South African insurer Youi will underwrite Blue Zebra’s personal lines as well as upcoming SME products after signing a five-year deal with the specialist agency.

Youi, which has not previously worked with underwriting agencies or brokers in Australia, says it hopes to expand its Australian presence, particularly in SME, through the agreement.

“Youi already has a growing SME book, [although] it is still quite small at the moment,” a spokesman told insuranceNEWS.com.au.

“We see this agreement as an opportunity to accelerate our growth in the SME market.”

Blue Zebra launched in 2018, aiming to bring personal lines back to brokers and using smart technology to increase efficiency.

It has grown rapidly, with more than 100,000 policyholders and writing $110 million in premium over the past year. It is now looking to move into SME, cyber, and commercial motor, and is considering expanding overseas.

Zurich backed the agency from its launch, but reassessed its involvement late last year after taking into consideration Blue Zebra’s expansion plans and its loss ratio.

The deal signed with Youi comes into effect on March 17, and follows a period of due diligence.

“Youi brings financial strength and stability, understanding of how to grow a challenger brand in the Australian market, significant pricing and claims expertise, and a customer-focused culture to the relationship,” a statement from the two companies says.

“Blue Zebra brings an attractive advice proposition, a powerful broker distribution network and world-class systems.”

Blue Zebra MD Colin Fagen says the relationship enables the agency to “continue to build our business and support the broking community in the Australian market for both personal lines and the soon to be launched SME products”.

Youi says the deal marks “a diversification of our distribution approach” and it doesn’t rule out other similar agreements.

“While our immediate focus is on embedding the relationship with Blue Zebra … we wouldn’t rule out exploring other relationships with underwriting agencies and others in the future.”

Youi is a subsidiary of South African-based OUTsurance International Holdings, which is in turn part of the Rand Merchant Insurance Holdings Group.