What's Happening?

Facebook Twitter Youtube Linkedin

NEED HELP? QUESTIONS@FIA.ORG.ZA

become A FIA member TODAY
member login

Risk And Reward

ARTICLE BY

  • Sedick Isaacs
  • Head: Learning & Development
  • Bryte

SHARE THIS POST

As individuals and organisations, large and small, we live and work with risks daily. Every part of life has a level of risk, both on a domestic level and in business, where internal and external operating environments face risk. How we deal with these risks is of paramount importance. On a domestic level, we face risks in our normal daily functions in our homes when, for example, using a stove or gas apparatus. In business, the risks we take in insurance need to be understood, as at some point, there may be a claim or a business that participates in a specific type of industry that requires consideration for their specific exposure to risk.

Understanding risk management

We know that there is risk in life, but what is more important is understanding how risk management can minimise, avoid, or remove risk. Risk management is a process that uses a methodology to identify risks that organisations face. It then enables an understanding of the effect and impact it will have on an organisation if it takes place.

Once we thoroughly understand the risk, we then analyse and assess it to ascertain how it can affect the organisation and consider what mitigation measures need to be implemented to manage risk, where it cannot be eliminated. Risk management is critical as most risks cannot be eliminated, but constant management and controls must be in place to minimise and sometimes avoid them.

Businesses mustn’t treat risk management as a once-off, but rather as an ongoing programme of continuous management and control. Risks evolve in the modern world with new risks constantly emerging, making it critical for risk management to evolve.

Implementing a risk management programme

When implementing a risk management programme that carries strategic significance for the organisation, we look at how this will deliver strategic success in various key aspects.

When risks are strategically managed, it allows for easier decision-making processes to be implemented at various organisational levels. This promotes opportunity for growth, expansion, and success. But more importantly, it allows for sustainability.

Multilevel decision-making at individual, management and executive levels is critical to an organisation, particularly in the insurance industry. Risk management should therefore enable and be a catalyst for informed decision-making at these various levels.

Protecting reputation

The insurance industry relies on historical data for business planning, directly affecting individual clients and businesses. Therefore, risk management at a strategic level allows for short-term and long-term business planning. Because the risks are known, it allows for solid planning with the ability to consider innovative actions and create a business that will not only withstand risk but will become resilient for a sustainable existence.

Similarly, strategic risk management has a major impact on the reputation of a business. A strong risk management programme allows for customer confidence and strengthens the business’s brand.

Risk mitigation is a direct factor in a business’s ability to grow, expand, and be profitable. A negative view of any organisation is a serious risk to its reputation and will impact the entire business and its profitability. A negative reputation cultivated by a lack of trust and confidence could lead to serious financial repercussions. In contrast, a formidable reputation will give the company good standing compared with its competitors and allow it to explore opportunities and new ventures.

In this digital age, risk management and emerging risks cannot be treated with a tick box approach, as that approach could carry profound consequences for an organisation and its people. Businesses and individuals live in a world where technology is integral to their lives. With the rapid and ongoing technological change, organisations must view risk mitigation as part of their strategic direction and with a long-term future approach. It is the one key aspect for business success that cannot be taken for granted and needs intense and continuous focus and management.

To conclude, risk management mitigates and controls risk, allows companies the freedom to take risks, grows and expands business, increases profitability, implements eco-linked policies, provides for long-term employment opportunities, and serves customers strategically in the short and long terms.

Subscriber Terms and Conditions

  1. APPLICATION OF TERMS
    • These terms and conditions (“Subscriber Terms”) apply to the subscription by any qualifying member of the South African Underwriting Managers Association NPC (“SAUMA”) to the services and benefits offered by FIA Services (Pty) Ltd (“FIA Services”) under the SAUMA affiliation arrangement (“Subscription”).

  2. NATURE OF SUBSCRIPTION
    • A Subscription under this arrangement:
      • does not constitute membership of FIA NPC;
      • does not confer any voting rights or governance participation in FIA NPC; and
      • is governed solely by the contractual relationship between the Subscriber and FIA Services.

