The FIA & COVER Short Term Insurance Broking Summit took place on 17 March 2017. We had a full house of brokers (both FIA members and non-members) as well as other representatives from the short term insurance industry. Our thanks to all who attended on a rather inconvenient day, with many potential delegates realising that they could fit in a long weekend by taking leave on Monday the 20th.
We were really happy with the attendance and extremely pleased with the interaction that took place between brokers and sponsors in the adjoining networking area throughout the day. A special thanks to the seven insurer brands that went out of their way to design stands for the event: Auto & General, Discovery Insure, Hollard, Lombard Insurance, Mutual & Federal, Santam and Sasria SOC Limited. Thanks also to the team from FIA and Oakhurst Insurance who handled the Oakhurst registration desk on the day.
The FIA will soon distribute a full 'review' of the Summit; but until then have created the following brief synopsis based on the various 'Tweets" that we sent out on our Twitter account on the day. If you use Twitter don't forget to follow us on @FIA_ORG_ZA.
Master of Ceremonies for the day was Gerald van Wyk of Discovery Insure, who is also the current present of the Insurance Institute Gauteng (IIG). Gerald deserves applause for ensuring that the programme ran smoothly and that we remained 'on time' despite the programme getting underway a few minutes late.
He introduced FIA CEO Lizelle van der Merwe who took to the podium to welcome the intermediaries present to the Summit and thank the various pro-advice insurer sponsors for their support.
The programme got underway with a passionate presentation by Dr. Roelof Botha, whose task was to inform delegates of "the economic world they traded in". Although there were plenty of negatives during his talk he left the audience with an overall positive message, saying that SA had the economic base to do something meaningful about poverty- we just need to practice fiscal discipline. He also said that private public partnerships would be a great way to 'reinvent' the country's struggling municipalities. Other key points during his presentation were:
- SA has a growing middle class which is a a great driver for growth in intermediated financial products, with huge opportunities in motor;
- In the absence of major political upheaval the rand will remain stable through 2017;
- The insurance sector has shown resilience despite difficult macroeconomic conditions;
- The EU was 'captured' by the regulators and the resultant frustration amongst businesses was part of the reason for BREXIT; and
- Potential investors in SA want "evolutionary economic transformation" rather than "radical economic transformation" with the country having all the ingredients needed to outperform.
Liza Kok, Manager: Marketing and Communications at Aon South Africa, presented on marketing to consumers of the future. She said that millennials may not want a broker; but they do need a tour guide- they want problem solving rather than products! She also mentioned that future consumers want to know what you can do for them - and why it matters. They like brands that 'give back' through corporate social responsibility projects; prefer to engage with brands that are 'worldly'; and associate with people that are considered influencers.
Price and convenience are not enough for tomorrow's consumer - there is a move to community-driven social insurance. When Peter Koen took to the stage to present on 'connecting with the 21st Century consumer' he said that one had to think of the customer as the disruptor rather than technology... He added that the insurance sector has not yet faced its 'Uber' moment. Peter is the founder of pondo and was co-founder of InfoSlips.
The second session at #STIBS2017 was titled "positioning your brokerage in the world". Michael Duncan, MD of Marsh Africa said that short term brokers had to identify new income streams to circumvent current pressures - the challenge is to expand both product and service. He suggested that it was time for brokers to evolve from insurance broker to risk adviser by adding sustainable advice solutions to their offering. In addition he urged brokers to demonstrate added value whenever possible and refrain from making the mistake of ignoring the disruptors in the insurance market. Among his concerns were that brokers don't have enough clout at the regulators, especially given that brokers are the key link between insurer and policyholder.
Debbie Holroyd, COO at Scottfin insurance brokers challenges brokers at #STIBS2017 to find their true North; to measure success against a plan; and share the results with all staff. She said that the brokerage's culture needed to reflect services to the consumer and that one of the best ways to keep in touch with the practice was to "go to where the work happens".
The first panel discussion for the day was moderated by Seamus Casserly of firstEquity. He was joined on stage by Debbi Holroyd, Michael Duncan, Nicola Iozzo of Mont Blanc, and Warren Bolttler of Price Forbes. The panel was tasked with discussing 'building a profitable and sustainable practice' and the opening comment was that profit flowed from leveraging tech; empowering and respecting staff; and diversifying into new services and products. A sustainable brokerage had to focus on margin, customer attraction and customer retention as well as build defensive revenue streams. Other comments made by the panel include:
- There is a lack of consistency from one Africa market to the next, making it difficult for brokers to enter those markets - the SADC region needs to emulate the West African countries in so far consistency of regulation;
- Advice will be more important than execution in the future broking world - and customers will be different;
- The regulatory playing field is equal; but not every firm understands it - while brokers with cross border operations facing additional complexity; and
- The cost of compliance and regulatory complexity is a major issue for brokers.
Technology was under the spotlight in the final session of the day. Simon Carpenter, chief technology officer at SAP said that the biggest change for insurance was a shift from product-centric to consumer-centric - he urged delegates to turn to 'design thinking' in their respective businesses. "You need a strategy for the digital economy - the old way of having separate business and IT strategies is a thing of the past," he said. From an insurance perspective cheaper sensor technology has revolutionised what product suppliers can do with mobile data... Simon also mentioned that 'block chain' was in its infancy and that we could expect much more as the financial sector gets to grips with this technology.
Our keynote address was given by Prof. Nick Binedell who was enthusiastically welcomed to the podium. Nick said that the goal of business was to create value, while all stakeholders in South Africa should focus on creating shared prosperity! He added that it was difficult for consumers to understand value; and that this made it even more important for every broker to have a strategy in his or her practice. He suggested that brokers need a mirror to see the current situation and a map to navigate change.
Christine Rodrigues, a director at Norton Rose Fulbright, took the 'graveyard' shift to provided attendees with an update on regulation. We would like to thank Christine for agreeing to present on this difficult topic at such late notice.
The FIA would like to extend our appreciation to the leading brands that made the Summit possible.. Thanks to each of you for helping our members - South Africa's financial advisors and short term insurance brokers to challenge the 'status quo' and to build thriving 21st Century practices!