Santam | Insurance brokers evolving from price chasers to risk mitigators

Fanus Coetzee, CEO of Santam Broker Solutions, says the industry is at a crossroads. "Our guidance to our broker partners is to shift the narrative from price to value and risk mitigation.”

This shift, he says, is not merely a preference but a necessity in a high-inflation, price-sensitive environment where the race to the bottom on premiums is no longer sustainable for any party involved.

In a low-growth economy, one might expect consumers to cancel their insurance policies to save costs. However, current market data reveals a different trend: clients are not necessarily leaving the market, but are responding to risk advice. Instead of cancelling their cover altogether, consumers are adding risk-management measures, switching providers or strategically adjusting their cover.

“Clients value security over a slight monthly saving,” says Coetzee. “Modern brokers are repositioning themselves as trusted advisers who provide personalised, data-driven guidance. By moving the conversation away from cheap premiums towards risk-based consultations, brokers can protect their clients' lifestyles while ensuring their own long-term relevance.

One of the biggest barriers to more in-depth advisory work has traditionally been the administrative burden. Transitioning from an admin-heavy office to a client-facing advisory practice requires significant digital evolution.

As a result, the industry is seeing a surge in AI-driven tools designed to generate renewal comparison reports and facilitate self-service journeys through platforms like WhatsApp.

"Digital and AI-driven tools are removing the operational burden and freeing capacity for forward-looking risk conversations," says Coetzee. “For the independent broker, using insurer-supplied digital infrastructure is no longer an optional upgrade; it’s a prerequisite for competing with larger insurers.”

As risks grow more complex - ranging from cyber threats to global climate volatility - the level of technical fluency required from brokers has increased. The industry is moving towards a fee-for-service model where brokers monetise their expertise rather than relying solely on  commission from transactions.

This evolution requires a commitment to continuous learning. "Brokers must become more data-aware, consultative and technically fluent," says Coetzee. “Those who focus on specialised areas like cyber or sector-specific infrastructure risks are finding new opportunities for growth, even as the traditional personal lines market becomes increasingly competitive.”

Globally, there has been discussion regarding industry consolidation, similar to the private equity roll-ups seen in the United States. Coetzee says that while South Africa is experiencing increased Merger and Acquisition (M&A) activity due to rising regulatory and compliance burdens, the trusted advisory layer remains vital.

“Santam’s research indicates that 78% of businesses and 56% of consumers still rely heavily on brokers because of the inherent complexity of insurance. Small brokers can thrive, provided they do not attempt to compete on the size of their technology stack. Instead, they need to focus on moving into niche markets where specialist expertise is required, adopt automated workflows to maintain speed to market and transition from reactive quoting to resilience planning,” he says.

What is becoming increasingly clear is that the window for purely price-focused brokers is closing. Coetzee maintains that brokers who have not adopted a "trusted risk adviser" position may soon find themselves disintermediated by digital platforms and embedded insurance models.

“Ultimately, the future of insurance brokers lies in their ability to bridge the gap between a client’s current reality and their future resilience. As the risk landscape changes, the most successful brokers will be those who stop selling policies and start managing outcomes,” he says.