Brokers remain key as underwriters eye customer exceptionalism
Customer exceptionalism enabled through digital technology and talent retention stand out as key focus areas for non-life insurers and their underwriting management agency (UMA) partners, as they look for ways to differentiate their offering in a competitive marketplace. Midway through 2025, these firms were struggling to make headway against a backdrop of conflict, escalating trade tensions, political polarisation and stalling economic growth, to name a few.
The defining feature of our time
“Uncertainty is the defining feature of our time,” said Tarina Vlok, MD of Elite Risk Acceptances, as she introduced the 2025 Elite Wealth Conference theme: Navigating uncertainty – new rules for risk and resilience. At the time, local insurers and UMAs were caught between an apparent lull in mega loss events and inevitable claims servicing cost pressures due to higher-for-longer global inflation and supply chain disruptions stemming from conflict in Russia–Ukraine and the Middle East.
“The weather has been relatively kind to insurers this year, but uncertainties around tariffs [and other supply chain-related developments] mean we are waiting to see what parts are going to cost, and how this will impact our claims costs,” Vlok said, commenting on the state of play in South Africa. On the positive side, she noted that market commentators were upbeat on the country’s economic prospects following improvements in electricity provision and the focus on infrastructure in the third version of government’s 2025–2026 National Budget.
Globally, the MD singled out five themes that insurers and reinsurers would have to tackle to ensure long-term sustainability. Changing customer behaviours in the post-pandemic world cracked first mention. “We need to put our customers at the centre of everything we do; we have to become customer obsessed,” Vlok said. Customer-centricity was singled out as fundamental to insurer sustainability. The second theme, being increased digitisation and artificial intelligence (AI) adoption, turns out to be a great enabler of customer-focused insurance.
AI, digital enables next-level client servicing
“We cannot ignore the influence of technology, and we need to use AI and digital enhancements to deliver on customer expectations and enable better service, faster claims settlement and smarter underwriting decisions,” Vlok said. Climate change; emerging risks such as cybercrime; and skills and talent shortages rounded out the list shared during the MD’s brief introductory remarks. Notably, all insurance stakeholders were struggling with how to replace the old Lloyd’s-style underwriters, now nearing retirement age, who they have come to depend on.
Vlok vacated the podium at the hybrid event for a pre-recorded message from Old Mutual Insure MD, Charles Nortjé. He kicked off his presentation by reminding the 2500-odd brokers in the audience of the founding principles of the Elite business, being to cater for high-net-worth retail insurance buyers who were asset rich but time poor. “These clients need a broker to provide advice all the way along the insurance purchasing chain; we seek clients who value advice, both at the time of purchasing cover as well as through the claims phase,” he said. The non-life insurance broker sits at the heart of this solution.
According to Nortjé, the South African short-term insurance industry has traded through somewhat of an inflection point over the last two to three years. He revisited each of the three mega loss events that have influenced underwriting decision-making and pricing locally. First, the deluge of business interruption (BI) claims that emerged out of the COVID-19 pandemic and ensuing lockdown. Second, the multi-billion rand in claims paid by SASRIA SOC Limited after rioting and looting losses in parts of KwaZulu-Natal (KZN) and Gauteng in July 2021. And third, the April 2022 flood event in KZN.
Reinsurers force insurer introspection
“COVID impacted the reinsurance markets that we use; the riots impacted the reinsurance markets that we use; and in 2022, KZN once again found itself at the epicentre of [a major] flooding event … setting off another series of claims on the reinsurance market,” Nortjé explained. He noted that reinsurance was an important part of the insurance value chain, and that rising reinsurance premiums had forced local insurers to take a hard look at their risk exposures and pricing.
“It was important to get pricing back to sustainable levels,” he said, commenting on the tough measures introduced by Old Mutual Insure and others to their end insureds via the broker channel. For 2022, the numbers show that the insurer was well behind the pricing adequacy curve, charging only R82 per R100 of exposure. “We were severely under-priced,” Nortjé said. “But today, I am pleased to say we have solved that problem [as] an outcome of the price adjustments we have had to put through.” On the plus side, the presenter hinted they were not expecting any steep increases at upcoming renewals, though clients with challenging claims histories or specific circumstances may experience renewal differently.
The presentation turned to how US insurers and reinsurers were responding to the rising frequency and severity of catastrophe losses. The biggest natural catastrophe loss event year-to-date 2025 is the Palisades wildfires that raged in and around Los Angeles, California, in January. Aon PLC estimated that the insured losses from this event will approach USD38 billion. The presenter noted that many major United States (US) insurers simply refusing to offer wildfire cover in that state, leaving consumers high and dry and contributing to a growing protection gap.
Policyholders must have skin in the game
Climate change is a big talking point across the insurance sector, and all stakeholders are considering ways to better manage exposures to these risks. In the US market, many insurers are reconsidering their climate-change-related extreme weather risk exposures, especially in areas frequently affected by hurricanes and flood.
Fortunately, South Africa is less exposed. “We are not planning a blanket withdrawal from trouble perils like flooding,” Nortjé said. “Yes, we need to manage our exposures carefully. Yes, we need to make sure we are getting the right price for the risk; but the most important thing is that policyholders also have skin in the game.” Put differently, local insurers are leaning on their insureds to protect their assets, and thereby reduce the resulting on-the-ground exposure following a loss event.
Nortjé prefers this risk mitigation approach to the unpleasant alternative of an industry offering insurance policies with dramatically reduced cover and long lists of exclusions. He said that Old Mutual would continue to look for ways to close the protection gap and provide brokers and their clients with valuable cover at a relevant price point.
Holy Grail in a riskier world
Technology stands out as a foil for insurers against a riskier world. Case in point, Old Mutual Insure has leveraged technology to re-engineer its motor vehicle accident claims process. The Holy Grail in this space is automation of the key-to-key claims process from notifying the insurer of the accident, to having the vehicle towed, to doing the damage assessment, to authorising the repair, and finally handing the vehicle back to the insured. In one example, insurers use AI and machine learning to make accurate damage assessments using photos of damaged cars.
Looking ahead, Nortjé said that Old Mutual Insure would continue investing in technologies that simplify and streamline claims while empowering clients and brokers alike. “We appreciate your business, and we will continue to work hard to meet your expectations,” he said, talking directly to the risk advisers in the audience. His conclusion segued nicely with that made by Vlok moments earlier.
Talent wins in the long run
She concluded that building a sustainable and future-fit insurance business required embracing AI and digital tools, meeting customer expectations and investing in the next generation of talent. “We believe that talent wins in the long run,” Vlok said, dispelling the myth that large businesses are slow to adapt to change. Growth and sustainability are only possible through collaboration between brokers, clients, and insurance specialists, with each stakeholder making a firm commitment to long-term resilience.
Writer’s thoughts:
As non-life insurers push for service enhancements across the value chain, brokers are being asked to do more with less. Are local insurers doing enough to promote brokers as the cornerstone of customer exceptionalism? Please comment below, interact with us on X at @fanews_online or email us your thoughts [email protected].
