Advancing technology, ever-changing customer buying patterns and regulatory changes. These are just a few factors that are majorly impacting on the short-term insurance sector, causing uncertainty for both insurers and intermediaries. However, it also provides great opportunities to evolve and seize new opportunities.
Santam is, as always, hugely invested in its intermediaries and committed to helping you flourish in a tough trading climate, which is why we’ve identified 7 main industry changes you will likely see over the next few years:
1. Remuneration structures: If implemented, intimated changes to intermediated remuneration structures will drive greater diversification of services offered to the customer. There will be an increasing focus on providing incremental risk management and value-added services for fees. We expect innovation here not only in the sales and advice space, but also in incremental services being offered to support the customer at claims stage.
2. Moving up the insurance value chain: Aligned to their increasing professionalism and expertise, we anticipate a move by intermediaries up the insurance value chain, with less focus being placed on commodity personal lines – specifically motor stand-alone business – and more time being spent on higher value and more complex needs and solutions.
3. Administration belongs to insurers: We anticipate that intermediaries will aggressively push administration back to insurers - driven by regulation changes and aided by the focus on higher value premiums. They will become more focused on the specific differentiators of their own practices, and will require insurers to step up to meet the needs of their businesses and those of their clients. We expect a renewed drive and investment by insurers in these capabilities.
4. Focus on technology platforms: With the limitations proposed on outsourcing, the capability of in-house insurer technology platforms – specifically client and broker portals – will differentiate ease of use and will become strategic differentiators for insurers. We also expect significant investment by insurers in this area in the short term to protect and or grow market share.
5. Independent administrators in the market will offer efficient multi-insurer IT solutions and who operate at sufficient scale are expected to expand incrementally. They will provide smaller intermediaries with access to more efficient ways of working, and improved finance and compliance support.
6. The importance of data: Detailed and accurate data is important for sustainable underwriting. The cost of the attainment and protection of such data on outsourced platforms will mean faster industry adoption of data exchange standards and likely the use of an industry switch to be sustainable (such as is in place within the banking, medical aid and life industries).
7. Multi-channel distribution will gain relevance as intermediaries require different support structures for different value offerings. This will result in the incremental growth of referral solutions, service centre (not just call centre) solutions, agencies and franchises.
Even though the short-term insurance landscape is transforming rapidly, there’s one thing that won’t change; intermediaries will remain relevant. Intermediaries continue to offer market-leading customer value propositions in especially high net worth personal lines, commercial, corporate and specialist business.
To get more advice tailored to intermediaries, visit our blog. You can also read how the global insurance industry is evolving and what insurance industry trends will be coming our way. Get in touch with your relationship manager or contact us if you have any queries about Santam products.