Suzanne Stevens, our CEO, BrightRock
Although we spend a lot of our time at BrightRock thinking about change and understanding how we can enable people to embrace the opportunities that are inherent in every change, it is astounding to reflect on how much has changed over the past year.
At a macroeconomic level, the picture for South Africa’s economy is starting to look very different after the political and economic uncertainties of the last five years. Heading into 2025, we are starting to see improved levels consumer and business confidence levels, and economists are predicting an improvement in exchange rates, interest rates, and inflationary pressure.
The life industry has proved resilient throughout, with the most recent industry statistics and surveys confirming that life insurers are robust, well-capitalised, and well-managed. Most importantly, our industry has looked after clients – in its latest industry report, ASISA confirmed that insurers paid over R298 billion to South African families in just the first six months of 2024.
While affordability pressures and rising claims, as well as an increase in fraudulent activity, have contributed to some concerns around sales growth, lapse rates, and underinsurance, these challenges also present opportunities. We believe there is enormous opportunity for our industry to fully embrace new technologies in order to keep up with our clients’ increasing demand for high-quality, personalised products and services.
In this environment, there’s no doubt that opportunity exists for insurers to harness their assets to drive innovation and create products that are more dynamic, efficient, and sustainable – in turn enabling financial advisers to deliver better product solutions that match their advice to clients. There’s also opportunity for insurers to leverage emerging technology and data access to deliver better service, reduce hassle and improve transparency and communication with clients.
In terms of practical advice for our financial advisers, these same opportunities exist for them too. Consumers place high value on trusted, independent advice delivered by experts. But they are also looking for convenience and a proactive approach – an adviser who is proactive in reaching out and flagging key developments that may impact on individuals clients – from milestones like a child achieving the age of 18, as an example, to new regulations that may affect clients’ needs. Clients want their adviser to use technology to schedule appointments and fill out paperwork but still value personal communication that is clear, concise, and tailored to the client’s unique circumstances and needs. Alongside these client-centred imperatives driven by technology and evolving consumer demand, financial advisers need to stay up to date on regulatory changes impacting the industry.
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In addition, our industry has seen a focus on liquidity and capital management, market conduct, the impact of technological advancements – including grappling with complex issues arising from an increasingly connected world, such as data protection, cybercrime, and financial terrorism.
Regulators are enforcing stringent compliance with money laundering, terrorist financing, and proliferation financing requirements, as part of a major drive towards the removal of South Africa from the Financial Action Task Force (FATF) grey-list. As such, advisers will be impacted by the need for accountable institutions to identify and verify their clients and actively monitor and mitigate against financial crimes – including the recent PCC 59 guidelines published by the FIC focus on the process for Accountable Institutions to identify the beneficial owners who hold more than a 5% share within legal entities, trusts, partnerships, and non-governmental organisations.
National Treasury has indicated that the COFI Bill could be tabled in parliament in the first quarter of 2025, so it’s vital that financial advisers and insurers alike prepare themselves for its implementation. The Bill aims to consolidate various laws and regulations into a single set of conduct regulations for all across all financial services sectors and segments, creating a consistent market standard to uphold TCF. With the recent implementation of the Employment Equity Amendment Act and the fact that another central aim the COFI Bill is to enforce transformation and financial inclusion requirements, the issue of financial inclusion will be high on the agenda for our industry in 2025.
Lastly, it is well worth noting how acutely the Information Regulator is policing POPI compliance. As such, both insurers and advisers will need to keep issues of data privacy and protection on their radars throughout 2025.