Simplifying insurance is the key to resolving the trust paradox

Source: Supplied. Schalk Malan, the chief executive officer of BrightRock.

A 2022 survey by the Financial Services Conduct Authority (FSCA) revealed that life insurance is one of the least understood financial products, with disclosure particularly lacking in the industry.

Misconceptions abound, exacerbating the challenge of effectively communicating the value and purpose of insurance cover to clients. Yet in 2023, statistics released by the Association for Savings and Investment South Africa (Asisa) in March of this year show that insurers paid out more than R599bn to policyholders and their families. Given the huge contribution the industry makes to consumers’ lives, the lack of trust of the industry is a paradox.

But it doesn’t have to be this way. The remedy begins with a return to the age-old adage: “Say what we do and do what we say”. As brokers and industry leaders, it’s imperative that we step into the shoes of those who don’t possess our specialised knowledge and ensure clear and consistent communication in a language that resonates with our clients. The remedy lies in simplifying insurance offerings and enhancing transparency.

• Clients need clarity: Life insurance inherently involves discussing uncomfortable topics such as mortality and debilitating illnesses, making it challenging for clients to articulate their needs. Furthermore, the myriad options and payment structures further complicate the decision-making process, leading to sub-optimal cover and dissatisfaction among policyholders.
• Embrace transparency and simplicity: Insurers need to prioritise transparency and simplicity in their offerings to rebuild trust with clients. This includes simplifying policy documents, clarifying pricing structures, and providing upfront disclosure of commission.
• Training and professionalism are essential: Continuous training ensures brokers remain knowledgeable and empathetic, providing clients with professional advice and guidance. By prioritising ongoing education and development, financial advisers can enhance the client experience and build lasting relationships.

  Adapting to evolving client needs is also key. In the current dynamic economic landscape, clients seek value, efficiency, and flexibility from their insurance providers. By embracing technology and streamlining services, insurers can meet these evolving demands and deliver greater value to clients. Clear communication and prompt claims processing are essential for maintaining trust and loyalty.

• Insurance provides peace of mind: The significance of insurance in providing financial security and peace of mind can’t be overstated. As insurers navigate the complexities of the industry, it is imperative to prioritise client satisfaction and trust.

By simplifying insurance offerings, enhancing transparency, and investing in professionalism and empathy, insurers can rebuild trust with clients and ensure their long-term satisfaction.

Ultimately, clear communication and compassionate service are essential for fostering lasting relationships and prosperity within the insurance industry. As we continue to evolve and adapt to meet the changing needs of clients, let us remain steadfast in our commitment to delivering value, efficiency, and peace of mind through our insurance solutions.