Strength in numbers

For many years, there has been a collective voice for insurers and intermediaries; but there has been no collective voice for system providers. These are the companies that provide the necessary technology to insurers and brokers to carry out the outsourced functions they have been tasked with.

This is set to change as the lone voices in the night are looking to come together under a unified banner.

A number of the industry’s biggest insurance systems providers have banded together to form the iSPF, the representative body looking after the interests of systems providers. Outsourcing is a core feature of the South African insurance industry and without these independent service providers, the options available to both brokers and clients would be greatly limited.

It is however a complicated relationship between insurer, broker and system provider, and this has left gaps in responsibility and understanding of who does what and where the industry should be.

Steve Symes, CEO of Genasys Technologies which is a founding member of the iSPF, says that the biggest challenge in the industry at the moment is that a lot of decisions are being made by insurers, brokers or representative bodies without taking the technology platforms that they work with, into account.

“The companies that belong to the iSPF are specialists in technology and our aim is to assist the bigger industry to make the best and most relevant decisions when it comes to technology; we want to be more involved in that process,” says Symes.

Adding value

There is a lot of value that can be added by the involvement of systems providers. Technology will only grow its influence on the industry going forward, and the iSPF can provide the industry with guidelines from a technology perspective that will manage and minimise the cost of any decision they make.

The iSPF has engaged with the Financial Intermediaries Association (FIA) as well as with a number of key insurers, and the response to the body has been positive.

While the lone voice in the industry has been a challenge for the systems providers themselves, the challenge is just as pertinent for insurers. “The FIA and most insurers want a representative body in the industry they can engage with. At times, insurers have different companies performing outsourced system functions for them. The insurer would then need to engage with each of these companies on an individual basis. A lot can be said about the value of a single voice in the industry,” says Symes.

One of the core purposes of the iSPF is to implement standards and methodologies among systems providers that would actually improve the process of achieving the outcome they need to achieve. In order to do this, all members of the iSPF need to agree to and support those standards.

Building a bright future

There is no doubt that this initiative, once it gains momentum, will benefit the industry. The iSPF will be able to play a key role in the industry in reducing costs as there is a significant investment into technology systems. If these systems can be refined by methodologies and standards, there can be significant savings for end users.

The iSPF is currently made up of the four major systems providers in the industry, which represents the interests of about 60% to 70% of the market. Symes says that this will be opened up to all technology companies in the industry. The iSPF is looking at two types of memberships.

The first is a full membership which is for companies that are providing policy administration and claims systems. The second membership is an associate membership which is for those companies who only supply support or IT services.

The industry will surely benefit from this initiative because they will receive focused advice on systems and processes which will help them improve systems to cut costs and serve their clients more efficiently.