Adding value far beyond a good price

05 July 2018 Santam
Andrew Coutts, Head Intermediated Distribution at Santam

Andrew Coutts, Head Intermediated Distribution at Santam

Santam has been in the business of insurance, good and proper, for 100 years. During its time, the company has seen, first-hand, how the expert advice of intermediaries transforms the lives of policyholders and their businesses.

“An intermediary plays a pivotal role in supporting clients by simplifying complex terms, assessing and addressing risk, providing expert advice and negotiating competitive pricing. In our increasingly complex business world, the intermediary has become incrementally relevant,” says Andrew Coutts, Head Intermediated Distribution at Santam.

The following, Coutts says, are some of the reasons why clients need to have expert intermediaries at their sides.

Simplicity, personalised service, choice and cost

“Contrary to many misconceptions, extensive research exists that shows that intermediated policies are not more expensive than those sold direct. Brokers have access to a wide selection of some of the best insurers in the country, many of whom do not sell directly to the public.  Once a broker has properly assessed your individual insurance needs they do the shopping for you, to find you the right coverage at a competitive price.”

“With a broker you also deal with a dedicated individual who you get to know and trust with the added benefit of the flexibility of face to face engagement or interaction via online or telephone channels at your choice,” continues Coutts.

Expertise and advice

“Brokers provide expert, unbiased advice on your individual insurance needs. Unlike other providers who are focused on selling you something, with a broker your interests come first.  It is this focus on customer needs rather than their own that sets the broker apart from all other insurance options. Brokers are free to make impartial recommendations, have access to specialist underwriters, help ensure your assets are correctly valued and help you through the fine print.”

“When it comes to renewing a policy, many people simply tick the boxes each year, but changes such as building works, acquisitions or dispositions may well affect the value of the risk. If you are insured through a broker, your broker will ask questions about possible changes to your circumstances to ensure that risk protections are still accurate and you have the relevant level of cover,” adds Coutts.

Claims experience and advocacy

“Claims time is crunch time and an intermediary provides invaluable support throughout the process. As a partner and advocate, an intermediary works with an insurer, on an insured’s behalf, to try and speed up the claims process as much as possible. Experience also shows that a broker’s knowledge and contacts can often help settle a disputed claim.,” continues Coutts.

“Certain claims can be stressful for clients/businesses when they have to provide information and documentation in support of their claim. This is a time when clients realise why an intermediary is such an essential part of their business advisory team,” emphasises Coutts.

Powerful support for Intermediaries

As a leader in short term insurance, with over 100 years of experience, Santam continues to work very closely with intermediaries, in delivering insurance good and proper to their clients.

“We offer a wealth of support which includes ongoing professional education through workshops and conferences, constantly innovating technology platforms, an extensive decentralised footprint and always on claims support solutions. Intermediaries are and will remain our preferred distribution channel,” concluded Coutts.


Added by Humphrey, 06 Jul 2018
All very true in my mind.

The simple fact is that a client that goes direct does so based on price and persuasive TV and other advertising. He has no clue about what is excluded or included in the finer details of the contract (policyholders never read policies they have - never mind before taking out the policy). Very very dangerous - even if they did read it they would not compare it to conventional insurer wordings. I did an analysis of a direct insurers commercial wording and it was very restrictive.

If one analyses the PWC insurance industry analysis then one will observe that the combined expense ratio (general expenses and acquisition costs combined) of a direct writer is not that different to a conventional insurer. The idea that cutting out the middle man saves on premium is simply not true. If one analysis the report further one will observe that the direct writers underwriting margin (profit) is huge relative to conventional insurers.

Whilst they would like to argue that this is due to better underwriting and risk selection - one wonders how much of it is attributable to inferior cover and a harder claims approach.

I think if the public saw the extent of the profit margins of some direct writers and they applied their minds, they would have to ask whether the value for money spent is actually there.
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Added by Andre Stols, 04 Jul 2018
I agree as a person with 40 years experience in the industry. on a daily basis, I see how clients are battling with some direct Insurers when there is a claim- the problems arise due to lack of proper advice from these direct Insurers and the fact that the Direct Insurer is not at the risk to evaluate the risk and give advice accordingly. My advice to clients: stick to the old fashioned way for a marginally higher premium and remember that buying cheap Insurance WILL cost you dearly at some stage in your life.
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