Cost sensitivity a chance to add value, says FNBIB

For smart brokers the consumer’s current cost sensitivity creates “a huge opportunity to add value” by demonstrating industry knowledge and seeking portfolio-wide solutions.

The proactive response to economic pressures comes from FNB Insurance Brokers (FNBIB), the short-term insurance arm of the FNB Financial Services Group and a company that has shown itself capable of achieving sustained growth across various phases of the insurance cycle.

Johan Nagel, CEO of FNB Insurance Brokers, notes: “Many households are taking a great deal of financial strain from prevailing economic conditions, but cancelling an insurance policy now is ill advised.

“However, brokers have to go beyond this statement of fact and add value by thinking beyond a policy sale to portfolio structuring. By broadening the focus they can show how smart savings become possible; for example, by consolidation with the appropriate insurer.

“Only the knowledgeable broker who can take a broad industry view can add value like this. It’s an ideal opportunity to cement relationships with consumers by seeking pricing efficiency across an entire portfolio. New business potential may also be highlighted; perhaps for now or perhaps for later.”

Developing efficiencies like this leverages the broker’s biggest asset – familiarity with individual consumers and their needs.

In current market conditions, the advice component of a transaction becomes paramount, says Nagel. So does the need to demonstrate consumer orientation by responding to the pressure consumers are feeling on their income.

Credible and personal relationships between consumer and adviser enable in-depth discussion and foster the development of long-term strategies that save costs and optimise opportunities.

FNBIB has already published a list of consumer tips on how to improve cost efficiency without compromising essential covers.

The consumer-friendly broker’s next step is to lead a review that focuses on portfolio issues rather than narrow product features.

“Today’s well qualified insurance professional is able to take an industry-wide view,” says Johan Nagel. “Professionals will often be able to alert consumers to ways of cost effectively placing business with the insurer that provides the optimum blend of covers across vehicles, buildings, household contents and all risks.

“In addition, the broker is ideally placed to evaluate policies to ensure the client has extracted maximum value from various discounts.

“The possibility of premium reductions for lower market values on vehicles often goes overlooked without the prompting of a wide-awake broker. The same can be said of substituting competitively priced third-party covers for comprehensive cover on ageing vehicles.”

“But what’s basic for the broker can be a real eye-opener for the consumer,” says Nagel. “Now’s a good time to open the eyes of the consumer to the value we add. The more we stretch the consumer’s rand the more chance we have of building our client-base.”