guardrisk clients to launch products that would have been impossible to manage with their previous legacy systems. The ability to facilitate omni-channel distribution and offer customisable insurance products at the individual policyholder level without requiring substantial IT investments has been a game-changer. Additionally, Root’s system provides on-demand access to rich, detailed data, which has enhanced data-driven decision-making for both Guardrisk and our clients. This has accelerated the development and iteration of insurance products, allowing us to stay ahead in a competitive market.

Q4 Jonathan: How has the integration of innovative solutions like the Carsure WhatsApp insurance chatbot impacted Guardrisk’s operations and customer engagement?

Herman: The Carsure WhatsApp insurance chatbot was a groundbreaking initiative, marking the first time a South African insurer launched a fully-fledged insurance product end-to-end using Root’s chatbot technology. This innovation has bolstered Guardrisk’s reputation for embracing cutting-edge solutions and has positioned us as a leader in the market. This project has also reinforced our culture of innovation, demonstrating our commitment to delivering customer-centric solutions that leverage the latest technology.

Jacobus: The Root platform’s flexibility, particularly its API integration capabilities, has allowed us to customise both the corporate customer and end-policyholder experience. This has enabled our clients to tailor engagement mechanisms to meet specific business needs, ensuring a seamless and engaging user experience. The ability to adapt and integrate with client-specific front-end and middleware systems has been critical in delivering a solution that meets the unique requirements of each client.

Q5 Jonathan: What future trends in the affinity insurance space do you see Guardrisk and Root pioneering together?

Herman: We see the future of affinity insurance evolving towards more integrated forms of embedded insurance. Root is a key component of our strategy to capitalise on this global trend. Their platform’s ability to help clients launch products rapidly and efficiently is essential as we continue to innovate and expand our offerings. Root’s support aligns perfectly with Guardrisk’s culture of innovation, and we anticipate that our partnership will play a significant role in shaping the future of embedded insurance.

Jacobus: Another trend we’re focusing on is the move towards omni-channel distribution. Root’s platform enables policyholders to interact with their insurance providers through their preferred channels, whether that’s online, via mobile, other digital touchpoints or in store. This flexibility is increasingly important as customers demand more convenient and accessible ways to manage their insurance. By making it simple for corporate customers to integrate front-end systems with Root’s administration platform, we’re able to offer a truly customised experience that meets the demands of modern thinking retailers and their policyholders.

Q6 Jonathan: How has Root helped Guardrisk streamline and improve its operational, oversight and compliance processes for its clients/cell owners?

Herman:  This partnership with Root has grown organically over time, evolving from a simple collaboration into a cornerstone of our operational strategy. Root’s platform has been instrumental in streamlining our clients’ operations by automating and simplifying administrative tasks, which has drastically reduced the time and resources needed for day-to-day management. The platform’s ability to enhance the quality and accessibility of data has been a game-changer, providing real-time insights that support more informed decision-making and faster product development cycles. This efficiency has enabled our clients to bring new products to market at an unprecedented speed, allowing them to stay competitive in a rapidly changing industry. Additionally, by improving operational oversight and compliance, Root has reinforced Guardrisk's reputation as an innovative leader in the insurance sector, ensuring that we continue to deliver value and maintain the trust of our clients and stakeholders. We are looking forward to future growth!

Jacobus: Root has significantly enhanced our ability to manage data and compliance. The legacy systems our clients were using did not cater to the data requirements of modern insurance products, nor did they allow for on-demand access to critical information. Root’s platform provides richer data streams and better access to this data, which has improved our operational oversight and compliance processes. This has enabled us to offer more tailored and efficient services to our clients while ensuring that we remain compliant with regulatory requirements.

Many thanks for sharing your insights! 

Read Herman’s interview with Captive Review on the topic of using Insurtech to Develop Cell Captive Offerings.  

For further reading on the innovative strides being made in South Africa’s captive cells and the groundbreaking partnership between Guardrisk and Root, check out these articles: