Lizelle van der Merwe, CEO FIA
As we approach the two-year mark of the global pandemic, it is heartening to see that many member organisations stepped up to the challenge, adapting their businesses both to protect their employees and to continue to service their customers and FIA communities. Crises such as the unrest in July 2021 or a global pandemic, exposed companies’ weaknesses and strengths and this has been a great opportunity for members and the FIA to take stock. These crises put businesses through very rigorous strategic-resilience testing and I am pleased with the overall results.
That said, we should not be distracted by the seemingly catalytic events which changed the industry forever; there are other red flags that we need to address, to future-proof the sustainability and growth of the intermediary market.
The slow pace of transformation in the sector is a major risk. The expectation from government and regulators to transform the sector, without assisting in reducing red tape and rising operational costs, leads to an unlevel playing field for black businesses to develop and grow. The penalties and fines on businesses that are not transforming will lead to a potential systemic failure of the market.
The independent advisory market has significantly decreased over the last decade. Rising operational costs and overburdened regulation does not make the industry conducive for new entrants, in particular, new businesses. Large businesses (such as insurers) are not going to create more jobs, we need to promote SMMEs (such as intermediary businesses) to make a meaningful impact on job creation, skills development and black ownership.
In the recent South African Insurance Survey conducted by KPMG, it was found that the insurance sector was perceived to be the least trusted sector by clients. We continue to sell our products to customers without putting the customer at the centre of our product design. Surely after the unrest and a global pandemic, we have improved the “value” of insurance? Intermediaries are the trusted advisor; are we (brokers) investing enough in our value proposition?
In closing, the FIA board is very aware of the challenges facing intermediaries and we are working behind the scenes to influence market conduct, regulation and legislation to help protect and grow your businesses.
The future is uncertain; enable an agility mindset in your business, invest in skills development at all levels and utilise the meaningful networks provided by an organisation such as the FIA.