A rethink is driving the market

First Link MD Keith Young says: “Our industry is currently undergoing a period of consolidation, not because the broker model is under threat, but because legislative requirements create the need for new investment in training and systems.

“This prompts some independent brokers to re-examine their options going forward and creates expansion opportunities for a company such as First Link.

Young points out that the broker remains the preferred marketing and advisory channel for at least 85% of the short-term insurance market, despite many years of competition from direct insurance players.

He adds: “The major development in our industry in recent years is not the retreat of the broker, but the re-think of a major direct insurer. The pioneer of direct insurance in South Africa now conducts the vast majority of its business through the broker channel.

“I expect the direct marketing alternative to hit a market-share ceiling of 15-20% and for the broker to entrench his position as the preferred option for consumers who are time-pressed and need professional assistance if they are to match a wider and wider range of products with their personal needs.”