Building on a culture of excellence to help brokers

16 March 2015 Jonathan Faurie
Lizé Lambrechts, CEO, Santam

Lizé Lambrechts, CEO, Santam

We all know about the old proverb which says that if something isn’t broken, don’t fix it. This has proved to be sound advice over the years as leadership in major companies came and left and new leaders took over the mantle of companies which were in existence long before their appointment.

This proverb can most certainly be applied to the South African insurance industry, which has a long and profitable history. While companies are currently under a bit of pressure, this will not last and strong leadership will see them become profitable in the future. FAnews caught up with newly appointed Santam CEO Lizé Lambrechts who says that she is not on a mission to reinvent the Santam wheel.

Keeping the culture

Lambrechts takes over from Ian Kirk who became a mainstay at the company and entrenched a working culture at Santam which has seen it grow into the biggest short-term insurer in the industry. This has served the company well and Lambrechts points out that there is no need for any major change.

“I am very new into my tenure at Santam and there are no immediate plans to change anything the company does. It operates off sound principles and has a good company culture which I would like to encourage. Perhaps three months down the line I may look to tweak certain aspects of the company in order to refine certain processes, but there will be no major changes,” says Lambrechts.

The company works off the tag line of insurance good and proper which indicates that the company strives to operate in a way that will provide the best products and services throughout the company’s value chain, which is evident in their new adverts that highlights all the reasons we need to be proud to be South African. It is this mindset that attracted Lambrechts to the position.

“What really excited me about the opportunity at Santam is the fact that the company acts off sound principles of integrity. Santam has always tried to foster relationships with its value chain off the basis of open and honest communication. Obviously we cannot be all things for all people, but as long as we keep clients and brokers happy while remaining profitable, we are on the right track.”

The cornerstone

At the heart of the culture which Lambrechts found inviting is the role of the broker. Santam has always been an intermediated business and they value the relationships with brokers who they see as key business partners. 

In an insurance industry which is increasingly becoming risk based – and will continue to be regarded as such as long as regulation reform is taking shape – broker engagement is key to the success of the company as it needs to remain profitable and has a role to play in adding to the growth of the business of independent brokers.

“Broker engagement has always been key at Santam and this will also not change. I engaged a lot with advisers at Sanlam where I was the head of their retail business, so I know about the value of fostering key relationships. This company has always been well supported by brokers in the past and I hope that they will continue with this support into the future.”

The future looks bright

One of the worrying aspects of the regulatory change which is besieging the industry is that brokers are uncertain about their future and the future of the intermediated model in the country. With the implementation of the Retail Distribution Review and the impending Solvency Assessment and Management, there are fears that the broker’s role in the industry may become a lot tougher.

However, this does not mean that there will be no place for the broker in this new world, in fact, Lambrechts feels that the role of the broker will be more important as they add significant value to the client.

“Change is something that we cannot fight against, it will happen. I just hope that the challenges that are present in the industry will be resolved and that companies can grow on their profitability. There is currently a strong push by direct insurers who are looking to find a place in the market, and that will continue in the future, but I don’t see a situation where they capture the lion’s share of the market. The intermediated model will continue to play an important role.”

The winds of change

We have alluded to the new regulation that the Financial Services Board (FSB) wants to bring into the South African industry. Indeed, the regulator has been aggressive in its approach which it describes as necessary to bring South Africa on par with international markets. But is this change necessary, and how will it affect the broker?

“By and large, the FSB hopes to create value for clients. Speaking from a personal point of view, this is a vision that I support as clients are our bread and butter. However, the FSB must find a pragmatic approach to try and find the best way to implement what is ultimately a lot of industry change without presenting companies and brokers with too many challenges.”

When one looks at the events which led up to the winds of change increasing in pace, one could argue that the main culprits of the industry activities that the FSB wants to root out has been the long-term industry. By this assumption, the short-term industry has unfairly been saddled with the sins of a few questionable individuals and companies that come from an industry they have no part of.

“There is an element of truth in this view, but we cannot make a clear cut call on it. What needs to be done is that the FSB needs to look at the problem that regulation hopes to solve. If it is a problem with the long-term industry, they need to be careful that the implementation of the regulation does not impede the actions of the short-term industry,” concludes Lambrechts.  

Editor’s Thoughts:
The industry is going through significant change, and brokers need to be given some measure of surety that there will be no change in the company that they work for. The fact that Lambrechts is not looking to reinvent the wheel is a vital step in the right direction and is an indication that pragmatism may be a key component of her tenure at the company. Please comment below, interact with us on Twitter at @fanews_online or email me your thoughts

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