Jonathan Rosenberg, the CEO of Renasa Insurance, in conversation with COVER, shares thoughts on the past year and expectations for 2021.
COVER: Looking back on 2020 as a whole, it was tough on everyone, and people had to adapt quite fast. From your perspective, do you think that the fundamentals of our industry have stayed the same after this experience, or do you think that there’s been some sort of shift somewhere?
Jonathan: I think we’re in the process of a fundamental shift. How extensive that will be, I’m not sure yet. Some insurers benefited from the lockdown as I suppose their books were suited to low levels of activity, but others are reeling. Particularly following the court case decisions which put insurers on the line for the consequences of government action, which is a first to my knowledge.From that point of view, I would definitely say, you could almost classify the pandemic as a black swan event for the industry. So, for some, it turned out well, and for others, tough, which might require some significant change.
Generally, in terms of operations, I would think that a remote operation is less productive. A lot of people believe that being committed to fixed meeting times, having defined diary periods to address specific problems and avoiding time wasting in traffic is more effective but, certainly for me, the challenge of last year was the very many impromptu issues which arose. Many of those impromptu issues were associated with uncertainty regarding the impact of the circumstances in general in the short, medium and long term and lead to materially intensified regulatory involvement. Remote working can be efficient for safe, regular activities, but when you are faced with the impromptu issues that we’ve had to face in the past year, you cannot just walk down the passage to a colleague’s office and have a brief word. Rather, one has to pre-arrange every discussion. Spontaneous interactions are a challenge. More often than not people are either engaged in digital meetings or on the phone. So for me, where I like to operate on short reaction times, remote working was immensely frustrating and unconstructive, and I found it challenging and a huge strain. Give me the time in traffic any day, that’s how I prefer to operate.
Thankfully, we did not have difficulties from a technology perspective where we are probably, more than most who operate in the outsource segment of the intermediated market, technologically framed. Our entire base operates in the cloud making it very easy for us to switch to a remote operation. In a matter of days, we were all operating remotely and have continued to do so. In this time of lock-down we’ve settled more than 50,000 claims and made more than 60,000 payments, totaling upwards of one and a half billion rand, and in that time I received less than a handful of complaints. So, the issue is not whether or not we can operate remotely, whether or not we have a technological challenge. For me, it’s the issue of personal contact, and that applies both internally in terms of management and externally in terms of market interaction. Our management style and how we operate relies very much relies on personal relationships, which, more importantly, carries over to our intermediaries, where one of the prime differentiators is the personal service that we render, and our intent avoidance of contact centers.
I have my doubts whether business is going to return to the basis of operation we enjoyed in the past. I would think that there’s going to be some change, some difference. Whether or not that is tantamount to a fundamental and permanent change, is probably a bit early to say. But definitely, while we endure current circumstances, there’s a change of attitudes required to deal with what we have to.
COVER: So Jon, based on these challenges, which is obviously an industry wide challenge, both from an insurers perspective as well as the brokers, are there any specific opportunities that you think came out of this for brokers?
Jonathan: I would not say that there are many particular new opportunities, besides those opportunities associated with lines of business that are gaining prominence which they didn’t previously enjoy, like cyber insurance, for example. So there are some developments like that, and one hears talk that it is expected that the next Black Swan will be related to cyber attacks . So, I’d say, in terms of new products and variation of products, limited mileage cover and interesting ways of protecting the insured public in a cost effective manner, there are proper opportunities for brokers, who in many respects are the mouthpiece of our insured clients, to work closely with us to develop many of those opportunities. In short, in terms of new product and product variation, there are opportunities.
For the rest of it, I think that circumstances weigh equally on both sides. I think that due to the need to be frugal and to conserve means, many would move away from an intermediated environment and to cover which may be less comprehensive, and more affordable to them. So there’s the potential for the intermediated market to lose that kind of business but, by the same token for commercial clients and insured clients of substance, everything is more effort these days, whatever it is, whether you’re going to fill up with petrol, or you’re going to do grocery shopping, even if it’s online, it’s just more effort than it was before, so it’s easier to stay where you are, and I think that will work in a contrary fashion equally in favor of the broker.
The biggest change and opportunity for them, I think, will be to help in the exploration of new products, new forms of cover, which I think is going to continue evolving. As I said, I don’t think that we will ever return to the previous normal. I think we will have a new normal, whether the new normal will be as abnormal as the current normal, I don’t know, but it’s not going to be as normal as the previous normal.
COVER: Renasa’s has always focused on the intermediary. It has been and still is your chosen market. Based on where we are now, and the obvious experience of last year, does this still hold, and how does that carry on into the future?
Jonathan: Yes, our strategy has always been to distribute through the intermediated market, to the exclusion of all other channels. We believe in the value of independent advice which, to us, is crucial. This has been reinforced by what happened last year, the unusual, the unprecedented, the impromptu. All these challenges are unusual and very difficult for an insured client to navigate their way through without professional guidance. Our belief in the value of independent advice is reinforced by circumstances like this and, I think, as the markets develop, with issues like a cyber Black Swan, which one hears about in the halls, professional advice is even more important. When it comes to a whole new arena, which has to be considered, there’s no substitute for that independent advice. I’m not criticizing in any way the performance or offering of the direct market, but I think there are horses for courses and, when it comes to newer and more complex products, when it comes to commercial business, independent professional advice is absolutely essential. So there is no way that we will deviate from that course and, having chosen that course, in order to make way as the minnow among the whales, it was necessary for us to really perform. So the mission that we made for ourselves was to put our intermediaries in a position to outcompete their competitors. In other words, to put them in a position to bind swiftly and to settle claims with high efficiency, and above all, to do so with direct access to our senior management.
I don’t receive the calls so much myself anymore. But I’ve always said that I’m available 24/7, 365. And I can tell you that ,many has been the time that I’ve had a call at 2:30 in the morning from brokers to test me. There was of course much sniggering and giggling on those and I’m sure no small amount of alcohol involved in those occasions as well. But the fact of the matter is, I did answer the phone, and I may well have been the only one with cogent responses at that time of the morning, but a discussion of sorts was still held. So, jokes aside, the principle is that, if we are needed, we are there and the same concept as the banking industry employs with a personal banker is the concept that we employ in servicing our brokers.
So no contact centers, we have personal insurers, underwriting portfolio managers, who are authorized by us to bind on site, and today on site is digitally as well, with effective technology, delivering very quickly on the decisions that the intermediary requires.