who manage well over 100 bodies corporate in KZN.
The directors of the company, who are also partners of the accounting practise, believe in high ethical standards, professionalism and service delivery and are always seeking ways to offer the best possible package to Unlimited Townhouses and body corporate trustees. Although Captivestacts for numerous Insurance Companies, we have found three to be the most reputable, efficient and competitive. They are Santam, Corporate Sure and Commercial & Industrial Acceptances (CIA). However the best service and dependable claims settlements have come from Santam Limited where most of the body corporate business is underwritten. Close to one billion rands worth of buildings are insured by Santam with our portfolio and it is for this reason that Captivest has managed to maintain a zero premium increase for the past four years. In fact in some instances Captivest was able to negotiate a premium reduction based on the profitability of the portfolio regarding claims ratios. (Premiums collected in relation to claims paid out)
Another major advantage of keeping a large portfolio together under one roof is that it enables Captivest to leverage substantial clout and influence when it come to claims, especially where there are grey areas surrounding assessors reports to the company. In almost every case, Captivest has successfully managed to resolve disputed claims that have been honoured by Santam after qualified motivations and representations have been made. Captivest has also enjoyed an excellent and positive working relationship with Santam management and as one of the largest body corporate portfolios on their books, they go out of their way to assist us when assistance is required.
Unlimited Townhouses derives no remuneration from the fees earned from Insurance Companies as these are paid to Captivest to manage and administer the portfolio. We are however extremely grateful for the close and co-operate working relationship that has been developed over the years with the staff of Unlimited Townhouses as well as Basil and Sean Smit who have enormous experience in Body Corporate matters.
I would like to take this opportunity to present to you our approach regarding the provision of professional services to body corporate portfolios.
Captivest offers a professional one-stop service to body corporate trustees for the provision of short-term insurance cover as well as property risk management advice. In order to offer the most comprehensive and competitive service and rates, Captivest utilises the services of an experienced risk consultant who undertakes the survey of each body corporate and submits a report to both the body corporate trustees and managing agents. This report covers a full risk survey with recommendations as well as a Gross Current Replacement Cost Value for the property. The latter being essential in determining as accurately as possible, values for insurance purposes. Such an independent report detailing an analytical approach to determining valuations is of great assistance to trustees who presently are at risk should unsubstantiated values for replacement insurance purposes be inaccurate. The cost of this appointment is covered by Captivestsubject to certain conditions.
We live in changing and strenuous times where legislation is being updated and implemented at a fast pace. It is therefore important that trustees keep abreast of such changes that affect the Insurance industry and Captivest will therefore keep Unlimited Townhouses up to date on all aspects of legislation that has a bearing on trustees of body corporate.
Capivest , through its agencies in South Africa and International Underwriters, is able to offer a product to Unlimited Townhouses services that can be tailored for Bodies Corporate. It offers comprehensive life cover and funeral benefits at incredibly competitive rates for salaried staff (Caretakers, supervisors, night watchmen and cleaners.) It requires no medical underwriting and the premiums are largely tax deductible in the hands of the body corporate. Such a product would be of great value to trustees who are often burdened by financial assistance requests from aggrieved family members of employees.
Captivest also offers a full range of Assurance and Employee Benefit services and Healthcare medical schemes.
Captivest , through its association with Hills Howard, offers a wide range of audit, accounting and specialised tax-consulting services. Hills Howard is a member firm of RSM International, an association of worldwide independent accounting and consulting firms. RSM International is currently the seventh largest such firm in the world.
Short-Term Insurance/ Risk Management
Captivest when taking on an appointment for the first time, undertakes the following.
Evaluation of each body corporate in terms of its sustained insurability. Investigate claims history, risk assessment recommendations and the performance thereof, risk evaluation of each body corporate, submit recommendations and applicable costs thereof in the event of further cover required.
