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South Africa’s intermediaries are not unique or alone in the world

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FIA president, Peter Olyott, and CEO, Lizelle van der Merwe, recently returned from the World Federation of Insurance Intermediaries (WFII) World Council Meeting in Lisbon with a positive outlook for the global intermediated insurance market.

The meeting was attended by intermediaries and intermediary bodies from around the world, as well as key stakeholders such as the International Association of Insurance Supervisors (IAIS), European Supervisory Authority (EIOPA) and the Organisation for Economic Co-operation and Development (OECD).

The drive for regulatory convergence by key stakeholders such as the IAIS requires industry bodies, including WFII and the FIA, to work together towards building sustainability, trust and confidence within the intermediated insurance sector.

“Overall there is a strong sense of optimism for the future of the insurance intermediary,” says Van der Merwe. “Delegates agreed that intermediaries add value to the global insurance economy and that the intermediated market is stable.”

However, there is also a strong sense that the environment is changing and that the role of the intermediary should evolve to keep pace.

“The feeling at the conference was that the intermediary sector has to take ownership of its own future,” says Van der Merwe. “We need to consider both the anticipated regulatory landscape – driven primarily through the protection of the interests of individual consumers and small businesses – and the technological, socio-economic and environmental changes influencing the consumers of insurance products and services.

“These are not unfamiliar imperatives to us. Brokers across the world face the same challenges that we do here at home – and so getting together to talk about our common issues and share ideas was hugely beneficial for us.”

Issues covered included:  

  • Digitalisation
  • Development of intermediated businesses across all sectors of the economy
  • Understanding the economic impact of risks and providing guidance to consumers in respect of risk prevention and mitigation   
  • Regulation (there is consensus that our industry is over-regulated and under-enforced)
  • Compliance (the overwhelming majority of participants believe compliance promotes trust and confidence in business)
  • Recruiting and retaining key staff

Liberalisation, governance and catastrophic risks were considered the least important issues facing intermediaries around the world, while healthcare was mooted as a growing market for intermediaries.

One issue that we have on our radar in South Africa that doesn’t appear on the international agenda is that of remuneration.

“Most participants said there was no discussion or proposed regulation regarding intermediary remuneration levels,” says Van der Merwe. “Given that this is a current discussion point being mooted by our regulators, it is not inconceivable that this aspect could be raised at an international level. It is in our interests to monitor whether this occurs.”

There was also a general discussion on the importance of industry bodies like the FIA, as well as the common issues facing such bodies, including membership value and member apathy.

“We realised at the conference that we in South Africa are not unique or alone in the world,” says Van der Merwe. “There are many lessons we can learn and experiences we can share to promote the intermediated market, both at home and abroad. Our participation in Lisbon confirmed the importance of our association with the WFII and continued engagement with international regulators on behalf of our members.

“We will continue to keep members informed of the latest global trends through our regular email communications, as well as on our blog and via the FIA Insight magazine.”