Insurance is often viewed as a price-driven purchase - but that’s no longer the case.
Previously, clients compared premiums, brokers sourced quotes, and the lowest price frequently won the conversation. But the traditional price-led brokerage is on its way out. In its place, a more sophisticated, data-driven advisory model is emerging – one where the broker functions less as a transaction handler and more as a proactive risk partner.
Risks are becoming more complex and value matters more
Cybercrime, business disruption and climate-related risk are rising rapidly - as are the costs of repairs and recovery. For both consumers and businesses, the cost of disruption is rising.
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 they are responding to risk advice. Rather than wholesale cancellations, consumers are adding risk-management measures, switching providers or strategically adjusting cover. They value security over a slight monthly saving.
Clients are looking for trusted advisors 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.
How technology is enabling this shift
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 insurance innovation.
As a result, technology in the insurance industry is driving a surge in AI-driven tools designed to generate renewal comparison reports and facilitate self-service journeys via platforms such as WhatsApp.
Digital and AI-driven tools are removing the operational burden and freeing capacity for forward-looking risk conversations. For independent brokers, it’s even more important to leverage insurer-supplied digital infrastructure in order to compete with larger companies.
Specialisation is becoming a competitive advantage
As risks grow more complex – ranging from cyber threats to global climate volatility – the technical fluency required of a broker has increased significantly. The industry is moving towards a fee-for-service model where brokers monetise their expertise rather than simply earning commission on transactions.
This evolution requires a commitment to continuous learning. Brokers must become more data-aware, consultative, and technically fluent. Those who focus on specialised areas such as cyber risk or sector-specific infrastructure risks are finding new growth opportunities, even as traditional markets such as personal lines become increasingly competitive.
Globally, there has been discussion around industry consolidation, similar to the private-equity roll-ups seen in the United States. While South Africa is experiencing increased merger and acquisition activity due to rising regulatory and compliance burdens, the trusted advisory layer remains essential. Santam's research indicates that 78% of businesses and 56% of consumers still rely heavily on brokers because of the inherent complexity of insurance. In many sectors, such as hospitality and agriculture, brokers have in-depth industry knowledge that helps clients to stay ahead.
How small brokers can stay competitive
Small brokers can continue to thrive, provided they do not attempt to compete on the size of their technology stack. Instead, they should focus on:
- Moving into niche markets where specialist expertise is required
- Adopting automated workflows to maintain speed to market
- Transitioning from reactive quoting to resilience planning
What is becoming increasingly clear is that the window for purely price-focused brokers is closing. Brokers who have not adopted a trusted risk advisor positioning may increasingly 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.
How to find an insurance broker
Santam has over 108 years of experience in delivering insurance that’s good and proper. We understand that each client has different needs and requires the cover that’s right for them, and our intermediaries bring specialist knowledge and industry insight. If you’re looking for an insurance broker, you can contact us online, and we’ll get back to you with a quote.