Survey reveals new confidence in 2011

A recent survey amongst insurance brokers in South Africa has revealed that they are slowly gaining confidence in the South African economy once again. These levels are slightly more positive than the confidence levels recorded last year January.

According to the CIB Broker Confidence Index Survey, which measures the confidence levels of insurance brokers on a number of issues, the results for the last quarter of 2010 showed that brokers have confidence levels of 66% for the economy in the next 12 months. According to Jonjon Smit, sales director of CIB Insurance Solutions, this is a very encouraging outlook for 2011.

The survey did however reveal that brokers are continuing to lose confidence in their prospects of attracting new business over the next 12 months, an indication that South African consumers are still not out of trouble financially. The survey recorded confidence levels of 76%, down from the 79% recorded in January 2010.

While brokers may be less confident of attaining new business this year, the survey revealed that they are more confident of maintaining their current customer book, with 78% expressing confidence in their ability to retain existing clients. Smit says that this is because brokers realise how valuable current clients are and make a more concerted effort to retain the business.

According to those surveyed, the biggest challenge facing brokers over the next 12 months will be complying with new legislation and regulations. Smit says that this is understandable as the Consumer Protection Act, which come into effect on 1 April 2011, and the Financial Services Board (FSB) regulatory exams are on everyone’s minds.

“It is of the utmost importance that brokers familiarise themselves with their obligations in terms of these exams. They have been put into place to ensure that those operating in the financial services industry, including brokers, are both competent and knowledgeable.”

The survey also showed that the confidence levels amongst brokers with regards to business conditions for the local insurance industry over the next 12 months fell marginally to 67% in the last quarter of 2010 in comparison with last year’s 68%.

“The outlook for 2011 seems very positive amongst all respondents, which is a very encouraging sign for the South African economy and the growth of the insurance sector” concludes Smit.