The time for Advice is Now.Tony van niekerk
We dedicated this issue to advice, because advice is the backbone of the insurance industry, both long term and short term. The past 12 months have again shown that advice is at the core of ensuring our clients receive the value that we as an industry are able to add
COVID affected each and every one, from business people and employees to small business owners and governments. Nobody really knew how this was going to play out. Even today, 12 months since COVID first became a reality, we are uncertain about the future, about whether there will be a third wave and we are uncertain whether the vaccines will have the so-called herd immunity effect.
The essence of what we do is about risk, we determine and manage risk and we manage it on behalf of our clients. The whole purpose of what we do is to try and ensure that whatever the plans of our client are for the future, that those plans can come to fruition as close as possible.
When we look at the long term industry, including financial, investment and retirement planning, we deal with long term uncertainties. You cannot change the reality for your clients when you’re dealing with economic, political and health uncertainties, as at the moment, but what we can do is to assist them to plan in the best way possible.
We can ensure that, if certain events or uncertainties unfold in their life with regards to job losses, temporary or permanent disabilities, critical illnesses or death, we can assist them to navigate the fall out. When it comes to short term insurance, the challenge today is that the risks have become highly complicated and enormously uncertain. If we just look at recent business interruption challenges due to COVID as well as the massive increase in cyber risks, especially within a hyper-connected world, uncertainty is ever escalating.
What happens in Japan can affect a business in South Africa. It can close the doors of a business in South Africa for a period of time when there is an interruption in a supply chain. It is therefore clear that our clients rely on us to understand the risks and see the bigger picture.
Effectively, when we look at the industry as a whole,
both long term and short term, the essence of what intermediaries do (financial advisors, financial planners, brokers), is about really understanding the client and his/ her environment, analysing potential risks involved, and then designing a risk mitigation strategy.
Flowing through from this is our ability to communicate clearly and effectively to ensure clients are fully aware of the risks they face, what they are covered for and where the gaps still exist. If we do not follow through with this final step in our advice process, there is a great chance our clients will be disappointed due to their expectations not being met.
To build trust in the industry, advice needs to be solid and communication clear. We have the products, the skills and the tools. We must just apply them proactively and effectively.