April Edition 2023

KYC:KEY TO ANY BUSINESS

Insurance is all about risk; identifying it, understanding it, quantifying it, pricing it, and managing it.

Tony Van Niekerk

When it comes to SME insurance, knowing your client is knowing his/her business. You need as much information as possible, on a continuous basis, to track the client and by proxy your, risk exposure. This brings to the fore a variety of specific touch points that should almost form the pillars of your brokerage.

Firstly, it starts with the client relationship. Establishing the relationship and nurturing it over the period of your relationship. Clients will only share personal detail about themselves and their business once there is a trust relationship, which takes ongoing work. Regular engagement is crucial here and technology can play a key role to keep the contact.

Client relationship should also focus on education as that will play a crucial part in managing the risks they face in the business. They almost need to understand the risk as well as you do, which can only be achieved with regular, in-depth discussions, whether online or in person.

Secondly, it is all about information, or data. With large client bases, most brokers do not have the capacity to carry all the client knowledge in their heads or on their systems in fragmented pockets. Advisers need an effective way to collect, store and maintain the latest risk information on their clients. That does not only mean standard demographic information but up to date information on client risk and how the factors that affect the risk profile change.

Lastly, skill. Brokers need to build the needed underwriting skills into their businesses. This goes right down to the lowest level in the business. Each section of the business needs a level of industry knowledge and skill, suited to their responsibilities, in the areas of communication and the various facets of understanding risk.

“When it comes to SME business each of these three pillars can become overly complex due to the variety of types of businesses that brokers must deal with. Technology solutions can assist to a considerable extent, but the human factor simply cannot be ignored. This is exactly where the advantage of the broker comes in and the area where brokers need to focus.”