Insurance players must work together to professionalise the industry
Regulatory changes, legislative challenges and a drive towards the professionalisation of the financial services industry were some of the key issues addressed at the annual 2012 Insurance Conference held at Sun City from 10 - 13 June 2012.
The financial services industry does not operate in isolation. Although the majority of the delegates are ‘competitors’ we as an industry need to be aware of developments elsewhere and make use of platforms such as the Insurance Conference to collaborate and strategise, in order to make the industry stronger, more professional and sustainable.
A perfect example is the implied message from National Treasury that the industry has not really responded with an appropriate transformation effort, which is clearly a collective initiative the industry can address.
With over 700 delegates from 14 countries in attendance, the 2012 Insurance Conference - which was co-presented by the FIA, the Insurance Institute of South Africa (IISA) and the South African Insurance Association (SAIA) - allowed industry leaders to come together and discuss the latest trends and challenges facing the global insurance industry.
A key theme that emerged from the conference is that intermediaries should not degrade themselves with cheap products and services, but rather convey a stronger message of professionalism and pride. The majority of intermediaries do add value, and those who do not will have to either change the way they do business or accept the consequences.
The industry is challenged on many fronts and is faced with growing regulatory changes. We can either fight these changes, or we can choose to positively influence the processes and outcomes and be the beneficiaries of a more professional industry.
A clear message received from the conference is that the cost of compliance and regulatory processes is significantly impacting global intermediary practices, both big and small. This is likely to increase with the advent of the Treating Customers Fairly and Solvency Assessment Management regulations. Ultimately, the consumer will have to settle the bill, but surely if the consumer receives sound products and treatment from the industry they will appreciate and trust the industry and price will no longer be the defining factor.
Independent intermediaries will also benefit from a more professional environment that levels the playing field for all intermediaries who provide reputable financial services and products to be remunerated fairly and accordingly.
What is clear is that consumers are facing an increasingly complex financial environment - whether at home or in the workplace - and as risk and uncertainty grow the role of the intermediary is becoming more vital than ever before.
Justus van Pletzen is the Chief Executive Officer of the Financial Intermediaries Association of Southern Africa (FIA).