The Covid-19 pandemic and lockdown have forced companies in every sector into a new paradigm: the so-called “new normal”. So how are insurance-related businesses coping?
The May 2020 edition of FIA Insight, the periodical of the Financial Intermediaries Association of Southern Africa, polls leaders from a wide array of insurance businesses, among them Fulcrum Collections managing director Barry Scott.
In its 30-year history, Barry says, Fulcrum Collections had always operated in an office-based environment. Fortunately, however, several months ago it undertook a programme to move its IT infrastructure into the cloud.
“When it became clear we were facing an imminent lockdown, we were quickly able to transition fully to a work-from-home business. We now have a ‘dark office’. Each of our staff is able to contribute to the ongoing success of the business.
“We meet daily as a management team, using Microsoft Teams, and every day our entire staff has a catch-up,” Barry says.
Canvassed on the impact of the pandemic on the insurance industry, Barry says he believes insurers and intermediaries have yet to feel it.
Collection figures for the end of March showed virtually no change, likely because people were paid their full salaries, but the end-April collection figures “may paint a different picture”.
“Insurance companies will most likely see a reduction in premium income, which will have a corresponding reduction in commissions earned by brokers. This is directly related to total premium collected.
“The FIA and [Financial Sector Conduct Authority] have, however, devised a plan that allows insurers to continue to pay commission to brokers even when no premium is being collected,” Barry observes.
And is there a silver lining to the situation?
At Fulcrum we have proven the value of understanding the need to assess business risk, and to create contingency plans that are thoroughly tested, which has created a resilient business,” Barry says.
To download and read FIA Insight (the article in question is on page 6), please click here.