Ushering in the age of the engaged client

We have all heard about the reports that legislative changes are reshaping the way that the industry operates. But what effect is client behaviour having on the industry?

How do we view our clients? Is doing business with our clients in the same way that business was done ten or fifteen years ago the right approach to have? While the majority of brokers see their clients as a valuable asset to their business, are we beginning to look at them as key business partners?

Pillars of truth

In essence, the future actions of the Financial Services Board suggests that they will shape the industry in such a way that brokers will be looking at clients as key business partners. In preparation for this, there are certain business aspects that companies can adopt in order to remain relevant in the new market.

FAnews spoke to Anton Ossip, CEO of Discovery Insure, to get his view on the future of the short-term industry.

“One of the biggest changes in the world is that clients are no longer just satisfied with the fact that they are protected. They want associate themselves with a brand that is playing a role in community development and is embracing a shared value approach to business,” says Ossip.

At the heart of shared value lies the fact that societies require companies to fulfil a socially progressive core purpose. In that way, companies can lay the foundation for the second key pillar of doing business in a new environment. If there is intrinsic shared value, companies will be able to remain relevant in society by offering products that address modern challenges.

The evolving client

It’s an age old mindset, and it particularly comes out when we are watching sports, we all think we are better selectors than the national selectors or we think that we are better referees than the man with the whistle.

This has perhaps been exacerbated by the fact that we live in the world of instant replays, player statistics, and social media forums where we can voice our perceived expertise.

“This is the world of the new client. They don’t want a broker to sit across from them once a year to tell them how their risk is rated. Clients want to see how their risk is possibly rated on a month to month basis so that they can take proactive steps in managing that risk,” says Ossip.

Welcome to the world of telematics. By using telematics, driving characteristics such as harsh acceleration, harsh braking, harsh cornering and distance travelled at night are all aspects that can be presented to clients in graphical representations where they can see how they fare in risk rated behaviours on a month to month basis.

The hypothetical situation of what would have happened if Lewis Hamilton was less aggressive or more aggressive in that corner is over. Clients can now sit, look at their driving behaviour and can make conscious decisions on their own driving behaviour. If clients accelerate, corner or brake harshly as an inherent part of their driver behaviour, their risk increases.

Risk for reward

Besides the fact that clients will now be safer on the roads, and will be able to go home to their families without the fear that they are a risk on the road, clients need to be rewarded for the fact that they are taking proactive steps to reduce their risk.

Studies show that through engagement with their risk, by looking at the graphical representation of how they drive, clients improve their driving by an average of 20% in the first year. This means that there are less claims for the insurer and a possible reduction in rates that the client will get if they take out a life policy or a medical policy with the same insurer.

This is the world of the multifaceted insurer. Ossip points out that while there is space for specialist insurers that only deal with short-term or with life insurance, there is a trend for clients to gravitate towards insurers who offer products in a range of areas.

Editor’s Thoughts:
Client engagement is key and will be a major industry driver going forward. Ossip points out that an engaged client is a loyal client because they feel that the future of their insurance premiums are in their hands. The old days where risk pricing was full of mystery and big words are fading. The days of the informed and engaged clients are rising. Please comment below, interact with us on Twitter at @fanews_online or email me your thoughts jonathan@fanews.co.za.