Meeting Shehnaz Somers, head of commercial lines underwriting at Santam

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  Q: How did you get involved in Financial Services?
  
  A: I have a Master’s degree in French Literature and was a French teacher in a previous life. In 1996 when I relocated to Johannesburg, I didn’t want to lose my French so I applied for positions that required French and to cut a long story short, I ended up working for Munich Re of Africa (MRoA) in the Africa Business Department (which included business from Francophone Africa) as well as in the Facultative Department of MRoA. Prior to that, I hadn’t heard of reinsurance hence I had to go through a steep learning curve. Reinsurance is very technical due to the high level of exposures that are being covered and one of my roles was Head of Strategy, for which I needed to understand sufficiently the business from the bottom up too to make sure we achieved our targets year after year.
  
  Q: We often hear that price is everything in the short-term market – is this true or do other things matter?
  
  A: Like with any other product sold in the market, price is one of the most important competitive factors, however, it is not everything. In general, quality and features of a product also play a part in the attractiveness of a product depending on one’s needs. There has been perception created in the short-term insurance market that price is the only differentiator but anyone who compares products on a like-for-like basis, i.e. understanding what you are covered for in the event of a claim and what you are not, will see all the differences in the products. Monthly premiums can also be cheaper if excesses are higher and a customer may only realize this when he/she has a claim.
  
  Q: What is the best and worst insurance advice you have come across?
  
  A: The best insurance advice is being told that if one takes a higher excess in order to pay lower monthly premiums, then one has to be able to have enough money set aside to cover the excess when one has a loss. Personally, I have been fortunate not to have received bad advice when it comes to short-term insurance but I have come across people who were advised to insure their house contents for a lower amount than what they were worth to enjoy lower premiums only to discover at claims time that they were under-insured and could not claim the full amount.
  
  Q: How big an issue is it that SA has so few insured cars on the roads?
  
  A: Traffic accidents cost the South African economy billions of rands every year hence it is a big issue. Also it is estimated that only between 30% to 35% of vehicles on SA roads are insured which means that if an insured vehicle is in an accident with an un-insured vehicle caused by the un-insured car, then it is almost impossible for the insurer to recover the costs for the insured vehicle so the total cost of the claim is offset against the client’s loss history and not only the part that was unrecoverable. This effectively means that a small portion of vehicles on the road are carrying the costs of car accidents. For those who are not insured, they also have to carry the financial burden of repairing their cars and if they don’t, their cars may no longer be as safe as it should be which may increase their risk of having another accident.
  
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