Transcript how clients search

AGENDA
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INTERNATIONAL CHANNEL TRENDS
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THE SOUTH AFRICAN INSURANCE MARKET
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CHANGING DEMANDS FOR INSURANCE
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IMPACT OF NEW LEGISLATION
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CLIENT EXPERIENCE FEEDBACK
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INTERMEDIATION REDEFINED
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THE RESPONSIBILITY FOR CHANGE
CHANNEL MIX
Do you currently have at least one insurance product purchased through
one of the following channels? (International Accenture survey, 2010)
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Internationally, consumers most commonly
purchase insurance products from insurance
agents.
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However these figures, while large, are declining
as the Internet eats ravenously into the agent’s
market share.
― This trend is strongest in the UK and
Germany. Only in Brazil is the agent holding
his own.
CHANNEL GROWTH
The Internet is growing faster than any other distribution channel.
How do you expect to purchase or renew insurance in the next 12 months?
(International Accenture survey, 2010)
HOW CLIENTS SEARCH
Mirroring other industries, insurance clients have become truly “multimodal”.
20% say they use more than 4 interaction points to search for insurance
Five predominant
channels for
information
gathering
Source: IBM Powerful interaction points saying goodbye to channel
THE CURRENT CONDITIONS OF OUR MARKET
Mining unrest and industrial actions
Sluggish economic growth
The weakness of the Rand
Not recovering expenses
Currently in a soft cycle, premium level too low
High level of claims in 2012
INTERMEDIATION DECLINING
Composition of top 10 insurers
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Over a five-year period the intermediated
channel has lost 5.7% of its top 10 share
and is the only channel not growing its
share (still has the highest share at 71.3%).
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The Cell Captive insurers have increased
their share the most (2.9%), followed by the
Direct insurer (2.5%) and then
Bancassurance (0.5%).
BLACK MIDDLE CLASS NOW BIGGER THAN WHITE MIDDLE CLASS
Source: UCT Unilever Institute 2013
SLUGGISH GDP GROWTH
• GDP growth expected to average 2.52.75% in 2013.
• CPI is expected to increase to around
5.5% by July, averaging 5.9% in 2013
and ending the year at 5.4%.
• Provincial GDP growth strongest in
Gauteng and Western Cape.
• Provincial GDP growth weakest in
Northern Cape and Limpopo.
GROWING AND DECLINING INDUSTRIES
SOUTH AFRICA: 3.4% GDP
GROWTH (2013-2017 CAGR)
Top five
sectors
Food and
drink (9.2%)
Retail
(9.2%)
Commercial
Banking (9.4%)
Oil and Gases
(9.5%)
Tourism
(11.5%)
Bottom five
sectors
Consumer
Electronics
Telecom:
Cell phone
users
Freight transport,
rail
Mining
Telecom:
Main phone
line users
Grey = High growth
Yellow = Moderate growth
Blue = Low growth when compared to
the five year compound average growth
rate of GDP
SPEND BY GOVERNMENT AND INDUSTRIES TO BENEFIT
NEW GROWTH PATH
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Massive investment in infrastructure as critical driver of jobs.
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R4 trillion investment completed.
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The framework identifies investments in five key areas namely:
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Energy
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Transport
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Communication
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Water and housing
Sustaining high levels of public investment in these areas will create jobs in construction, operation and
maintenance of infrastructure.
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Trigger to build a local supplier industry for the manufacture of the components for the build-programme.
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Specific measures, particularly changes to procurement policy and regulations, are identified to ensure that
this is achieved.
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Risks include the still fragile global recovery; competition and collaboration with the new fast-growing
economies; as well as competing interests domestically.
CHANGING RISKS
- Santam
LARGE LOSSES- SANTAM
2011
2012
Average last 5 years
> R 5m
8
27
10.2
> R 10m
2
7
3.2
> R 30m
1
2
1.25
• Variability in claim numbers, but 2012 significantly worse
than average
• Correlation with economic conditions – maintenance
expenditure and risk management under pressure
• Also impact by CAT events in Gauteng, Mpumalanga and
St Francis Bay
How to draw a sketch on a insurance claim
BINDER REGULATIONS
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Information letter published on 1 July 2013.
― Binder activities clarified.
― Incidental activities deemed part of binder functions.
― Fees to be allocated per standard tick list of activities.
― Separate outsourced and binder agreements may not be concluded for the same binder function.
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Insurers required to report to the Regulator all binder fees currently paid per identified activity per binder
holder.
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Regulator to propose fee benchmarks per activity in 2014.
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“Mechanical entering into” may be remunerated by an “insignificant binder fee” only.
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“Intermediary fee” paid to policyholder not impacted, may still charge for risk management and advice.
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90 days to re-contract and comply if existing agreements non compliant – due date 30 September 2013.
