Brokers spend about half of their time engaging with existing and potential clients and 37% on administration and compliance, according to the 2025 Santam Insurance Barometer Report, which was released yesterday.
Fifty percent of the brokers surveyed believe that industry growth will come from streamlining these activities via greater use of digital channels to allow deeper engagement with customers.
Atang Matebesi, the chief executive of Santam Client Solutions, said this finding was important given the rising complexity of the risk landscape.
“To be an effective risk management partner, the bulk of brokers’ time needs to be spent on client interaction. Digital adoption in practices to minimise admin time is critical to unlock the space for intermediaries to provide this,” he said.
Brokers echoed this sentiment, with seven out of 10 respondents saying the best way for insurers to remain relevant is by providing meaningful risk management solutions and tools.
The fourth edition of Santam’s biennial Insurance Barometer was based on a survey of 881 respondents between January and April 2025. The respondents consisted of 402 consumers, 350 corporate/commercial entities, and 129 brokers (98 independent, 15 national, and 16 tied). These findings were overlayed with Santam’s claims experience.
A recurring theme in this year’s report was policy clarity. Two-thirds of brokers said they wanted a clear breakdown of policy extensions and exclusions.
“Unfortunately, the varied insurer responses to grid failure and the pandemic introduced ambiguity and the potential for differences in interpretation of policy wordings, especially in complex multi-insurer contracts,” said Fanus Coetzee, the chief executive of Santam Broker Solutions.
“Policy wording reviews are under way to provide consumer-friendly, unambiguous, and understandable explanations of cover. Santam has also reinitiated our popular broker advisory forum workshops.”
Brokers as risk advisers
A significant shift highlighted in this year’s report is the growing perception of brokers as risk advisers or managers, with 90% of broker respondents embracing this role.
Coetzee attributed this to strides made over the past two years in fostering a risk-aware approach to insurance. National brokerages, in particular, have advanced this trend by establishing expert-led risk management practices and risk engineering departments that conduct on-site risk assessments.
In contrast, some smaller commercial brokerages may rely on outdated schedules for renewals, bypassing comprehensive risk surveys. To address this, Santam has introduced a risk identification and assessment training programme to equip brokers with risk surveying skills, aiming to transition all brokers toward a risk advisory role.
Concerns over new business volumes
Economic pressures have led to subdued volumes of new business quotations, a trend consistent with the broader insurance market. Coetzee attributes this partly to price sensitivity, which remains the primary factor influencing purchasing decisions.
According to this year’s Barometer, increased premiums continue to impact the insurers that intermediaries recommend, with 43% saying they changed insurers as a result, while 43% also reported an increase in volume of claims in the past year, and 51% said the value has increased.
Broker respondents noted the following changes in client behaviour because of the increased cost of living:
- 24% of commercial lines and 21% of personal lines brokers’ clients put additional risk management measures in place.
- 17% of commercial lines and 20% of personal lines brokers’ clients switched to a different insurer.
- 13% of commercial lines and 18% of personal lines brokers’ clients reduced their insurance cover.
- 9% of commercial lines and 10% of personal lines brokers’ clients cancelled a short-term insurance policy.
- 8% of commercial lines and 5% of personal lines brokers’ clients opted for self-insurance.
Business and consumer confidence significantly shape economic activity, including the demand for insurance. According to Coetzee, “As we entered 2025, 80% of broker respondents expressed confidence in the business outlook for the year ahead – a hopeful signal for both insurers and brokers.” This optimism, however, is tempered by macro-economic and political developments, which cause confidence to fluctuate.
BI underinsurance
A significant concern is the rise in underinsurance or uninsured businesses and consumers, particularly in critical areas such as business interruption (BI). The report notes that 44% of business respondents view BI cover as unaffordable.
Coetzee believes this misconception presents an opportunity for brokers to educate their clients on the many perils for which affordable BI cover is available. Addressing this gap is vital, because underinsurance in BI coverage can devastate businesses facing unexpected disruptions.
Brokers vs direct channels
A notable finding from the report is the preference for brokers among personal lines consumers. “More than half (56%) of personal lines consumers buy their insurance via a broker,” Coetzee said. This contrasts with the industry’s trend towards direct-to-consumer insurance, which has gained traction in recent years.
The report suggests this preference may reflect the sampled population, because entry-level personal lines clients often find direct insurers more cost-effective because of lower service costs. However, as clients’ needs and assets grow, the demand for tailored risk advice increases, driving them towards brokers.
Demographic trends further illuminate these preferences. The report indicates that 74% of existing Santam clients, 65% of individuals aged 60 and older, and 63% of high-earners prefer brokers for short-term insurance. In contrast, younger consumers, particularly those aged 25 to 34 (62%) and 35 to 44 (50%), are more likely to opt for direct channels, driven by price sensitivity and comfort with digital platforms.
“Younger consumers are more price sensitive and more comfortable navigating direct-to-consumer or digital channels,” Coetzee said. Additionally, Gen Z and younger generations tend to purchase insurance for specific needs, such as standalone motor vehicle coverage, whereas older or wealthier individuals seek comprehensive policies to cover complex assets such as wine or art collections.
Key motivators for insurance buyers
The report identifies excellent service (33%) and a strong claims settlement track record (31%) as nearly as important as price for business respondents (34%). Quality products tailored to clients’ needs are also critical, with 39% of commercial and 41% of personal lines respondents prioritising this factor.
Coetzee said product differentiation is more achievable in the commercial segment because of its complexity, whereas personal lines products are often commoditised. He advises that in both segments, brokers and clients should focus on value over price, underscoring the importance of aligning products with clients’ specific risk profiles.
Digital transformation
The digital landscape is reshaping the insurance brokerage industry. Coetzee highlights that many of South Africa’s larger brokerage houses are investing in digital capabilities to enhance efficiency and attract digital-native clients.
By adopting automation and digitization, brokers can cost-effectively serve smaller clients while building long-term relationships as their insurance needs evolve. This strategic shift aims to align with the preferences of younger generations while maintaining the personalised service for which brokers are known.
Proactive risk management by businesses
The report reveals encouraging trends in risk management among businesses, with 50% of business respondents taking proactive measures to control insurance premiums. These measures include investing in early warning systems, security enhancements, and vehicle tracking to mitigate risks associated with crime, economic challenges, and infrastructure issues.
“Risk management is key for sustainable insurance, and sustainable insurance is a key pillar of the domestic economy,” said Coetzee.
Effective risk mitigation requires collaboration among businesses, brokers, and insurers to ensure uninterrupted operations and affordable coverage, he said.