The Insurance Institute of Gauteng, in association with The FIA held the 2018 IIG Broker Leadership Forum on 17 May 2018, at Fairlawns boutique hotel. The FIA was proud to be a part of an event of such great calibre – comprised of industry leaders and exceptional speakers engaging in conversations about the future of insurance and how it affects brokers.
Below Natasha Maroun, IIG councilor shares a recap on the event, as well as links to presentations from the speakers.
The Broker Leadership Forum is an exclusive by-invitation-only event that brings together a group of influential broker principals and executives. This forum provides you with the opportunity to listen to insights into leadership strategies around this year’s theme, The Future of Insurance!
On 17 May 2018 your IIG hosted the prestigious broker leadership forum at the beautiful Fairlawns boutique hotel. The forum was on invitation only and Allianz, our generous sponsor ensured that our guests were treated to the best speakers, food and networking for the morning.
Our IIG president, Daniel Stevens, welcomed the guests and reminded them about the other amazing events the IIG has hosted so far in 2018. He also informed every one of the best that is yet to come:
- IIG Insights: Riding The Storm on the 21st May 2018, and Property and Motor on the 21st June 2018
- Spinathon will take place on the 16th August 2018, and the industry’s opportunity to raise funds for charity at the annual Cycle For Charity event.
- IIG International – there are only 5 seats remaining on this years ultimate Education and Networking tour to Zurich and Amsterdam.
He then proceeded to introduce Lizelle van der Merwe, the CEO of the FIA. She gave the audience food for thought on ‘How the intermediary sees the insurance industry evolving’ It was agreed that whilst regulation was important it is not what gets us out of bed and proceeded to discuss the insurance industry outlook she was privileged to experience first-hand whilst attending a recent conference. She informed our brokers of a few interesting, pertinent points of discussion at this international conference:
- The insurance industry will see a growth on intangible risks. Steinhoff case in point.
- Customers in our ever changing environment want and need more dynamic products.
- Growth of new risks i.e. cyber risks is at a pace far exceeding the pace of product innovation.
- Customers are becoming more sophisticated and hiring their own risk managers.
- Despite the hiring of their own risk managers, customers still want the ‘expert’ advice before making buying decisions.
- Income equality calls for rethink on market growth strategies.
- Digitalisation calls for a different approach to regulation.
She reiterated that intermediaries are very important to the South African economy as many products are complex and customers therefore need advice. Small to medium businesses in South Africa are made up 40% by the intermediary businesses and therefore they are vital for economic development. The intermediary environment can create more business incubation support to develop BEE initiatives in our country.
Our next speaker was Thusang Mahlangu, CEO of Allianz (AGCS) who had some very interesting views on the future of insurance. Due to digitalisation the demands of customers are changing and therefore the customers’ behavior patterns are changing. Access to mobile devices in other industries sees customers also wanting to be able to access the insurance industry offerings through their mobile devices. Whilst many jobs have been lost due to digitalization, many new jobs have been created. Underwriters he informed will most probably be client facing in the future and not back office staff. Underwriters will have to become innovators and learn to work with data.
Next speaker was Michele Williams, Head of XSE, from Allianz in Munich:
Michele started out as a mechanical engineer and her area of expertise in insurance was fire and explosion. She found experimenting with tech and data to move forward in the insurance industry fascinating and finds herself in the area of smart evolution. She shared three predictions for the future with our guests:
- Insurance products will look completely different i.e. our children will not all be driving cars in the future. Who will be held responsible for accidents in future? Tech systems or industry 4.0 means systems are constantly speaking to each other. Intangible assets will be affected, Facebook and Twitter are very good examples. As the insurance industry we would have to be flexible to change our products often.
- Existing roles will be gone and new roles will emerge. A good example is bloggers. They are now a gainful employment opportunity. How does the insurance industry protect a company from wrongful or detrimental blogging against them?
- Service platforms will play a central role in conducting business. Apps are already widely and successfully used to deliver services and this will be expected from the insurance industry.
The future of underwriting will mean embracing data, use insights from data, be away from a desk, interact more with the broker and the client and adding a different type of value, than that traditionally expected. In short the future underwriter will be a sales executive, a decision scientist, a customer advocate and an innovator all in one. Furthermore online portals would have to give access to policyholders to their data and offer insurance on demand without long waiting periods.
Data analytics will improve underwriting in the future and the customer service element of our industry, i.e. claims, will be improved greatly by advanced tech.
Click here for the full presentation: The transformation of insurance
Our next speaker was Michael Bruch, Head of Emerging Trends, from Allianz Germany:
Michael has a risk engineering background. Disruptive tech and its impact on risk management and insurance is where his expertise lies and where he spends most of his time.
The well-known Revolution 4.0 was introduced to the audience with an interesting video. It was clear that our industry would have to adapt, be flexible, faster and be continuously educated to meet demands of continuous change. Specialisation will be the order of the day. One employee, one task.
Careers in IT, electronics, automotive industry, transport, logistics, healthcare and energy will be sought after and industries that will not have the same following will be – retail, telecoms, media, finance and construction.
Michael suggested that there is weak artificial intelligence and strong artificial intelligence coming out of the tech revolution. Strong AI typically takes into account some element of human consciousness; a sense of emotion is included. He suggested that autonomous driving currently is the most advanced AI. 90% of motor vehicle accidents are due to human error. Sophisticated combinations of sensors and AI software are required for certain decisions. Our roads could be safer, new liability covers would be needed and platforms based cover would become more important.
Michael discussed the top business risks he foresees in this bright new age of tech:
- Business Interruption
- Cyber incidents
- Natural Catastrophe’s
- Market developments that include: new entrants, competition and disruption
- Changes in legislation and regulation
- Fire and explosion
- New tech’s
These risks could result in significant increased non damage BI losses i.e. cloud disruption also known as cyber hurricanes. Some cyber events will be as severe as major CAT events. Cyber losses will be caused by mostly human error/employees, not cyber-attacks. Customers will go to best AI informed companies and where new risk management services have been introduced.
Click here for the full presentation: Future and long-term risks
A very lively question and answer session ensued and it was clear that we have some challenges as an industry, as a country and as a world:
- Tech is it, but insights from humans will always be necessary and a partnership between tech and people will be the answer.
- Many jobs will be lost, but many jobs will be created.
- Direct access will be offered through platforms, but the broker will remain critical as they offer an independent view.
- A global strategy is needed, but different continents will have to be differentiated, despite collaboration.
- Education systems worldwide will have to change to be ready to deal with the tech revolution.
- Industry training and skills development similarly would have to change to ready itself for the tech revolution.
It was agreed that the only way to deal with the unknown is to use what we know, scientific information to create a picture on predicting possible losses. A price could be established but will most definitely change as the experience of the unknown develops and changes in the future.
In short Allianz is ready, the brokers are ready, your IIG is ready…TO BOLDLY GO WHERE NO MAN HAS GONE BEFORE!