TREATING CUSTOMERS FAIRLY
Fair treatment of
customer is
central to the firm
culture.
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Products and
services are
designed and
targeted to
appropriate
customer groups.
Customers are
given clear
information
before, during
and after the
time of
contracting.
Advice is suitable
and takes account
of the customer’s
circumstances.
Products
perform as
firms have led
them to
expect.
Outcomes based approach requires subjectivity, no rules are defined.
Important to define “Fair” in the context of your business.
Regulator assessment will ascribe double the weighting to outcome 1 than any other outcome.
Applies to financial services providers, including intermediaries.
Effective date is 1 January 2014.
Customers do not
face unreasonable
post-sale barriers
to change product,
switch provider,
submit a claim or
make a complaint.
OSTI REPORT
Formal complaints received
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Types of complaints
Even though 2012 was a particularly difficult year for insurers as a consequence of adverse weather
conditions and fires, the pattern of claims remained unchanged.
Motor is still the largest complaints category.
OSTI REPORT
Claims percentage per category higher for banks and direct writers
* Auto and General excluded since Budget and First for Women still included for 2012
SANTAM COMPLAINTS
SERVICE FAILURES
HELLO PETER COMPLAINTS (JUNE 2013)
Panelshop repair failure is core concern.
Policy interpretation failures:
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Intermediary blamed for not informing the
client of what is covered and not covered.
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Clients unaware of contents of their policy
documents. Repudiations of insufficient
security measures and not specifying items
like a pair of earrings and GPS resulting in
frustration and anger from clients.
NEW THINKING CHALLENGES CONVENTIONAL ASSUMPTIONS
Mix and match (‘PULL’)
driven by customers
Traditional approach (‘PUSH’)
driven by insurers and intermediaries
Individuals
Registered investment advisors
Independent intermediaries
Independent agents
Average sum insured of
the motor book increased
Banks
Worksite marketing
Call centres
Direct / Internet
Businesses
MICRO AND SMALL
MEDIUM
LARGE
Direct
Aggregators
Banks
Point-Of-Sale
Intermediaries
Direct
Aggregators
Advisors
Intermediaries
Advisors
NEED FOR SOPHISTICATED AND INTEGRATED RISK MANAGEMENT SOLUTIONS
According to the 2011 Accenture Global Risk
Management study, 98% of respondents said
risk management is a higher priority today than it
was two years ago. More than 80% of companies
surveyed also consider their risk area to be a key
management function that helps them deal with
marketplace volatility and organisational complexity.
Source: The changing face of risk management, Accenture, 2011
THREATS TO INTERMEDIATION
AGENTS HOLD THE DOMINANT
MARKET SHARE
INTERNATIONALLY
• Fee pressure and intermediary
market consolidation make this
an attractive growth channel
for local insurers.
• Reduces income volatility and
improves insurer control.
BANCASSURANCE offers clients unique value
propositions biased to direct interaction.
ABILITY TO CAPITALISE ON GROWTH
OF BLACK MIDDLE CLASS.
ONLINE GROWING FASTER THAN ANY
OTHER CHANNEL
• Less reliance on traditional word of
mouth.
• Availability of capital for investment in
technology.
• Direct players are more tech savvy.
AFFINITY MARKETS offer clients “brand”
promises that increasingly influence
client buying decisions.
OPPORTUNITIES FOR INTERMEDIATION
ACCESS IS MORE IMPORTANT THAN CHANNEL
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Search using multiple technologies.
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Purchase personal interaction.
CLIENT RETENTION OFFERS GREATEST VALUE
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Trust and after sales service are differentiators.
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Important to be able to move seamlessly across
interaction mechanisms.
NEED FOR TECHNICAL EXCELLENCE
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Value of advice is important.
EMERGING VALUE PROPOSITION
CLIENT SEGMENTATION
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Actively manage risk selection and retention efforts.
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Analyse the cost to service client segments to understand
how service expectations and profitability differ.
CLIENT VALUE PROPOSITION
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Improve interaction quality.
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Understand how to personalise service and show clients they are valued.
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Offer a superior client experience dependent on their personal needs.
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Make sales and renewal simple and convenient.
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Drive speed of resolution of queries.
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Tailor and improve quality of advice.
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Develop technical and risk management expertise.
EMERGING VALUE PROPOSITION
TECHNOLOGY INTERFACE
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Increase the number of available interaction points with clients.
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Integrate online and offline channels seamlessly.
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Introduce mobile research and servicing capability.
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Use social media to understand client concerns and respond to complaints.
MAKE THINGS HAPPEN
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Intermediaries led change and innovation 15 years ago.
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Who is leading change and innovation now?
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Let’s get our own back.
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Santam would like to be your partner of choice on
the journey.
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We are in it together.