In most insurance discussions, we see the topics of the tough economic environment, challenges facing businesses and clients, the increase in claims and other challenges that brokers and insurers face, raising their heads.
Herman Scheepers, General Manager Risk & Technology at Renasa was asked how good risk management advice can impact these trends.
Primarily, according to Herman, we must understand and remember that active risk management and insurance always go hand in hand: “The role of the broker and the underwriting manager in assisting both the policyholder and the insurer in managing risk has never been more important to prevent insurance from becoming too expensive, and in fact, preventatively expensive to the man on the street.”
He said that it is in the interest of the policy holder himself to avoid unnecessary and preventable claims to protect their own individual claims track record. In so doing, he/she allows the insurer to offer the keenest pricing. But further to that, when insurers and intermediaries are in a partnership, in managing risk in a particular portfolio, they can offer better rates in this portfolio for new business. This is the kind of thing that makes the intermediary more competitive, helping to address fears about slowing new business and affordability within the client base.
Enter the broker
While it sounds so simple and logical to manage your risk to make sure that premiums are kept low in the long run, it is not as easy for people to implement, and this is where the broker comes in. Asked what risk management strategies brokers can share with clients to ensure that claims are avoided or kept to a minimum, Herman explained that there are myriad topics one can talk about here, but one needs to try and keep it as practical as possible. Practical, easy to implement advice needs to be passed on to the client.
According to Herman, something top of mind now, that is very prominent in the industry, is power surge claims. We have seen a significant increase in power surge claims in line with load shedding and the difficulties we are experiencing on the national grid. This is a particular area, for example, where communication from the broker to the client base, in terms of the importance and the usefulness of things like surge protectors can be quite important. That is a simple example, but something that can have a significant impact on the overall performance of a portfolio and individual client’s losses.
He mentioned that they have seen that several insurers have changed their approach to offering cover for power surge now, so it is essential that the intermediated market is made aware, through brokers, of the restricted cover that is currently there and the additional penalty excesses that are being introduced, so that clients have it top of mind to manage their risks on an active day-to-day basis.
Proactive steps brokers can take to protect their clients from losses thereby keep loss ratios and premiums low.
Car guards
Crime remains a reality in our world. In the last year we have seen a significant surge in vehicle theft and hijackings of specific vehicle models. To this point, Herman advised: “The most practical way of getting this information across to the individual policy holders must be followed so that they are aware of criminal methods that they can fall victim to. Awareness around remote blocking, key cloning, how to prevent key cloning through putting your vehicle in what they call a signal blocking pouch or Faraday pouch, that kind of information needs to be top of mind and brought to clients so that they are continuously conscious of the risks that surround them.”
Tracking devices are now required by most insurers on a wider range of models than before – we have seen a significant increase in that requirement. According to Herman, this kind of implementation again needs to be conveyed by brokers to the policy holders. Not only to prevent insurance losses but, at the same time, to improve safety for policyholders. Emergency responses that come with the use of tracking devices can often be lifesaving.
On the same side
Brokers and insurers can work more closely together to alleviate many of these challenges. In Herman’s view, we must remember that the insurer, the intermediary, and the policyholder form a single mutually beneficial ecosystem at the end of the day, despite the feeling – especially between insurer and broker – that we are sometimes tugging in opposite directions. It certainly is a joint effort between all parties.
He believes there are two components that we need to consider: Prevention of loss is one side, but there is also the impact that a loss will have once it has occurred. The importance of the intermediary and insurer working together to minimise cost of claims, of course while you are still fairly indemnified by the insured, should certainly not be overlooked. This is where active coordination of procurement initiatives comes in, while advice given by the brokers to their policyholders to follow claims protocols is instrumental in achieving the benefits of service provider deals negotiated by the insurer.
In the commercial space, something that is top of mind is fleet management, specifically within heavy commercial vehicle fleets. Herman mentioned that, in that space, you see the application usually coordinated through underwriting managers with their brokers and clients. You see the application of telematics devices, which is used in actively managing the fleets, the positioning of the vehicles at any one time, tracking vehicles going off course and any unusual behaviour. This is to try and prevent losses from occurring or if an incident occurs, trying to mitigate the impact as quickly as possible.
Muscling up
With Renasa now proudly part of the TeleSure Investment Holdings stable, they have greater ability than ever before to optimise on claims cost, leveraging as much as they can of the overall group’s strengths.
Herman explained: “We are rolling out various claims initiatives on motor, which brings by far the best procurement deals and initiatives right into the broker market, while still ensuring a great customer experience, offering incredible benefits to the clients, and providing lifetime guarantees on all motor repairs.”
Another example lies in surge protection, where Renasa changed all their products to offer different levels of power surge that can be purchased according to a client’s own individual needs.
He stressed that implementing changes that are different from what our intermediaries and our policyholders are used to, may sometimes be a bit difficult for everybody to get used to, but we have to keep in mind that these are only there to control the cost of claims, which in turn makes the intermediated market as efficient as possible.
Herman concluded by saying that all this is being done to ensure sustainability and competitiveness of the advice-driven market, which they believe in and value: “I am quite excited about our journey forward, because Renasa now has the muscle behind us to be truly impactful on the market and to say that we are going to be the broker’s even better, best friend.”