Clash of short-term insurance titans heats up
The tug-of-war between independent brokers and direct sellers in the short-term insurance industry seems to be heating up again, with brokers questioning the quality of services offered by direct insurers.
"The direct insurance channel is constantly being bullied by brokers but despite this, international and local trends show that the bully could soon join the Great White Shark on the endangered species list," Dial Direct Insurance director Anthea Abrahams said yesterday.
PricewaterhouseCoopers' peer review on the South African insurance industry for 2006 showed that there was a belief within the industry that the short-term broker was outdated.
According to the report, "the number of brokers in the short-term industry is expected to shrink by almost 1500 (by 2009) representing a 6,65% decline".
But Insurance Brokers Council chief executive officer Justus van Pletzen said that there would always be a need for a middle-man.
Van Pletzen said going direct was not always cheaper as "their products are often insufficient" in meeting customers' needs.
In the battle for the consumer, direct-insurers are now looking at targeting the previously disadvantaged low-income market and Abrahams said that direct-selling insurance companies had technology on their side.