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BusinessDay www.businessday.co.za Wednesday 29 January 2025
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INSURANCE BROKERS Sponsored content
Equipping brokers with tools to navigate changing landscape •
As the industry evolves, the role of the broker becomes even more critical, writes Lynette Dicey
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mpowering brokers in an increasingly complex insurance environment where the risk landscape is changing rapidly has become a key challenge facing all insurance businesses. The two main factors driving the changing risk landscape are climate change and overstretched public infrastructure, says Fanus Coetzee, CEO of Santam Broker Solutions, a leading player in the short-term insurance sector. “The impacts of climate change have led to a rise in the frequency and severity of weather-related incidents, including floods, hailstorms and veldfires, significantly affecting urban areas. Concurrently, inadequate public infrastructure — such as poor drainage systems and limited firefighting capabilities — has exacerbated these risks, making it difficult for communities to recover from such events,” he says. Coupled with this is a fragile economic climate, characterised by high inflation and a weakened rand which has resulted in
Fanus Coetzee. increased claims inflation. “In this context, the insurance industry faces heightened reinsurance costs and a surge in crime, notably car theft and identity fraud,” says Coetzee, adding that these factors not only challenge insurers but also highlight the critical value of insurance as a protective measure for individuals and businesses alike. “To thrive in this environment, we must embrace innovation,” he says, pointing out product, distribution and process innovation are essential for unlocking opportunities in the changing landscape. As risks become more complex, Coetzee says Santam Broker Solutions is committed to equipping brokers with the necessary tools to navigate these changes effectively. The company has implemented several initiatives aimed at enhancing broker competence
including training and development focused on risk assessment, empowering brokers with the knowledge to understand and manage contemporary risks. Monthly newsletters provide brokers with valuable insights into current risks, keeping them informed and prepared, while webinars provide education on emerging risks and proactive management strategies. Brokers are also encouraged to adopt technology for proactive risk management, ensuring they can adapt swiftly to the evolving landscape. Brokers today face a myriad challenges, including technological disruption from insurtech companies and rising consumer expectations. Coetzee says to combat these challenges, Santam Broker Solutions is streamlining processes and leveraging technology to create an omnichannel experience for intermediaries, making it easier for them to engage with clients. Understanding that consumer needs are unique, Santam is empowering brokers with tools that allow for personalised product offerings. The recent implementation of geocoding is aimed at enhancing the business’ risk management capabilities, enabling better assessment and accumulation of reinsurance exposure. In addition, brokers are being included in discussions about underwriting requirements and market changes to ensure they are well-informed and equipped to manage client expectations.
The Santam Emerging Brokers Programme focuses on nurturing new talent within the industry, ensuring a pipeline of knowledgeable professionals who can effectively serve clients. To better support brokers, the business has enhanced its self-service functionalities to allow brokers to assist clients more efficiently while geocoding intelligence aids in precise risk assessments and enhances Santam’s ability to manage risks collectively.
TO REMAIN RELEVANT AMID EVOLVING RISKS, WE CONTINUALLY ADAPT OUR PRODUCT OFFERINGS USING GEOLOCATION DATA “To remain relevant amid evolving risks, we continually adapt our product offerings using geolocation data to tailor insurance products for specific risks, such as floods and storms; streamlining certain products to prevent underinsurance,
circulars to inform brokers of relevant regulatory changes and required actions. It collaborates closely with brokers to ensure they are aligned with compliance requirements, conducts onsite reviews and assessments to help brokers adhere to regulatory standards and has established a broker advisory forum to foster dialogue about compliance and regulatory matters, ensuring that brokers remain informed and engaged. Broker feedback has become an essential component of helping to shape Santam’s service offerings. “By holding regular broker advisory forums and experience surveys, we actively seek input from brokers, ensuring their needs are considered in product development and service enhancements,” says Coetzee. “We are committed to supporting brokers in navigating the complexities of risk management. By fostering collaboration, embracing innovation and prioritising education, Santam is well positioned to meet the challenges of the modern insurance environment.”
Despite facing economic challenges including high interest rates, inflation and more onerous reporting requirements, SA’s largest insurers have demonstrated resilience in the past year. To help insurance companies manage liquidity risks, the Prudential Authority is advocating for more robust stress-testing frameworks. As a Deloitte report points out: “Insurers are now being expected to develop comprehensive governance structures, more relevant measurement techniques and timely reporting mechanisms that bring liquidity risk management in line with regulatory global best practice.” The outlook adds that as climate catastrophes and economic inequality intensify, insurance businesses must transition from traditional risk aversion to proactive stakeholder value creation, leveraging their position to drive sustainable development. The Deloitte outlook says that many South African insurers face challenges with legacy products that increase costs and impede strategic initiatives. Successfully rationalising these products requires considering customer outcomes, regulatory compliance and actuarial
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Santam Heavy Haulage is the leading insurer of heavy commercial vehicles. We understand that truck drivers are the backbone of the trucking industry, and by the nature of the work they do, they work under unique physically demanding conditions, putting them at increased risk of a range of chronic health conditions, including diabetes and hypertension, and fatigue.
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To support their overall well-being, we continue to invest in road safety and truck driver wellness initiatives to educate truck drivers about the potential health risks associated with fatigue and poor health. Because we believe that a healthy and well-rested driver is a safe driver.
Alternatively, call 0860 000 628 or speak to your ȴnancial adviser.
For more information, please visit www. santam.co.za
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ˆ ˜ ˛ ˜ ˘ ˜ ˘ ˜ ˘ ˜ ˘ ˆ ˜ ˘ ˘ life insurer and controlling company for its group companies.
particularly in areas such as geyser coverage; adapting the claims process with adjustments to the power surge cover and claims process to help deter fraudulent claims; and managing premium increases by fine-tuning claims excesses to help keep premiums manageable for clients,” says Coetzee. The business recognises that its relationship with brokers is crucial in managing and mitigating risks. “Brokers are not just intermediaries; they are integral to effective risk management. As the industry evolves, the role of brokers in evaluating risks, advising clients and ensuring compliance with regulations becomes even more critical. In an industry where accountability is paramount, brokers must possess a thorough understanding of both client needs and insurer requirements. This evolving dynamic necessitates a proactive approach to risk evaluation and management, facilitated by technology and ongoing education,” he says. To help brokers navigate regulatory changes, the business issues operational
Showing resilience despite challenges
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/123RF — COPACOOL perspectives to ultimately enhance competitive advantage. Insurtechs are leveraging mobile and digital technologies to offer more affordable insurance solutions. While these offerings improve market penetration and cater to a techsavvy consumer, they also threaten the role of traditional insurance brokers. At the same time that insurers are grappling with an evolving risk landscape, they are also having to put more focus on compliance. SA’s greylisting by the Financial Action Task Force (FATF) has put the spotlight on the need for a far greater focus on compliance, including complying with Fica requirements.