If you’ve had to make an insurance claim recently, you’ll know that, emotional trauma and anxiety aside, one of the most important things is having a sensitive, competent intermediary represent you — one who is able to support you and make the claims process as painless as possible. The last thing you need is uncertainty, delays or the stress of dealing with the outcome of bad advice.
Of course, we expect to be treated fairly by professional brokers who have our interests at heart. But this doesn’t always happen.
As tightening legislation makes it more difficult for intermediaries to act in their own self-interest and sell the consumer short, clients are also demanding they get comprehensive service and support. You can buy insurance from just about any company these days — but are you certain to get the level of expertise and the good advice you can get from an intermediary?
According to Barry Taylor, director at the Financial Intermediaries Association of Southern Africa (FIA) insurance intermediaries are facing challenging — and interesting — times. A changing regulatory environment, more competition and cash-strapped consumers have placed intermediaries under pressure. But Taylor feels this will ultimately make the industry more resilient.
The FAIS General Code of Conduct, Conflict of Interest Regulations and the Consumer Protection Act, which will come into effect soon, should see to it that consumers are more protected than they were previously.
”The Conflict of Interest Regulations, for example, will guard against an intermediary’s offering you a particular product because he or she is compensated for a higher volume of business placed with an insurer at the expense of quality and customer needs,” says Taylor. ”An intermediary is meant to source the best premium and the most appropriate product for each customer, so the customer gets the very best of what’s available.”
Although this might sound dire — and people are quick to knock the role of the intermediary, saying they can do without one — the intermediary is still the person who can talk you through the exclusions, nuances, pros and cons of a product without resorting to a one-size-fits-all solution for your particular needs.
It’s up to you to weigh the risks, savings and benefits of having or not having an intermediary, but your broker remains obliged to assess your needs, offer proper advice, shop around on your behalf and ensure your claims are met. There’s a greater chance this will be done if regulations make it more difficult for intermediaries to deviate from this kind of delivery.
”Ultimately, it’s good service — supporting and serving the client when they really need help — that is the difference between relying on an over-the-counter insurance product and an intermediary that can source the best product for you,” says Taylor. ”At the same time, it’s up to customers to outline their particular needs. If a client withholds something, an intermediary can’t make the best possible decision. It’s a two-way relationship. And it should be one that allows all contingencies to be covered, to the customer gets a fair deal.”
Questions to ask your financial intermediary