NASTASSIA ARENDSE: FirstRand has been awarded a short-term insurance licence by the Financial Services Board. This is three years after acquiring its long-term insurance licence
This is a conversation I had with Lee Bromfield, who is the CEO at FNB Life.
LEE BROMFIELD: Yes, for a while now we’ve been working on placing FirstRand into a full-suite financial services company, and our latest venture on this side is to start up a short-term insurance division. Recently the FSB let it be known that our application was accepted.
NASTASSIA ARENDSE: You got this short-term insurance three years after acquiring your long-term insurance licence. When was the long-term insurance licence acquired, if you remember?
LEE BROMFIELD: It was in March 2015, and we officially started selling on that licence on July 1 2015. So just under three years since we started doing insurance again.
NASTASSIA ARENDSE: You also mention that as a result of acquiring this short-term licence you will now be well positioned to sustainably scale your insurance pillar. Let’s look at the insurance industry in South Africa, perhaps, for yourself being in the long-term space and for others. How competitive is it now that you guys have a short-term insurance? Do you expect more steep competition?
LEE BROMFIELD: Oh, we hope so. We welcome competition. But if you look at the industry now and you look at the existing players, most of the players out there have very limited insight in terms of who the customers are, what their customers are doing and what their potential customers are doing. Things like most times when you interact with your short-term insurance company is when you are putting in a claim. So there is very little information throwback.
Now at FNB we have an immense amount of insight and knowledge of our customers that we are putting to good use.
Another thing that happens in short-term insurance that we are looking to fix, there are lots of what we call single-channel players, so you either have to go through a broker or through a call centre. There is no one really who is able to offer you a very good experience through digital, call centre and broker, as well as other channels that exist.
NASTASSIA ARENDSE: What role does technology play in you being able to scale up your insurance pillar?
LEE BROMFIELD: Massive. Just think of our benefit that we have. Existing players tend to be quite cost- and legacy-heavy. Now for us we get to build out new platforms and we get to integrate into platforms at FNB has already developed. FNB has a very strong digital presence, with some fantastic data capability. So we are really trying to understand those customers better, trying to make sure that those processes are better. Today we were looking at some other processes out there, and we came across an application form that was 36 pages long. I think what we are trying to do is really get to a space where we can offer people one-click insurance, to know so much about them that they can literally get insurance in the shortest possible time and still get a fantastic offer.
NASTASSIA ARENDSE: As you mention, one-click sales processes, robo-claims processes, built with new-age artificial intelligence techniques. When it come to the space of blockchain, do you see that being helpful in any way to perhaps even lower costs?
LEE BROMFIELD: I think it’s at quite an early stage in some of the blockchain’s uses within the insurance industry. Obviously at FNB we are keeping quite a close eye on the flexibility there. Initially we could look at doing some form of smart contracting, but I don’t think that’s going to be a short-term benefit for insurance.
NASTASSIA ARENDSE: Now that you have the short-term insurance licence, what happens from this moment onwards?
LEE BROMFIELD: [Chuckling] Our lives get a lot more busy. We are looking at doing a release to customers later this year. We are still keeping some of the information under wraps. But essentially what we are going to do is try and offer our customers a very unique and very special process, and you are not going to see a massive amount of above-the-line marketing because we don’t need to. We know who those customers are, and they listen to us when we talk to them. So it’s going to feel to most of our competitors like a stealth operation, because they won’t necessarily see it, but quite quickly we’ll be eating into that market.