Marrying technology with youth empowerment to bring about inclusive risk cover

Marcel Wood, Head of Risk Management at Hollard Insure

How can risk management professionals evolve their offering to adapt to an ever-changing risk landscape? One way is to embrace a new, technology-driven era in which they can work with customers to mitigate their risks in a more cost-effective manner – particularly when it comes to the small business sector.

It’s imperative for insurers to find new ways to make risk assessment more affordable to all businesses – not just the larger ones.

Many businesses, especially those with less than R20-million in insured assets, do not have a proper understanding of the risks their specific operation faces. This is why it’s so important to know where they are most vulnerable and how they can mitigate or manage these risks.

Complacency around risk is a major challenge – having a fresh set of eyes assessing your risk is critical to effective risk management.

The problem comes in when small enterprises are not properly covered – yet they arguably need proper risk protection the most.

The reality is that many smaller businesses have not had a proper on-site risk survey conducted by a professional risk consultant at their premises. This is a time-consuming, specialised and expensive task, and one that many insurers don’t consider cost-effective to offer to enterprises with a low sum insured.

But when risk isn’t properly assessed and priced for a whole bracket of insurance customers, it disadvantages everyone. And so, if you’re a risk consultant, you may just have to fundamentally shift how you approach assessments – including harnessing the power of technology to help you render the best service.

Hollard Insure has introduced RiskMen to address this very problem, helping clients who fall within the R3-million to R20-million insured threshold to better understand and manage their risk. This project turns the traditional approach to risk assessment on its head, while still retaining the expertise of the broker as the intermediary.

Instead of employing specialist consultants, RiskMen equips young, semi-skilled men and women with Hollard-branded scooters to zip through traffic to the customer, saving time, petrol and other car-related overheads. Each of these young people has an intelligent risk assessment app, which they can access through their smartphone.

This intuitive app enables them to survey the policyholder’s property and provide a comprehensive report that is immediately available to the underwriting staff back at the office. It dispenses with the need for all the equipment that a skilled risk consultant usually comes with, such as a laptop, camera, voice recorder, GPS device and so on – making the process quicker, smoother, smarter, and cheaper, thereby making the survey cost effective.

It really is so empowering to both the young people and their customers. Firstly, these young people now have the benefit of both employment and the opportunity to develop over time into fully fledged professional risk consultants, supported by training.

And on the other side, the customer gets a proper assessment of their risk, so they can both manage and mitigate risk according to their specific needs. It’s a great example of how technology can be harnessed to build better futures and make insurance more accessible than before – while making the customer’s business more resilient.

It also makes it easier for Hollard to assess and then insure the business accurately and cost-effectively, improving its ability to price risk better.

Another example of how technology is assisting with risk mitigation is the growing field of off-site monitoring of properties through artificial intelligence (AI). A smart system “learns” everything it needs to about your environment, and then raises an alert in your security company’s control room if it picks up abnormal activity, such as people entering your property who are not wearing recognisable security uniforms, as an example.

Brokers remain an integral link in the complex risk management chain and it is still essential for business owners to maintain strong relationships with their brokers. They can unpack the technology behind initiatives such as RiskMen, AI-driven off-site monitoring and infrared technology, and advise customers on how best they can mitigate their risk and avoid incidents that could potentially cripple their business.

Brokers are the customer’s representatives and advisers. They play a crucial role in making sure that a customer’s interests are both represented and understood. If, for example, you have a fire or theft at your premises, it will be hard to fully protect your market share and reinstate your business. So it’s crucial to not get to that point and to harness technology to prevent perilous events and protect your business.

Customers are under tremendous financial pressure and brokers can find and recommend solutions that meet their needs while not exposing them to further risk.

This is truly where the broker’s knowledge of the customer’s business, and expertise about the industry and risk, really become critical to the business. When the risks facing a business are well understood, you can have a better conversation around what the best solutions are to mitigate these risks in the most cost-effective manner.

So, while technology can now be harnessed to bring more small business customers into the fold of proper risk cover, the broker-customer relationship remains paramount in facilitating a risk assessment, which protects everyone – from the customer and their business to the insurer.

But if you can simultaneously upskill previously disadvantaged young people to play a role in the risk assessment process at a time when work opportunities are scarce, so much the better – truly a win-win-win situation.