Glacier by Sanlam’s diversified offering facalitates growth
A harsh legacy of the 2009 financial crisis was that global economies would never be the same again. This had a significant impact on financial services industries which had to come to terms with this new world. Costs were increasing while profit margins and new business were decreasing. A fresh approach was needed to ensure the sustainability of the industry.
In response to these growing challenges, a few companies started to implement mitigation strategies and new ways of servicing their clients. One such measure is diversification, a strategy Glacier by Sanlam had already embraced, and is building on - not only to achieve stability, but to facilitate growth.
A new direction to serve clients’ needs
Glacier, as the Sanlam business focused on the affluent market, embarked on its diversification strategy in 2006. The move co-incided with the Sanlam group’s shift in emphasis from life insurance towards a broader financial services offering.
In order to be able to offer the same ‘best of breed’ solutions within its short-term insurance offering as it does on the investment side, Glacier purchased a majority share in Associated Insurance Brokers (Cape) 2006 (Pty) Ltd (AIB) in 2009. It is one of the largest independent brokerages in the Western Cape with an impressive track record of over 30 years.
Andre Krause,National Manager Distribution, says that Glacier believes that short-term insurance is a vital part of any financial plan.
A model for sustainable growth
The model which Glacier is following, offers a number of advantages for the intermediary.
These include the fact that the entire claims process, from the appointment of the assessors to the claim settlement, is managed in-house. Because Glacier Asset Protection operates on a referral basis, the referring intermediary has no administrative duties regarding short-term insurance once the referral has been made. This also means that, because the intermediary does not provide the advice on the product, he carries no advice risk.
By offering a broader solution set, Glacier enables intermediaries to offer more varied solutions to their clients and at the same time diversify their income stream through the referral model. This is done without the intermediary incurring any additional fixed costs. By using Glacier Asset Protection as an outsource partner, the intermediary is able to meet the diverse needs of an affluent client base from a single office.
In addition, clients have the peace of mind, knowing that the offering is backed by the broader Sanlam group.
AIB, a subsidiary of Glacier, is the licensed financial services provider (FSP) for the solution and provides access to a range of blue-chip short-term insurers such as Zurich, Santam and MUA. "We are involved on a day-to-day basis from quotation stage, through to queries, claims and renewals, but AIB remains the FSP,” says Krause.
Offering the right product to the market is key
"There has been a significant take-up as the offering becomes more well-known in the marketplace. We predicted that financial intermediaries would come under pressure to meet a broader set of client needs to be able to compete with other offerings in the market and would need to diversify their income-earning capacity to be able to withstand investment market shocks,” says Krause.
He adds that once clients have built up a relationship with an intermediary they trust, they often prefer that the same intermediary handles all their financial affairs. This solidifies the intermediary’s relationship with his/her clients, leading to client retention and sustainable business growth.
A bright future ahead
"Clients are becoming more discerning. In order to stay on top of our game, we constantly strive to research what’s available so that we can offer the best, and most relevant, solutions. As a result, we have other short-term offerings planned, but these will primarily be in the commercial and industrial space,” concludes Krause.
