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Expert insights aimed at helping intermediaries

26 July 2022 Myra Knoesen

What does it mean to future proof your business and set it up for long-term sustainability in this new world of risk? How can you assist clients to make informed decisions and understand the impact of the choices they make today on future generations?

During Sanlam’s Financial Confidence Webinar Series, insights were shared into how to frame risk conversations in a world where clients are Covid fatigued, and the need for comprehensive risk cover where diseases of lifestyle co-exist in a Covid world.

The webinar drew on expert insights aimed at helping intermediaries innovate and adapt their approach to building long-term sustainable practices.

Post-pandemic drivers of growth

Host Theesan Moodley, General Manager at SanlamConnect opened the webinar with a key message on the future, specifically focusing on the theme of the webinar stating, “Here we are, still trying to figure out what the future holds. With this in mind, building a sustainable future requires long-term investment.”

He then introduced Anton Gildenhuys, Chief Executive Officer of Sanlam Retail Affluent, who talked about the post-pandemic drivers of growth in the insurance industry.

“There are challenges we face in South Africa, but there is reason to be hopeful. The key post-pandemic drivers of growth in the insurance industry are economic recovery, digital transformation and consumer spending,” he said.

“For Sanlam, the growth drivers will be strategic partnerships, agents and brokers (strengthened engagements and investments to enable our transformation towards relationship-led advice) and a direct business model (expanding from traditional distribution models to sustainable client relationships through partnerships),” said Gildenhuys.

“Really putting the intermediary in the driving seat and building a long-term sustainable business, Sanlam has invested in ‘ease of business’ initiatives, including digitisation, revitalisation of back-end systems, intelligent underwriting, artificial intelligence, predictive modelling and Insurtech solutions, automated processes and claims modernisation,” he added.

Behavioural economics

Guest speaker Nick Clifton, Customer Experience Manager at Swiss Re Europe, spoke about behavioural economics, to help intermediaries have more productive conversations with clients. “Behavioural economics is the study of the psychological, social, cognitive and emotional effects and the economic decision making of individuals. In the insurance context, we want people to think with the reflective brain (conscious, analytic and high energy consumption), but in reality, they make decisions with their automatic brain (quick decisions, influenced by the context and what people around them do). This means that we should speak about insurance in a way that goes with the grain of human nature and helps people make the best decisions for themselves.”

“So, what are customers thinking when they are deciding to purchase? Insurance has a low probability of claim (with any benefit paid sometime in the future), but it comes with an immediate cost. It is a challenge to create value, which is why the intermediary plays such an important role,” he said.

 “In kicking off discussions when you know there could be difficulties, start conversations by explaining the process. Often people are concerned about the unknown in terms of how long/difficult a conversation will be (even if it is long/difficult that is not necessarily the barrier) – this is all about the ease of process. How would you talk to your relative/friend who doesn’t understand insurance? Make the conversation a conversation. There are behavioural biases that can help (or hinder)… framing is key; don’t assume that your client understands what you mean or that the words resonate with them (insurance = financial protection; premium = payment; claim = safety net). Loss aversion; we hate to lose things we already have so bring into the conversation things that the client will get now (therefore would lose if they did take the policy out) to improve the value equation. Also, challenge the perspective of the conversation with the client – “if the worst was to happen, what would be your plan B?”. Use prompts to start the discussion that your client can resonate with,” added Clifton. 

“Before the underwriting happens, make it clear in the process that underwriting does happen and that others would do the same – normalise the process, position the underwriting questions as part of the process – ease of process is crucial. Highlight the positive aspect of them telling the truth – this is much more likely to lead to a valid claim. If your client has been rated, focus on the benefit (value), rather than the premium (payment),” he continued. 

In addressing the areas that are uncomfortable, Clifton said, “You are an expert in insurance and the policies/coverages that are on offer, you are not an expert in health and wellbeing necessarily (certainly not in your client’s own health). Be honest if you are uncomfortable, this allows clients to ‘advise themselves’. If they are still reluctant, be general in terms of what the coverage does – they then don’t have to open up so much about any specific concern but can, again, self-choose from a list – product specific and benefits.” 

The intermediary of the future

“The financial planning industry continues to evolve from being product led, towards making the client’s life the centre of the conversation, shifting from a sales centric model to a client centric model. Changes in the financial planning industry and in the SFP business have been accelerated by the COVID-19 pandemic, but I believe the main drivers behind these shifts are the changes in clients’ needs and the array of choice they have available, as well as legislative and regulatory changes,” said Andre Krause, Head: Succession Financial Planning (SFP).

“Clients go to advisers because of the value they bring. From a behavioural economic perspective, a whole new way, in terms of how we engage with our clients, has opened up,” concluded Clifton.

“The pandemic highlighted the purpose and relevance for insurance and advice. We need to think about whether the insurance model is still true to clients’ changing needs,” said Karin Muller, Executive Head: Sanlam Individual Life, Retail Affluent.

“With the shift to a client centric model, we believe that the successful intermediary of the future is the one that can get their clients to fully understand and appreciate their value beyond the performance of the solutions they provide. Your ability to articulate your value proposition will also ensure that your clients understand how you’re positioned and the value you bring to their lives,” concluded Krause.

Writer’s Thoughts
For many, the pandemic has emphasised the changing needs of clients and what they value from intermediary services, and it is true that your value proposition is fundamental to the success of your business. Do you agree? If you have any questions please comment below, interact with us on Twitter at @fanews_online or email me - [email protected]

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