The role of insurers in helping businesses and households offset the current financial shocks

The world is experiencing high inflation and interest rates after the financial shock of Covid-19, causing the prices of goods and services to rise, affecting businesses and households. Insured clients need to build resilience and find ways to manage new developments and risks.

Inflationary pressure and slow economic growth make loss prevention and reduction crucial for insurers to help businesses. However, repair and replacement of claimed items will cost more, and insured clients should expect above-inflation average renewal increases.

Insurers need to develop evolving and affordable product offerings that respond to the current macroeconomic risks that clients are facing, such as business disruption, motor theft, and water damage following flooding on a scale not previously seen in the South African market.

Brokers must play a critical role in educating clients to mitigate risks

In times of financial shocks, the role of brokers is more critical than ever in educating clients on the potential impact of inflation on their insurance coverage. The broker can help to assess the risks of underinsurance, as well as provide regular updates and advice on any adjustments to their cover as new risks emerge.

Brokers can also encourage clients to invest in additional security measures for their properties or vehicles to save on premium increases and/or higher excess, for example by installing a wireless tracker as a second tracking system, and a backup in case the wiring system gets tampered with. This can assist both personal and fleet management, encourages safer driving, and also drastically increases the chances of recovery following thefts.

As loadshedding persists and many clients install solar systems at their business premises or homes, they need to look at their insurance coverage and risk preventive measures they can put in place to mitigate the risks of theft or fire. Clients need to know what their insurance will cover after installing these systems and what insurers require for cover to be in place, for example an updated Electrical Certificate.

In this situation, you need to continue working with your broker to find the best approach and to make the necessary adjustments. This process is aimed at bringing about sustainable solutions to protect the insured, especially in situations such as this where external factors could cause financial strain on clients. As insurers, we rely heavily on our brokers to continue educating clients that it is critical to remain insured against catastrophe during tough financial times.

At Infiniti Insurance our solutions are carefully developed in consultation with our broker partners by assisting them in managing their clients’ risks and creating seamless, personalised and efficient service. We are focused on long-term partnerships with brokers, providing insurance cover for our mutual clients.