By Lizelle van der Merwe, CEO of Financial Intermediaries Association
The Good
Last year was a productive year in which we worked incredibly hard to improve and evolve our service offering to members and partners. We fully digitised our CPD offering and training to members; we changed how we conduct our meetings and events, and how we share guidance notes and important industry information with members. Online platforms, such as Zoom and MS Teams, have also enabled the FIA to be inclusive and more productive. At our annual AGM, Advisory Council meeting, and various member meetings throughout the year, feedback from members was positive with regards to the FIA’s performance.
The FIA’s rapid response to Covid-19 and the impact on broker commissions saved the broker community millions of rands in commissions and fees due to premium holidays. The FIA’s CPD offering was made available online where previously it was limited to members attending branch meetings. The FIA was also recognised by members for the positive manner in which we managed the organisation’s financial
position during Covid-19. Savings from travel and face-to-face meetings were used to invest in online platforms to manage meetings and events and to develop a consumer education campaign to the general public promoting the important role of an FIA intermediary. We have also seen a significant increase in our online presence and engagement with members on platforms like LinkedIn, Facebook and Twitter.
Our quarterly, CPD-accredited, FIA Insight magazine, has gone digital and now includes interactive video and podcast elements. The increase in online engagement can be attributed to the sharing of crucial information on these platforms using various media channels, which we will continue to drive in 2021. All of the above was necessary, as the market is struggling.
THE PAIN POINTS
The economic stagnation was and still is a big challenge for our industry, which means there is no underlying growth in the market. While economic sector recovery plans are underway, the second wave of the pandemic is more severe and will take a long time to recover from. Regulatory changes are ongoing and with that comes uncertainty about the future. Members continue to raise red flags about the volume of regulation considered to be disproportionate to the risks facing consumers and the industry at large.
Technological disruption from Covid-19 was a big one for members. Intermediaries are very relationship-driven and it was disruptive for many to convert their engagements from face-to-face to virtual, but it was also beneficial in many ways.
Managing staff and company culture in a virtual environment is a tough one. Members were forced to rethink their sales approach (how to attract and grow business) and organisational structures to ensure they operate efficiently and effectively through the lockdown period. Many of our smaller members don’t have a CFO to assist them in navigating these challenges. The societal impact of Covid-19 means that many South Africans are falling further into debt and reducing immediate nonessentials, such as their short-term and life insurance policies. Households and businesses are increasingly focusing on disposable income, which also means greater sensitivity to price.
During this uncertain financial time, many clients have accessed their savings and investments, which undoubtedly has impacted our members’ earning potential. This trend is likely to continue into 2021/22 as we grapple with Covid-19 and its repercussions. Small member businesses that were dependent on new business and upfront commissions were negatively impacted, however, businesses with recurring income, particularly in the non-life industry, managed to weather the storm in 2020.
Most of our member businesses are well established. Members were also under significant pressure navigating business interruption (BI) claims. The FIA hosted a workshop with members to assist in managing their professional indemnity exposure. Another BI training workshop has also been scheduled for later this month to upskill members and position them to better educate consumers on these particular types of systemic risks.
Members with concentrated business in specific market segments, such as low-income earners, the hospitality sector, or the elderly, were forced to downscale operations. Members are uncertain, as we all are. We will have a better idea of ground sentiment following the first round of executive committee meetings coming up in February, where we will assess priorities for the year ahead.
INDUSTRY RESPONSIBILITIES
Covid-19 has accelerated business transformation, and while we are dealing with a serious crisis, it has presented us with an opportunity for organisational change. Together with our research partner, Ask Afrika, and our 2020 sponsors, we designed an industry engagement study, which focused on understanding how the FIA and insurers are able to improve our support of intermediary businesses. The key outcomes were as follows:
• Enabling a better/improved claims process
• Enabling a better/improved underwriting process
• Improved training on new product offerings
• Providing new/additional methods to attract and onboard new clients
As an industry, we must work together to rebuild trust with our clients, which has further suffered due to the business interruption saga. Intermediaries, supported by insurers, must take accountability for educating the consumer to better understand their risks and policy coverage.
FIA PRIORITIES FOR 2021
Based on the industry engagement survey conducted by Ask Afrika in 2020, our members have indicated the following areas of importance to help them navigate their business through the pandemic crisis. Improved levels of advice to help clients make informed decisions. Considering this, online CPD training will remain a key priority area for the FIA in 2021.
Members want to assist clients with their claims handling and resolution process. The FIA will continue to represent our members on all levels, across all constituencies, to ensure stakeholders understand the intangible value of an intermediary when a claim occurs.
Members want to improve their risk management advice to clients. This again highlights the need for the FIA to host discipline-specific workshops, in respect of known and systemic risks, to educate our members.
We are implementing new systems to communicate more effectively to our members our plans, successes and challenges.
Ongoing professional representation of this integral market segment remains a key priority for the FIA. The challenges of transformation and the increased support of SMMEs within this market segment must be addressed.
We are currently working on a market intelligence tool with our partners, Linktank and the Data Company, which will help members make better-informed decisions when placing a risk or investment with a particular insurer.
The tool evaluates the insurer’s solvency ratio and operating costs in line with market averages; an ombud analysis; as well as a sentiment analysis based on public perception of a particular brand. This tool will be of significant value to members and consumers.
The FIA will remain agile to ensure we continue to evolve as the needs of the industry, consumers, and intermediaries change.
