By: Karen Rimmer, Head: Distribution, PSG Insure
The South African insurance industry that exists today is a far cry from what it was just a decade ago. Rapidly rising levels of cybercrime, and fraud, the far-reaching impact of climate change and geopolitical tensions, are just some of the developments that are helping to shift the ever-evolving insurance landscape.
By its very nature, as an industry that helps people navigate and mitigate the emerging risks that their assets and businesses face, the insurance sector relies heavily on its ability to adapt to a changing world.
For providers of financial advice related to insurance, this means always operating the in ‘beta phase’: keeping abreast of industry developments, and understanding that your role as an adviser is never static and requires consistent investment in professional development.
Arguably, the biggest required shift for advisers is one involving mindset – adopting the work ethic, technical skillset, service excellence, and management style of respected industry professionals.
The opportunities for the professionalised industry
Before 2004, insurance advisers required no formal qualifications to operate – their roles were seen through the lens of ‘occupation’ rather than ‘profession’. Today, however, advisers are regulated by the Financial Sector Conduct Authority (FSCA) which requires them to not only be qualified to gain entry into the sector, but also subjects them to mandatory, continuing professional development (CPD). Additionally, there is further planned regulation like the Conduct of Financial Institutions Act (CoFI) on the cards.
Regulatory and institutional bodies regard advisers as professionals. It is now up to advisers to build on their value propositions as professionals.
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Insurance through the lens of business
Advisers have always needed to become specialists and product experts. Now, they are so much more – they are also generalists and industry experts with the ability to see the bigger picture. At the core of how the best advisers operate are excellent problem-solving skills, which as it were, is also the hallmark of successful entrepreneurs.
The shifting, changing nature of the industry has produced advisers who are equipped to solve problems creatively and in doing so, to meet their clients within the context of their unique needs and lifestyle circumstances. These developments necessitate that advisers conduct themselves as both professionals and astute businesspeople.
For today’s advisers, this means employing good business practices, including building a strong professional network, nurturing relationships with reputable insurers, and leveraging valuable resources that can cut through the complexities of the insurance environment.
Advisers in the ‘business of insurance’ also need to consider the liability as it applies to their professional conduct and employ methods to mitigate risks such as professional indemnity claims.
Succession planning is another key factor that relates to the business of insurance. This involves the implementation of policies and procedures that will ensure the longevity of your advice-led business and the retention of clients across generations.
Furthermore, with the focus shifting towards the importance of customer experience and the well-being of clients, now is a time of great opportunity for advisers who can work towards offering tailored solutions to new and emerging risks.
In an age where digital technology has served to divide people as much as it has united them, consumer demands a personalised level of service. This now requires advisers to become nothing short of proficient at managing their portfolios and segmenting their practices to provide clients with individual attention.
In addition, as professionals, advisers need to invest time, money and resources in establishing and maintaining a well-run office and client service environment. The quality of support staff, for example, has become a crucial aspect of running a successful advice-led business in the insurance industry.
The nature of the insurance environment will always be complex and demanding, but within these challenges lie many golden opportunities for advisers to establish themselves as seasoned and respected professionals who are capable of running efficient, future-proof practices and add value for their clients.