Investigate the market of credible and established local and Insurance Companies and International Underwriters with a view to consolidating the entire portfolio at one insurer. Negotiate extensions on the policy that would add value to the needs of the client as well as better manage the risk exposure of the client. (Value for money being the criteria.) Instead of having different policies with different insurers, we believe that everything should be under one roof allowing the underwriters to investigate certain extensions to the policy that are deemed necessary and appropriate that would benefit the client.
Establish an efficient claims and query procedure in order to assist Unlimited Townhouses to minimise their involvement and therefore their cost in insurance administration.
Conduct information sessions in conjunction with the insurer for body corporate trustees and later property owners regarding the most frequently asked questions concerning the short-term insurance industry as well as practical relevant issues that concern our clients. The purpose would be to raise awareness and assist the body corporate trustees to better understand the aspect of risk management and Insurers requirements and claim administration.
Ongoing service of clients, assisting body corporate trustees with their mandate to handle the insurance requirements of the body corporate.
When surveying a body corporate complex for Insurance purposes, it is important to consider the following.
The nature of a risk surveyors work is as follows:
- Obtain building plans of the complex as a starting and reference point.
- Measure up the buildings in order to verify that all structures are accurately shown and recorded.
Evaluate the type of building and report on the building structure, material used, plumbing, fire appliances, adverse features, geographical siting in terms of market class.
- Survey the risk aspects of fire and storm. (Perils)
- Establish the square meterage of buildings as well as other features. (Retaining walls, wall enclosures, outbuildings etc.)
- Take photos of adverse features.
- Comment on risk of insurability.
Determine , based on various methods, the replacement value of the buildings and in the event of existing values, give recommendations on values determined by him
Gross Current Replacement Value (Cost)
This value is the estimate of the cost of rebuilding or restoring the property including site improvements. For the purposes of replacement value, the model that is used is a rate per square meter. In determining the replacement value, factors that are taken into account are professional fees, demolition costs, rubble removal and clearance costs as well as escalation costs based on inflation.
Why the need for Accurate Replacement Valuations
It is important to note a recent comment by Neville Melville, adjudicator for the Institute of Bankers of Southern Africa, said that bank valuations should not be considered as entirely accurate for insurance purposes.
When insuring buildings against fire, wind, storm and hail as well as collateral damage from moving or flying objects, because the rate is relatively low in comparison with other sections of insurance, many people tend to oversee the importance of obtaining a replacement value that is analytically calculated. In many cases the annual inflationary increase is added onto the previous years value. This method or any other unsubstantiated method is extremely risky as the Body Corporate Trustees will be held liable if the insurer applies an average value to settle any claim and a substantial shortfall exists.
Purpose of obtaining an independent Report
In order to properly evaluate the portfolio of body corporate in terms of their risk management, we believe that such a survey report will enable us to properly structure a package with insurers that will best benefit the client. It will also serve as a source of reference in the event of claims and the handling thereof.
A qualified replacement valuation of the buildings will also allow the insurer to accurately apply a rate to the correct value thus alleviating the risk of underinsurance or the payment of extra premium from over-insurance that is of no use. The trustees will have the comfort that a qualified basis for valuation has been used for insurance purposes.
Trevor Howard was the senior partner of the Accounting and Audit Firm Hills Howard and brings to the team his considerable wealth of experience in business management, accounting and taxation matters. Trevor Howard is based in Durban and is responsible for our client relationship management in the greater Durban area.
Pierre Delvaux manages Hills Howard Zululand Management Consulting and has been involved in business management and financial planning services for the past nine years. Pierre Delvaux is responsible for the overall management and operation of the companys Empangeni operations and is based in Empangeni.
Mark Howard manages Captivest Wealth Management Services and Captivest Healthcare and has been involved in business management and financial planning services for the past ten years. Mark Howard is responsible for the management and operation of the companys Johannesburg and Durban operations and is based in Durban.
Prenell is the Durban consultant responsible for client service and liaison. Prenell and Mark work very closely with Body Corporate trustees where necessary and handles all client service matters concerning the short-term portfolio.
All claims submitted must be signed by the Trustees and the Unlimited Townhouses offices must be notified of the claim.
Captivest, assuring you of our best attention and continued committment at all times.