Ian Kirk, Chief Executive of Santam, says that clients are prepared to pay for a service they value. There is a lot more that one can do with the face-to-face model that cannot be done over a telephone," he says.
"It is something to be used to differentiate and position oneself from direct marketers. The question should be 'what do we offer that the others do not?' and then to make sure that the advice is appropriate.
"If insurance advisers trust the advice they offer, they should be prepared to charge for it. Clients will see the value and be willing to pay for it," Kirk says.
Rikus Visser, Chief Executive of PSG Insure, says this is not the only option for South Africans who want the special personal touch. Instead, good and reputable brokers provide clients with helpful advice and tailor-made solutions.
"We can better understand the needs of our clients and provide tailored solutions to meet those needs. Our products and services offering remain superior," Visser claims.
"The key strength lies in face-to-face advice service to clients. Serving our clients remains our first priority, especially during the claims process. That is where our clients will really benefit from an intermediated model," he added.
Dan Hugo, Chief Executive of PSG Distribution, says brokers are about serving the client and not so much about competing with direct marketers, which are more price related.
"Clients are prepared to pay for quality service. This is where a brand like PSG comes into play. People want to do business with us because of reputation and there are many clients out there who prefer to do business on a face-to-face basis," Hugo says.
Willem Smith, Chief Executive of Old Mutual iWYZE, says one solution to rising costs in the personal lines side of the industry is to increase the size of the pool of the insured so that costs are shared across a larger number of people.
"We are keen to grow the personal lines market. So we are targeting emerging consumers, namely people who have never had insurance.
"As people's incomes rise so they begin to acquire homes, cars and other assets that they want to protect. However, as these potential customers have not used insurance in the past there is a large education and training component in addressing this market," he says.
Another factor is the brand. Insurance is not tangible but rather a promise to pay in the future if catastrophe strikes and this makes trust a key component in the buying decision, trust that the insurer will keep its word and trust that it will still be in business to fulfil its obligations.
"Leveraging off a trusted brand means you have to offer good value but you do not need to be the cheapest in the market," Smith says.
Source: Business Day via I-Net Bridge
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