CEO of Hollard Insure
Which 2017 events do you consider to have made the biggest impact on the insurance industry?
Without a doubt, the single biggest impact on Hollard (and the insurance industry in general) in 2017 has been the devastating Southern Cape fires in June, with total claims running into billions of rands. Virtually every insurer took a substantial knock. Similarly,
the storms in KwaZulu-Natal and Gauteng in October caused enormous damage, economic disruption and myriad claims ensued.
Catastrophic events such as these are occurring more frequently and are becoming more severe in their nature. They are having an economic impact and present ever-greater risk for the insurance industry and, ultimately, higher premiums for consumers.
More broadly, the political and economic ructions that have taken place in South Africa in 2017 are of great concern. Political and policy uncertainty, revelations around state corruption, stagnant growth, our huge budget deficit and our tenuous credit rating all hold severely detrimental consequences for our economy.
Where there is more certainty, however, is in the financial services space. Phase 1 of the Retail Distribution Review (RDR), an initiative by the Financial Services Board (FSB) to better regulate financial advice and fees charged, is due to come into effect in January 2018.
Those in the insurance sector who have prepared themselves for how this will affect their business will find the transition easier than those who have not. Also coming into play is Solvency Assessment and Management (SAM), the risk-based regulation approach that provides the standard for risk management.
What do you consider to be positive for the industry?
As an industry, insurance is making strides in transforming itself, although it is still a long way from being representative of our country.
We are heartened to see the breadth and diversity of young talent coming into our industry, which augurs well for the future. Hollard actively supports transformation in many ways, from our procurement practices to sponsoring education and training initiatives.
Tough times also call for innovation and insurers are becoming more agile in the way they do business. Greater efficiencies, smarter product lines and the effective use of technology help keep us viable and the cost of insurance down, to the benefit of policyholders, brokers and ourselves.
Technology lowers barriers to entry for new competitors in the insurance industry to the benefit of the consumer.
Hollard Insure, our realigned new short-term business, is a good example of this.
We’ve combined our Hollard Broker Markets, Hollard Personal Lines and recently acquired Regent entities in a way that’s streamlined, more efficient and more logical, thus making the business of doing business with Hollard simpler, faster and more convenient.
Sectors to watch out for this year?
Tougher times are undoubtedly ahead, what with our sputtering economy and greater risk factors such as increasing natural catastrophes. Those sectors that run a tighter ship – containing costs, effectively managing risk and making smarter use of technology – will be the ones that thrive.
What also matters is great financial advice and service. In that regard, Hollard’s commitment to financial intermediaries is unwavering. In fact, the advent of Hollard Insure shows that we are improving the service we offer to them and their customers; this is one of the pillars upon which Hollard Insure is founded.
We are doing everything in our power to ensure that brokers have everything they need to bring our wide range of relevant products to the market.
When it comes to technology, we must continue to embrace change. Industry innovation surveys tell us that we have little choice; only through exploiting the opportunities that technology offers us, will we remain relevant to the market and continue to operate as viable companies.