The Financial Intermediaries Association of Southern Africa’s (FIA) yearly roadshows kicked off in Pretoria last week, and the FAnews attended the Johannesburg roadshow which addressed many pertinent industry issues.
One of the challenges facing the industry is the tsunami of regulation which companies have to comply to. Technology is also playing a greater role in the industry and insurers need to embrace the influence the customer is having on the industry.
Do not resist the FSB
The industry is struggling to come to terms with the wave of regulation being implemented in the industry. While there are fears that the industry is becoming over regulated, the Financial Services Board (FSB) is adamant that this is not the case.
Caroline da Silva, Deputy Executive Officer for the Financial Advisory and Intermediary Service (FAIS) at the FSB said that the industry as a whole needs to embrace change and regulation is the catalyst for this change. “The FSB is not immune from change. We have to take a serious look at our role and we have to adapt accordingly because as the market conduct regulator under the Twin Peaks model, the FSB will be in charge of regulating banks, which the FSB has never done in the past,” said Da Silva.
Risk assessment and monitoring is also something the FSB wants to embrace in future. “We need to engage with the industry on how they can identify and mitigate risk. This needs to be intensive and intrusive, but this does not mean that it needs to be aggressive and hostile. What we want to do is to make sure that we create an industry which serves the best needs of the customer and industry participants,” said Da Silva.
Technology is taking over the industry
With the growth of the internet, and devices which enable the public to have constant access to the internet, the public will be one of the main drivers of change in the industry.
If insurers do not embrace this change, they will struggle to remain relevant in the industry. Tracker, one of the companies which is playing a proactive role in adopting technology, has developed a telematics app which will be tailor made to suit an insurer’s specific needs.
Tracker is one of the sponsors of the roadshows and Daniel Weston, Tracker Accounts Manager, says the one thing Tracker has learned over the past 17 years is that the industry we operate in can be completely turned on its head in an instant.
“We are seeing a slight increase in theft and hijacking, so we have to increase our internal capacity in order to ensure that we offer the best service to our clients. If the industry does not tackle this problem as a matter of urgency, it can be shifted back to where it was ten years ago,” said Weston.
Weston pointed out that Tracker receives over 25 million messages a day from tracking and telematics devices. He added that there are over 20 million smartphone users in the country, which is almost half of the country’s population and statistics show that South Africans spend more time on their phones than watching television. This shows the relevance of technology and the important role that it plays in the industry.
Industry consolidation will be key
Hollard is one of the main sponsors of the FIA Roadshows and Chief Executive Officer (CEO) Nic Kohler pointed out that because of the situation the industry is currently faced with, industry consolidation may be a major differentiator.
“The current economy is challenging, but there is room for companies to become profitable in the market. International insurers such as Catlin, Munich RE and Allianz, as well as a number of local insurers are making a serious point to prove that this is possible,” said Kohler.
He added that embracing risk is a key element to success and the most effective way to do this is to build capacity within an organisation. The public is becoming more educated on the financial services industry and they know what they expect from an insurer. It is up to the insurer to make sure that this is achieved. We may see more industry consolidation where niche underwriting management agencies are merging with larger insurers, which can only benefit the industry.
One of Hollard’s key messages was that the industry needs to achieve a higher level of performance in order to survive and remain relevant.
Applying high performance to the industry
A highlight of the roadshow was the presentation of one of South Africa’s most respected sports scientists, Dr Ross Tucker, who has worked with the Springboks, various other international rugby teams, various Olympic athletes and other high performance athletes.
He made an interesting comparison between sporting events and the growing need to tailor make policies to suit customers. The talk was worth listening to as he seamlessly brought the concept of high performing athletes and illustrated how this can be used by a broker or an adviser. Like high performance athletes, these industry professionals have the necessary skills and knowledge to provide clients with an advantage in that they will be purchasing the right product to ensure their financial security.
It is recommended that intermediaries make every effort to attend the roadshow when in their area. More details on the roadshows can be found on the FIA website at www.fia.org.za . Attendance is free and intermediaries can gain valuable insight which will help them become more successful in the industry. Please comment below, interact with us on Twitter at @fanews_online or email me your thoughts firstname.lastname@example.org.