The South African life insurance industry, in collaboration with its financial adviser community, is poised to overcome the challenges brought on by the pandemic and capitalise on new opportunities that lie ahead.
Evan Baars, a partner at NMG Consulting, highlighted that while Covid-19 has heightened the public’s awareness of the importance of life insurance, the industry is yet to regain its pre-pandemic sales figures. The hurdles primarily stem from affordability issues, complex onboarding processes, and escalating regulatory demands.
Addressing a nationwide adviser roadshow hosted by Bidvest Life, Baars emphasised that although the macro-economic climate remains challenging, savvy advisers and insurers who can embrace the chaos have the potential to revolutionise the way business is conducted.
What clients want
“In our assessment, the life risk market will stabilise, and growth will hinge on improving the ease of doing business, provided that regulatory pressures do not intensify,” said Baars. “With enhanced ease of business and favourable regulations, we anticipate a growth rate of approximately 3-4% annually. Affordability takes centre stage as the primary factor contributing to decreased life risk sales (cited by two-thirds of advisers). As a result, there is an increased focus on price at a time when clients face reduced disposable income.”
There is also clear demand for simplicity. Products should be easily understandable, onboarding processes should be frictionless, and claims must be processed swiftly and hassle-free. Other concerns weighing on the minds of advisers include the state of the economy, power outages, and an ageing client base. While technology can offer assistance, maintaining strong relationships and receiving support from insurers remain paramount.
“Across the board, ease of business emerges as a central focus, likely to be achieved through technology investments and robust relationship management. It is crucial for insurers to aid advisers in overcoming their challenges and facilitating business growth by streamlining the sales process and enhancing overall efficiency,” explained Baars.
Making things easier
During the roadshow, Bidvest Life’s Chief Product Actuary, Nic Smit, accompanied by Training Specialist Melody Cloete, underlined the insurer’s commitment to fostering simplicity across multiple touchpoints. “When you engage with your clients, it should be a lifelong relationship. We want advisers to trust that Bidvest Life will support them every step of the way,” said Smit.
Bidvest Life’s online application form expedites the submission of new business cases, enhancing the sales process for advisers. “Our Fast-Track Events provide claim speed and certainty through quick, hassle-free pay-outs for a predefined list of common injuries, illnesses, and impairments,” added Smit. “Last year, up to 86% of Bidvest Life’s Income Protection claims were paid through the Fast-Track Event criteria.“
More affordable cover
Bidvest Life has various mechanisms built into its product to assist clients with affordability concerns. For example, income benefits offer a more cost-effective option compared to lump-sum equivalents. Recognising that clients may have a genuine need for income protection but face budget constraints, they’re encouraged to at least cover their essential monthly expenses rather than their full salary. Adding the Future Cover Protector benefit allows them to increase their cover later, without medical evaluations. This approach ensures sufficient coverage without the risk of being declined additional cover due to past claims or changes in health. Another way for financial advisers to help their clients manage affordability is to split cover across multiple waiting periods, which reduces a client’s premiums while maintaining claim certainty.
“Ultimately, relationships are the cornerstone. It’s essential for our industry to maintain a personal touch. In addition to dedicated business developers focused on strengthening our advisers’ businesses, at Bidvest Life we recognise the importance of an empathetic claims team that guides and supports clients throughout the claims process, ensuring their needs are met with compassion and care,” Cloete concluded.