The World Federation of Insurance Intermediaries (WFII) conference took place on the 13th and 14th of June 2022. The FIA was represented by Butsi Tladi (FIA President), Lizelle van der Merwe (CEO) and Sam Williams (Head of Legal & Regulatory Affairs). The conference was well represented by all broker associations across North and South America, Europe, UK, Canada and Australia, the only jurisdiction not represented was Asia due to stringent Covid entry and exit requirements from China.
Patrick Gallagher from Gallagher Insurance, Risk Management and Consulting Services has been elected as the new President of the WFII. Gallagher is a global insurance brokerage which serves communities across the globe.
When reviewing the WFII Activities Report, the following key points were noted:
At the IAIS (International Association of Insurance Supervisors) Annual Conference in 2021, the following strategic themes are on the radar of regulators all across the world:
- Climate Change and Climate Risks
- Cyber Resilience
- Conduct and Culture of FSPs
- Financial Inclusion
- Sustainable Economic Development
- Equity and Inclusion
The strategic themes align to what is developing in the SA market.
The Organisation for Economic Co-operation and Development (OECD) identified 2 new high level Principles of Financial Inclusion, these are as follows:
- Access to financial products
- Quality of financial products
The biggest issues on the United Nations radar include Environmental Social and Governance Risks (ESG). The other is to activate the insurance industry’s role as a risk manager. Note – we must be cautious that brokers are not left with the burden to ensure clients meet the ESG underwriting requirements.
When reviewing the key issues in the various broker associations jurisdictions, these were very much aligned to what we identified in South Africa i.e.
- Societal Risks
- Overburdened Regulation
- Reputation / Succession Planning
- Cyber Crime and Cyber Security
- Direct selling
- Hard Market
- ESG risks
There was general concern from most representatives that the war between Russia and Ukraine will continue to have adverse effects on energy, fuel prices and rising inflation.
The following themes were identified for FIA consideration and debate:
- There was a general concern regarding market capacity. The North America trade association is considering a captive for property risks.
- Talent and Technology remain a key concern for most associations. South Africa is not unique in its challenges.
- ESG regulation has already impacted the European market and we expect to see an impact on the broader industry in SA in the very near future. How will this affect advice, how will this affect the skills and expertise of intermediaries, how will this affect the cost of insurance and market capacity? How do we incentive clients to achieve net zero?
- Business Interruption and Cyber Risks remain a general concern. In particular, exclusions of coverage as risks are changing rapidly.
- There was a discussion regarding availability and affordability of insurance in general (which is linked to point 4 above). How do we plan for this in the future?
- Political instability is a major concern for the American market as well as South Africa.
- Broker remuneration was identified as a threat in most markets. In Australia the regulator is undertaking a “Quality of Advice Review”.
The presentations and associated documentation can be found below: