Brokers at your service

Since the release of the Retail Distribution Review (RDR) document and the ongoing regulation passed in the broker space, many short-term brokers are concerned that the strong value-add they bring to the market, may be compromised. Brokers contribute significantly to the client continuing to receive the best deal, by acting on behalf of the client, both with respect to claims as well as making sure the client has the right policy cover and limits in place.

While the notion of Treating Customers Fairly (TCF) is starting to flow a lot stronger with insurers being forced to put together strong action plans on each outcome, the client’s broker adds different value to the client’s experience when dealing with the insurer.

Enhanced customer experience

The broker has strong technical knowledge on the products that the client requires as well as the limits needed to make sure that if the client has a claim, he or she will be covered correctly.

The broker also has specific duties and responsibilities to protect the client from an insurance technical point of view as well as to represent the client when a claim is submitted.

While dealing with a broker is certainly not mandatory, there is the opinion that the overall client experience stands to be further enhanced when the services of a broker are employed, due to the fact that the broker has made it his or her business to understand all the complexities associated with insurance.

Value-add chain

The emotional value added to a client's life by always knowing what is important to him or her transforms your role from intermediary to trusted adviser. Through such an approach, even the smallest of brokerages can gain a competitive edge, and deliver enduring, sustainable value to all those in its orbit.

The younger generation may be content to speak to a different call-center agent every time they have a query, but generally speaking clients like peace of mind, which often comes from communicating with someone they know and trust that has the experience and expertise.

This is one of the reasons that the concept of ‘binders’ came about. Because the broker is closer to the client and has the flexibility to respond faster to the client’s needs. As a result, clients get a good deal all round as a result of the value chain that has been created.

Clients are not placed in a queue or call centre for service delivery, instead they receive immediate and personalised service from the moment they make contact with their broker.

Risk properly assessed

The second real value add of the intermediary is the broker’s ability to understand the risk management and relevant disclosures that need to be made by the client to the insurer, so the insurer can properly assess its risk and rate it accordingly thereafter.

The broker has the technical experience to negotiate on an appropriate product for his or her client, less so in the personal lines space which is far more commoditised. However, this is certainly not the case in the commercial and corporate space where almost all insurance in South Africa is handled through intermediaries because of the value they add.

A working partnership

The broker and the insurer would work in partnership with one another to understand the risks being underwritten before ultimately introducing a solution to the client. This would include what the client must do in order to make certain that his or her premiums and level of cover is beneficial to him or her.

In addition to this, the broker will work with the insurer to assist the claims process in running fairly and in the most efficient manner. The broker’s relationship with the insurer is key to making certain that each party fires on all cylinders.