Successful relationships are built on trust and solid advice
Not only is the risk universe constantly evolving, but it is getting more complex than ever.
According to the latest Santam In surance Barometer Report 2022/2023, the top risks identified by personal lines insurance brokers including load-shedding (71%), economic challenges (62%), societal issues (43%), political risk (29%), accidental loss/damage to home, vehicle and property (26%), unemployment (26%) and climate change (22%).
Commercial lines brokers have a similar view, also viewing load-shedding as the biggest risk at 57%, followed by motor vehicle theft or accident (28%), economic downturn (28%), climate change (24%), degradation of infrastructure (23%), theft (18%), political change/ social unrest (13%) and fire (11%).
In this environment, the role of the insurance broker is more critical than ever before to provide clients with advice on how to mitigate risks.
Karen Rimmer, head of Distribution: Insure at PSG, says the onus is on the broker to understand the specific and unique needs of each client and offer appropriate solutions.
“When necessary, they will reconsider their portfolios to ensure they have the necessary capacity to provide the required service to all clients.”
At the same time, she adds, they need to stay abreast of policy, industry and regulatory changes and ensure a good relationship with their product providers. This may lead to choosing preferred partners.
“Successful insurance brokers need to have a solid and trusted relationship with their clients. This requires they run their practices in a way that allows them to spend the majority of their time seeing clients, leaving their office staff to handle administration. Increasingly, successful brokers are acting as risk managers for their clients, rather than just selling a particular product. As insurers put more terms and conditions in place to limit losses, brokers have an important role in ensuring clients understand these conditions and uphold the requirements so that claims are not repudiated.”
In recent years there has been much attention given to the role of technology, artificial intelligence and insurtech, and the extent to which these new technologies will replace human brokers. Rimmer believes that while insurtech has a place, it’s not a serious threat to the role of the human broker. For brokers to remain relevant they must stay abreast of the rapid industry changes and adapt their operational model to remain profitable.
“All the different role players need to work together to ensure the success of the industry,” she says.
THE ONUS IS ON THE BROKER TO UNDERSTAND THE SPECIFIC NEEDS OF EACH CLIENT AND OFFER APPROPRIATE SOLUTIONS