Santam pioneers new approach to short-term insurance

Ian Kirk, Santam CE

Santam, South Africa’s leading short-term insurer, this week announced a new approach to short-term insurance which is set to change the way the company does business and which is a first for the industry. As the market leader for more than 90 years in this country, Santam is introducing a new business approach which will address certain aspects that may disappoint clients about the industry, and share rewards and incentives with clients who proactively manage their risk and thereby reduce claims.

Recently voted Best Personal, Commercial and Corporate insurer for 2009 by the FIA, Santam believes this new strategic direction will do for the short-term insurance sector what recent innovation did for the medical aid industry.

Ian Kirk, Santam CE says by following a partnership approach with both its brokers and its clients, it aims to assist the market in taking preventative measures to manage risk, which in turn will assist with reducing the likelihood of claiming. This will lead to an improved risk profile for clients, which in turn will impact positively on brokers, their businesses and the long term profitability of the company.

“This new strategic approach is not just about how Santam talks to its clients, it encompasses a change in every aspect of our business as we refocus our organisation to think in a client-centric way,” said Kirk. “Based on the findings from client and industry research, we are redefining the industry by changing those aspects of short-term insurance that clients disliked the most or where they felt their needs weren’t being met. We have listened to what clients want and have implemented the necessary steps to overhaul their experience with short-term insurance and adapt to their changing needs.”

Kirk added, “Our market is changing and against the backdrop of the current economic climate we re-looked all our business processes, with a particular focus on four strategic elements: risk management, product innovation, the claim experience and retention and reward.”

The first focus area is product innovation to ensure that each policy is customised and as individual as the assets it covers. The range and limits of basic benefits have been expanded. Optional benefits such as 4x4, luxury car and B&B are but a few which have been added. This will be supported by clear, simple wording in all policy documentation, taking away all the jargon and complexity often associated with legal documents. The company is also investing heavily in training its intermediaries to ensure that they can continue to add value to their client base as well as providing a more transparent service to clients.

On the risk management front, our focus is to make sure that our clients are accurately insured. Santam will launch a series of tools to help clients do this – including an online tool to assist with the calculation of the value of household contents; self-help calculators and professional risk assessments including safety appraisals. These tools will enable clients to determine whether they are over- or under-insured. Clients will also be rewarded for taking preventative measures, installing the correct burglar proofing and taking advanced driving tests.

On the claims process, which is often seen as the point at which the short-term insurance industry can disappoint a client, Santam’s new approach will include a commitment to settling certain lifestyle item claims such as replacing your watch, cellphone or sunglasses within eight hours; a 24-hour tracking service of claims; providing each client with a personal claims handler – a single person that will be accountable for a claim from start to finish; and Santam guaranteeing the workmanship on covered repairs by Santam’s pre-approved suppliers such as panel-beating, as long as the client owns the insured assets.

Lastly, Santam will reward clients for loyalty and responsible behaviour by reducing their premiums accordingly. “We have even influenced our actuarial model to take into account clients’ risk management behaviours, their seniority (over 50s tend to be far more responsible), and their loyalty to Santam over the years. We have clients that have been with us for 30 to 40 years – it is right they should see a benefit for their continued loyalty,” added Kirk.

Initially launched for the personal lines market, the new business approach will also be rolled out to Santam’s commercial client base in the coming months.

“This is a “back-to-basics” approach for us. Our new business direction impacts clients at each level including how their claims are processed; how our call centre operates; how data records are maintained and how policy documents are worded,” says Kirk.

In conclusion, he added that the goal of the new approach was to give impetus to its operational capabilities to ultimately broaden the distribution footprint of its intermediated model.

“We have been the market leaders for 90 years and are focused on constantly finding new ways of doing things. If by this we improve the cost effectiveness of our clients’ short-term insurance by assisting our brokers to enhance their relationship with policyholders, then this new approach will have paid off.”