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Crisis is not an excuse to abandon your core strategic objectives

08 July 2020 Gareth Stokes

South Africa’s traditional short-term insurers will have to keep their core strategic objectives ‘top of mind’ if they hope to survive the triple whammy of pandemic, recession, and negative sentiment re their handling of business interruption claims. It is already clear that insurers’ gross written premium will plummet in line with the forecast 10% contraction in GDP through 2020. The forecast 30% slump in listed company earnings coupled with countless business liquidations will make it difficult to write new short-term business in the commercial market segment, while the rise in unemployment will make it more difficult than ever to retain personal lines clients.

Maintaining service to broker and client

We approached some of the country’s largest intermediated insurers to find out how the pandemic had impacted their approach to client servicing and distribution. Santam says the national lockdown has necessitated a change in its operating model to facilitate working from home. “We have been able to maintain our service levels to both our brokers and clients and continue operating successfully,” says Andrew Coutts, Head of Intermediated Business at Santam. Although sales activity has declined, the insurer’s multi-channel distribution model has enabled it to continue selling during the lockdown, with greater emphasis on digital interaction. 

Santam’s response to the pandemic is rooted in its overarching strategic focus. Coutts singled out four key areas that were ‘top of mind’ at the insurer as it entered lockdown. First, was ensuring clients continue to receive the high levels of service to which they are accustomed. Second, was to respond to the pressures that clients and their communities were experiencing through crisis. Third, was ensuring that products, pricing, and services were appropriate for clients’ changing needs. And finally, increasing digital enablement. “This final focus means equipping more of our people to work remotely and driving the adoption of digital tools by clients and intermediaries,” says Coutts. Each of these activities remain important as the country emerges from lockdown and gets down to business under the so-called new normal. 

Old Mutual Insure says that they spent heavily on technology to allow a full staff complement to work from home. “We reallocated our resources into customer service hubs that focus on customer engagements and retention,” says Soul Abraham, Chief Executive for Retail at Old Mutual Insure. “These employees have been assisting clients that are in financial trouble to find solutions to keep cover intact whilst keeping premiums to a minimum”. Their approach was echoed by other insurers, who understand the importance of being adequately resourced to service both clients and intermediaries. 

Trusting technology across the business

Technology has played an important role in delivering seamless services online through lockdown. “We are utilising virtual engagement tools to interact with our customers, business partners, and distribution channels and have found these solutions to be as productive as our pre-pandemic way of doing things,” says Abraham. These and other measures were introduced to retain customers during tough and uncertain times. Insurers were quick to deploy technology across their various business areas. “We expanded our client retention support teams and proactively engaged with our intermediaries using artificial intelligence tools to maximise the speed and the quality of our retention solutions,” says Coutts. 

Technology enabled key stakeholders in critical distribution channels to operate too. “Many of our intermediary partners are operating successfully during the lockdown and have been able to continue servicing their clients and engaging with us via our digital portals, over the phone, and by using conference calling tools that have become almost universal since March,” says Coutts. Santam also recorded an informative series of podcasts, aimed at intermediaries, to share information on non-financial support initiatives such as how to expand digital reach, which technologies to invest in, and how to reposition for growth through crisis. 

But technology is not everything. Insurers were at times called upon to make concessions in line with the ‘old school’ adage of putting the customer first. According to Coutts, Santam supported its intermediaries by granting requests to extend car hire for clients; extending timelines for compliance with risk reduction requirements; and waving minimum occupancy requirements during level 5 of the lockdown, among others. 

‘Work from home’ here to stay

Discovery Insure also went to lengths to deliver on its core promise of service excellence to its brokers and clients. “We wanted to ensure the same quality of service that they have come to expect during pandemic as prior to it,” says Anton Ossip, CEO at Discovery Insure. “We started by implementing a work from home policy to ensure the safety of our staff”. The insurer went the extra mile for its staff by providing rental cars to those who were required to be at the office; but did not have their own transport. The rest of the team was provided with the necessary equipment to allow for full functionality while working at home. 

The crisis has unearthed a handful of opportunities. One of the plus points shared by Old Mutual Insure, is that their visibility has increased. They have also seen an improvement in service levels and productivity thanks to the widespread adoption and fast-tracking of digital platforms and virtual meeting tools. “Virtual broker roadshows have allowed us to take our brokers with us on this journey,” says Abraham. “And the continuous engagements, using blogs and Microsoft Teams interactive sessions, has helped us to keep our employees engaged and motivated”.

Ossip admits that lockdown resulted in lower new business volumes across the industry. “This was mainly due to many advisers not operating during the lockdown period and many broker call centres having to close,” he says, before adding that brokers’ new business was picking up as client interactions moved from face-to-face to online, which is fast becoming the new norm. 

Finding opportunity in crisis

Coutts observes the Santam team has pulled together extremely well to the challenge. Rather than slowing down they are  moving more quickly to take advantage of the strategic opportunities that arise from being a strong player in difficult times. A crucial part of delivering on group strategy is to support the distribution channels that brings in the bulk of commercial business. “More than 85% of broker-facing staff across 50 cities and towns in South Africa were available to ensure ongoing support to intermediaries from the first day of lockdown,” says Coutts. He added that a large part of Santam’s pandemic response involved actively engaging with intermediaries to restructure and reduce client premiums in response to changing market risks through lockdown. 

Most insurers were comfortable with working in a digital environment pre-pandemic. “Our business has been built from day one to allow clients and advisers to interact with us in a digital and paperless basis,” concludes Ossip. He notes that policyholders are able to manage their policies via the insurer’s mobile app, while brokers can manage client portfolios via the online Financial Adviser Zone platform. Success depends on getting the basics right, even during crisis. Santam concludes that levels of operations and claims servicing were consistently above 90% through March, April, May, and June, despite significant disruption to traditional ways of working. 

Writer’s thoughts:
South Africa’s short-term insurance brokers rely heavily on their insurance partners to deliver the best possible value to their client, the policyholder. The COVID-19 pandemic introduced numerous challenges in the smooth operation of insurers in areas like claims, distribution, and new business. Are you, the intermediary, comfortable with the level of service that your clients received from their insurers through lockdown? Please comment below, interact with us on Twitter at @fanews_online or email me us your thoughts editor@fanews.co.za.

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