Mitigate industry changes to risk management

Alwyn Bamberger, who is an established intermediary and member of the Financial Intermediary Association of Southern Africa, has been instrumental in pioneering many changes in the insurance industry. He says that the latest amendments relating to risk management will have far reaching consequences if brokers and clients alike are not adequately educated and take the necessary precautions to ensure that their clients are covered.

Previously, insurance brokers were instructed merely to comply with the rules and regulations of the country. Bamberger states that this has now changed, and insurance regulations state that brokers need to ensure that their insurance policies now comply with specific requirements. He adds that this is not a change in legislation, but a change in policy conditions.

One of the large insurers is already leading the way by including specific reference to this in their policies. Their revised policies now detail all of the Statutes that need to be complied with including:

• The Occupational Health and Safety Act.

• The Mines and Works Act.

• The Electricity Act.

It is important that in terms of the Financial Advisory and Intermediary Services Act (FAIS) Act, the broker makes the client aware of the changes in policy conditions, and that this is recorded in a client advice record, signed by both the broker and the client.

In order to assist with the risk assessment process, Bamberger strongly advises brokers to obtain the assistance of a professional risk management company that has the prerequisite expertise and systems that will significantly reduce their liability.

 

John Kilian, Risk Management Consultant from Safety Solutions Africa states that the right health and safety consultancy has the resources and expertise to partner with brokers throughout this process. Kilian adds that in order to take full advantage of the partnership, the consultancy should partner with brokers from the beginning of the process, helping to identify possible risks.

He continues by stating that risk management consultants add significant value by working hand-in-hand with insurance brokers and their clients in order to help mitigate risks. By doing so, it will protect brokers and their clients from the loss of assets as well as assisting them with workplace health and safety related accidents. It is imperative that practical risk assessments are tailored to specific industries and occupations in order to provide a safer working environment and ensure complete compliance with the Occupational Health and Safety Act.

Documentation is a key component of this, and a risk management consultant is skilled in providing all documentation required in terms of the provisions of the Occupational Health and Safety Act. It is critical that the safety file be kept on site and made available to inspectors or the principle contractor on request. The risk management consultant is equipped to guide the broker and client in terms of health and safety matters that need to be addressed on each specific site.

An important aspect of health and safety is wellness, and this needs to be factored in. By providing employees with knowledge related to healthy lifestyles, they are empowered to make healthier choices for themselves and their families. This enables them to reduce their risk, and by doing so, reduce risk to employers.

By partnering with specialised risk management consultants, the risk to both brokers and their clients can be mitigated. These specialist professional organisations will guide them through the process and ensure compliance with regulations.