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FAIS-Ombud-Annual--report

Consumer driven insurance – Clients need to know the consequences

“After listening to the minister, it is clear that economic growth is going to remain dismal, unemployment is going to increase, and government debt is going to grow by leaps and bounds closely followed by a growth in unemployment statistics,” Dawie Roodt, chief economist of the Efficient Group recently reacted to the Minister Mboweni’s mid-term budget speech. Neil Roets, CEO of one of the largest debt counselling companies in South Africa, Debt Rescue, also cautioned that deeply indebted consumers should face the fact that they were between a rock and a hard place for the foreseeable future with no relief in sight.

The current economic climate causes consumers to drastically tighten their belts. Unfortunately, they take a Russian roulette approach to insurance and assurance. Herman Lombard, founder and Executive Director of financial services provider African Unity believes that in these tough economic times it is more important than ever for consumers to have adequate cover in place to secure assets and protect loved ones in the event of a crisis or the loss of the breadwinner. He recently commented that while many South Africans have funeral cover, a significant portion of the population is either under-insured or uninsured altogether for death, disability or in the event of a job loss.

“Regulatory and other changes within the insurance industry have paved the way for enhanced cover for policyholders and greater financial inclusion for all South Africans. Insurers are taking advantage of this by using technology to develop smart, value for money products that meet the needs of their customers,” he says. He further mentions that we are in a new age of insurance where customers have much more choice and will prioritise streamlined applications and claims processes over loyalty to a brand. “For insurers, this means knowing what your customer wants, finding ways to providing it and rewarding those that stay,” he advises.

Financial planning has evolved over the years from sales to advice to trusted planner. Understanding your clients and guiding them in their financial decisions through transitions in their lives have now become more important than ever.

Click here to download the article where Herman Lombard advises how to evolve with the changing environment.

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