Future proofing goes beyond product placement to genuine insurance advice
The discipline of risk management and implementing risk programmes at clients is a sure way to take your short-term insurance broking practice to the next level. It was refreshing to see insurance feature so prominently in the opening session of this year’s Institute of Risk Management South Africa (IRMSA) Conference, held at Gallagher Convention Centre, Johannesburg over three days.
Accelerating risk management
IRMSA President, Nicola Comninos, set the scene in the welcome address to an event held under the banner ‘Future proofing: Accelerating risk management action for a sustainable path’. She noted that the risk professionals in the room had added sustainability to their core governance, risk and compliance functions. “These are the disciplines that we need to integrate in our various organisations,” she said. The IRMSA President also noted the international flavour of the conference, being an International Federation of Risk and Insurance Management (IFRiMA) Associations designated event.
The IRMSA Annual Risk Report cracked a special mention for its clever offsetting of the Baobab tree and the mosquito. To paraphrase, you need to appreciate the scale and impact of the risk management discipline while continually scanning the environment for emerging, hidden risks that might cause outsized disruptions. “It is important for us to remember the unexpected elements that have a big impact on our organisations, society and country … everyone in this room plays a role as custodian in future-proofing risk management,” Comninos said.
A couple of presentations later, Siyanda Kunene, Executive Director and Founder of Kunene Makopo Risk Solutions, took to the stage. He introduced his firm as a broking business focused on commercial short-term insurance and group schemes on the life insurance side. His 10-minute reflection on the intersection of insurance and risk management will resonate with insurers and reinsurers everywhere. The presentation’s starting premise was that it was not enough to simply view insurance as the culmination of the risk management process.
Elevating the broker’s advisory role
“The focus should be on risk management in terms of looking at your organisational resilience, operational continuity and risk appetite and tolerance,” Kunene said. “We need to manage the risk first, and then determine what the client needs to be insured for.”
And that, dear reader, is spot on. In fact, your writer has attended countless events where the country’s large insurers have pleaded for exactly this approach. They want their broker partners to pay closer attention to their advisory role, arguing that risk identification and mitigation should always precede risk transfer.
In practice, this means sitting with your commercial client to put in place a comprehensive risk programme before worrying about the detail of what the firm is covered for, and what exclusions and deductions might apply. The future proofing theme was then unpacked in the context of insuring assets for local government and state-owned enterprises (SOEs). These entities, the presenter explained, need functioning assets for service delivery and to grease the wheels of the economy.
Revisiting some insurance fundamentals
FAnews readers are familiar with the role of general insurance in the broader economy, but it is always worth revisiting some of the fundamentals. Insurance responds when a defined risk event occurs, providing a business or household with the financial means to recover from loss or disruption. In doing so, insurance underpins day-to-day business activity and gives individuals and firms the confidence to take on risk in the first place. As such, you can summarise the insurance industry as a key component in the engine room of the economy.
The mistake that many firms make is to believe that taking out insurance occurs in a vacuum. Wrong. Your insurance policy is actually the final step in a long process to identify the risks facing your firm, reflect on future risks and decide which of these risks can be avoided or mitigated. “Future proofing is trying to ensure that there is minimal impact [following a loss event] or trying to reduce the probability [or severity] of the loss occurring to begin with,” explained Kunene.
The discussion turned to the role of risk programmes in future proofing firms. A risk programme is a structured framework through which a firm and its advisers systematically identify, assess and respond to potential threats. For brokers, this means sitting with the client to map out the full spectrum of risks the organisation faces, evaluating their likelihood and impact, and putting in place measures to reduce or control them.
Insurance is the backstop, not starting point
Only once the residual risk is understood does it make sense to talk about insurance, which then acts as a financial backstop rather than the starting point. A sound risk programme blends prevention, mitigation and transfer, aligning cover with the client’s appetite for risk and capacity to absorb losses. This approach echoes the message that came through strongly at the IRMSA Conference: risk management must be embedded in organisational thinking rather than tacked on at the end.
According to Kunene, brokers who have frequent ‘risk programme’ interactions with their clients will see significant benefits. “We are seeing clients claiming less, their assets performing better, and a reduction in their insurance premiums,” he said. It seems counterintuitive to celebrate a lower premium in an industry where premium and commission are correlated, but the ability for your client to continue operations with minimal disruption turns out to be a win-win-win for broker, client and insurer.
The presenter drove the point home by reminding brokers that risk programmes must be continuous, not once-off exercises. “We should run risk programs throughout the year to help us determine how we look at the client’s insurance portfolio,” he said. Practical steps such as flood mapping, fire prevention and operational continuity planning reduce loss severity and strengthen the client’s hand when negotiating with insurers and reinsurers. Insurance remains the risk transfer mechanism at the end of the process.
More capacity, fewer exclusions
Kunene observed that insurers are far more receptive to offering capacity or relaxing exclusions when clients can demonstrate robust risk programmes, even after suffering losses. “We have clients where they have had claims for flood,” he said. “After we run risk programmes and put remedial actions in place, their exclusions either get removed or we see additional capacity allowed for flooding,” he explained.
The morning session, day one of the 2025 IRMSA Conference revealed that the future of broking lies in shifting the focus from product placement to genuine, risk-focused partnerships with clients. Brokers who help clients define their risk appetite and build tailored programmes in line with professional risk management frameworks are best positioned to deliver long-term value for their clients. This is the only way to stay ahead of the game in an era where insurance and reinsurance capacity will increasingly favour risk-resilient firms.
To prosper, brokers need to embed risk programmes as a necessary step for securing cover, maintaining trust and delivering comprehensive value to clients. Future proofing through risk management is the foundation for a sustainable practice.
Writer’s thoughts:
Brokers who prioritise risk programmes can help clients secure more risk capacity with fewer conditions and at a better premium. Agree or disagree? And have you embraced the transition from policy sales to risk advisory? Please comment below, interact with us on X at @fanews_online or email us your thoughts editor@fanews.co.za.
