Expert advice is invaluable
Skilled brokers play vital role in helping clients understand risks, says Hollard
THE changing nature of risk is a phenomenon that businesses need to understand and take into account, in an environment in which skilled intermediaries have an increasingly pivotal role to play.
Furthermore, says Pierre Geyer, MD of the Hollard Select Broker and Underwriting Manager division of the Hollard Insurance Company: “Businesses by and large are underinsured. This is because they don’t necessarily understand the risks to which they are exposed, or don’t know what risks can be mitigated through insurance.
“Brokers can play a key role here by helping businesses to identify these risks. The nature of risk is changing, with cyber security, for one, rapidly becoming a major issue.”
Hollard are FIA award winners this year in the shortterm insurance personal lines and commercial categories.
Geyer says an increasingly important role is emerging for brokers in the commercial segment of the market.
A winning scenario for Hollard, he says, is one where brokers are able to offer risk management advice that ensures customers pay only for the cover that is needed, thereby improving both the sustainability of the commercial enterprise and the broker’s status as valued adviser. “Hollard benefits from the resulting customer loyalty.”
Geyer believes that the displacement of brokers from the personal lines segment into the commercial space will be a notable feature of the market in future.
Meanwhile, there is an increasing presence of direct insurance players, which are cutting into the brokers’ share of the personal lines market, Geyer says.
“As economic pressure takes its toll, consumers tend to believe that going the direct insurance route is cheaper. But while the premiums are sometimes lower, these direct insurance products often come at a cost — because they come without the benefit of professional advice.
“We partner with brokers because we believe they are able to deliver a superior service to the end-customer — along with a personal touch.
“For our brokers, people are much more than a number on a policy, and they understand how to get the best deal for customers. This will ultimately mean that brokers will retain a share of that market into the future.”
In what has been a challenging year for the shortterm insurance sector, Geyer says, insurers have been able to demonstrate how insurance can assist people to recover from losses incurred through natural disasters, for example.
In the raging fires last year in Cape St Francis, insurers took a knock to their balance sheets, but were able to assist a number of people with compensation.
“These natural disasters have provided an opportunity to demonstrate the value that insurance can bring in making the unpredictable, manageable,” says Geyer.
Similarly with hail damage. “We received more claims for hail storm damage in one day in October, than we had received in the three previous years combined. Yet we were able to restore many people to the position they were in prior to the storm.
“But there is no doubt that climate change and the increasing variability of weather is having a dramatic effect on the insurance industry. The claims experience has become much more volatile.”
Heavy rains — and more so theft and vandalism — have contributed to the spate of broken-down traffic lights in Gauteng, particularly in the Johannesburg area.
Says Warwick Bloom, GM: marketing for Hollard: “We have engaged with the Johannesburg Roads Agency to gain a deeper understanding of the traffic light problem. The issues are varied and complex, but we believe there is an awareness of the extent of the problem and a sense of purpose within the agency in being prepared to tackle it.
“There is no doubt that this, along with many infrastructural maintenance issues, affects our bottom line and as insurers and stakeholders we should get involved, in whatever way we can, to assist in resolving these issues.”
Geyer adds: “The broker remains a core feature and key contributor to the success of Hollard. The FIA awards present us with a very important benchmark to measure our relevance, delivery to and alignment with our supporting brokers.
“We are humbled by the recognition we have received, and we owe a debt of gratitude to the FIA and our supporting brokers.”