  1. ELIGIBILITY
    • To qualify for the Subscription, the applicant must, at the time of application, be a current paid-up member of SAUMA.
    • FIA Services will verify the applicant’s SAUMA membership status with SAUMA prior to activation, and may re-verify such status periodically.
    • If a Subscriber ceases to be a paid-up member of SAUMA, the Subscription will correspondingly be terminated.
    • Applicants are required to authorise FIA Services to confirm their SAUMA membership status with SAUMA as part of the application process.

  1. SERVICES
    • The Subscription entitles the Subscriber to the following benefits:
      • Complimentary access to the FIA CPD Platform;
      • Complimentary access to the FIA Insight Magazine (digital edition);
      • Advertising opportunities on FIA platforms at a discounted rate of 15% (fifteen percent) off the prevailing published rates; and
      • Invitations to attend FIA Technical Webinars annually.
    • FIA Services reserves the right to update, vary or substitute the Services from time to time, provided that the overall value and nature of the benefits remain materially the same.

  1. FEES AND PAYMENT
    • The monthly subscription fee is R260.00 (two hundred and sixty rand) for up to seven registered individuals (Key Individuals and Representatives), and R36.00 (thirty-six rand) per additional registered individual thereafter, excluding VAT.
    • The Subscriber shall provide FIA Services with the required details of each individual to be registered under the Subscription for the purposes of activation and billing.
    • All fees are exclusive of VAT, which shall be charged at the prevailing statutory rate.
    • Subscription fees are reviewed annually in March and may be adjusted with effect from 1 April.
    • Any changes to the Subscription, including but not limited to the number of Representatives and Key Individuals registered under the Subscription, may only be effected once annually during the annual review period in March of each year, with such changes taking effect from 1 April.
    • Subscription fees shall be billed monthly in arrears, unless the Subscriber elects an annual billing cycle at the time of application.
    • The Subscriber shall ensure that all billing information (including contact details, authorised signatories and bank account details) is kept accurate and up to date.
    • Non-payment of subscription fees may result in suspension of access to the Services until such fees are brought up to date.
    • The Subscriber acknowledges and agrees that all subscription fees payable under these Subscriber Terms may be collected by way of debit order, which shall be processed by the holding company, FIA NPC (The Financial Intermediary Association of South Africa), on behalf of FIA Services. Payment to FIA NPC shall be deemed to constitute valid and sufficient discharge of the Subscriber’s payment obligations to FIA Services under these Subscriber Terms.

  1. ONBOARDING
    • Onboarding will be conducted as a Subscription with FIA Services under the SAUMA affiliation arrangement.
    • Onboarding will not confer FIA NPC membership status or any associated rights.
    • Onboarding is conditional on confirmation of the Subscriber’s current SAUMA membership at the time of application

  1. DATA PROTECTION
    • FIA Services will process all personal information in accordance with the Protection of Personal Information Act 4 of 2013 (POPIA) as set out in our POPIA policies.
    • By subscribing, the Subscriber authorises FIA Services to confirm their SAUMA membership status with SAUMA and to process personal information for the purposes of fulfilling the Subscription.

  1. TERMINATION
    • The Subscriber may terminate the Subscription by giving FIA Services one calendar month’s written notice.
    • FIA Services may terminate the Subscription on one calendar month’s written notice, or immediately if the Subscriber breaches these Subscriber Terms and fails to remedy such breach within 14 (fourteen) days of receiving written notice.
    • Termination of the SAUMA–FIA Services affiliation agreement shall not automatically terminate these Subscriber Terms.
    • Termination by the Subscriber shall not relieve the Subscriber of liability for any subscription fees accrued up to the effective date of termination.
    • FIA Services may suspend or terminate the Subscription with immediate effect in the event of non-payment of fees by the Subscriber.

  1. GENERAL
    • These Subscriber Terms are governed by the laws of the Republic of South Africa.
    • Any disputes arising under these Subscriber Terms shall be dealt with in accordance with the dispute resolution provisions contained in the FIA NPC membership terms and conditions, as modified to reflect that the contractual relationship is with FIA Services.
    • Any notices required under these Subscriber Terms may be validly delivered by email to the addresses provided in the Subscriber’s application form, and such notices shall be deemed received on the day of transmission if sent during business hours.
    • The Subscriber may not assign, cede or transfer any of its rights or obligations under these Subscriber Terms without the prior written consent of FIA Services.
    • No variation of these Subscriber Terms shall be of any force or effect unless reduced to writing and signed by both FIA Services and the Subscriber.