IEMAS INSURANCE BROKERS – Your Caring Partner, More Than Ever Before

The historic Iemas Insurance Brokers business, based in Centurion, is part of a leading financial services cooperative – the largest in South Africa. Established as the Iscor Employee Mutual Aid Society in the 30s, Iemas has a long history and has been a dedicated servant to its clients through social, political, economic, and historic cultural changes.

In the early 90s, Iemas broke away from Iscor (now Mittal Steel) after being classed as non-essential asset. Opting to focus on its core – steel production – Iscor allowed Iemas to become an independent entity. The name Iemas had become so well known in the market that it was decided it would be kept but not as an acronym – as a name that inspires care for customers.

Iemas Financial Services was formed, and after more than two decades it became clear that the insurance side of the business needed its own focus. So, in December 2016, the Board of Iemas Financial Services accepted the recommendation of management that a new company should be formed to focus solely on insurance broking.

“Iemas Financial Services has its own FSB license and the insurance business was originally created to secure the assets that we financed in terms of vehicles,” details Executive Director Piet Wolmarans. “Over time, that has evolved into other classes of insurance as well.

“In April 2017, we became fully operational and I was personally involved, leading the project. A lot of operational things needed to happen – we had to register the company as a wholly-owned subsidiary of Iemas Financial Services; we had to transfer all contracts from service providers at the time; we had to move over employees; and get all operational capabilities in place as required by the Financial Service Conduct Authority.

Now a FSCA-registered member and a holder of its own FSB license, Iemas Insurance Brokers is looking to the digital future with an appetite. It offers hand-picked shot-term and long-term insurance products, including car, home, life, and business lines.

DIGITISING

In February, EY detailed how insurers in emerging markets are embracing a digital future. “While mobile and digital applications are targeted to specific markets, such as funeral insurance, major initiatives are transforming back-office operations to become more cost-effective and reliable,” said the EY report.

According to Oxford Economics, 37% of South African customers use their mobile phones or computers for the initial process of browsing and identifying policies. Clearly, digital R&D and investment is necessary, and Iemas is already well-positioned in this regard.

“We have already created operational capacity in the business from a systems and operations perspective. We acquired two systems for both short-term and long-term,” says Wolmarans. “We cemented a very strong product basket from prior 2017 until now where we have more than 20 product partners and more than 50 product variances in our space. We have created an array of digital functionalities on our platform, for our website and mobile. We can do online quoting for short-term insurance; we have developed a mobile app which has a very interesting component where our members can refer friends and we can track that and reward them. We have developed a digital self-serve portal for financial planning – including retirement, disability and death – so that people can go and discover for themselves. We have a totally online solution for funeral, life and disability, backed by a team of advisors. We have moved forward with robotics – we can now sell funeral cover without any human intervention whatsoever. It pushes data through to the client, they can take the product, we can issue the policy, without any intervention from a human.

“We also have a team of field agents that are ready to assist our members if they prefer not to transact online and they can help in a very quick, efficient and friendly manner,” he adds.

As a broker, Iemas is reliant on quality products of its partners and chooses on the best insurers to work with. As the market changes, and as the company looks to become more digital in its offering, new partners are coming on board and already delivering fantastic results for members.

In May 2019, Iemas partnered with Cape Town-based Simply – an insurtech start-up – to help digitise its online platform.

“It is part of our strategy to make sure we partner with the fintechs of the world to ensure we get that end-to-end delivery. Simply is a fintech intermediary and we have developed a digital solution containing life, funeral and disability in once combo. It’s good on an individual level and also at group level. If an employer wants to insure a group of employees; this is four quick steps, without any underwriting or paperwork. It’s very efficient and very beneficial,” states Wolmarans.

“The partnership brings together innovative life insurance products and a strong grassroots distribution network. Through this partnership, we can reach far more customers than we could independently,” says Simply CEO, Anthony Miller.

For Iemas, the platform creates ease of transacting for the client and helps to keep prices at an affordable level compared with traditional insurers.

“We have rolled it out and received feedback from the market, and we are now busy rolling out again with some additional product features. We are looking forward to a long-term relationship there,” confirms Wolmarans.

As innovative, new solutions come to the market, such as modular insurance where users can ‘turn on and turn off’ insurance for specific periods of time (for example, when a car is in use and when it sits in the garage), Iemas is keeping track of developments and positioning itself to deliver what its members require.

ENSURING ORGANIC GROWTH

Servicing a large customer base from 31 offices around South Africa, Iemas Insurance Broker’s 200+ people are always on the lookout for growth. The company will not invest in new office space unless necessary through acquisition, but developing a healthy countrywide spread is certainly on the agenda for Wolmarans. 

“At the moment, our strategy is for organic growth,” he says. “We are looking at the market where there is currently consolidation. There are independent brokers that may be viable for us in certain areas so we could look at that, and that would come with infrastructure if available. We will follow the Iemas Financial Services model and open up offices if and when they do.”

In a strained economy where GDP growth remains weak, unemployment remains high, and with the global economy facing the COVID-19 pandemic, major physical expansion is often no longer an option. This is why the digital roll out has become an important growth strategy.

“We are cost conscientious, especially in this day and age, and we are trying to push digitalisation to manage costs,” Wolmarans explains. “There will always be a balance between bricks and mortar and digital. At the moment, we are widely spread and we are where we want to be. If new employer groups come on board and we need to expand, we will certainly look at it.”

Where growth of the business can really be achieved is through accessing new groups for each product. Currently, Iemas Insurance Brokers in strong on the short-term side in mid- to high-income market, and strong on the long-term side in the mid- to low-end market. In the future, Wolmarans is keen to use digital assets alongside other strategies to bolster market presence in all sectors, for both short and long-term insurance.

“We are in the middle to higher market through our wellness hub and our digital offering where people can access the services online easily. The need that we have identified for that market is for a face-to-face distribution. We are looking at different distribution models and how we can partner with some of the product providers to deliver through a new channel.

“We foresee that in 2020 we will be in a position to roll that out – we are far down the road of investigating options,” he says.

INDUSTRY WITH OPPORTUNITY

Unlike some developed markets, the insurance industry in South Africa – and Africa – remains relatively fertile and provides many opportunities for companies that enter with the right proposition.

According to PwC, Africa’s insurance industry is largely underdeveloped, and insurance penetration levels are very low by global standards. The African insurance industry has also been in a state of continuous disruption since the 2008 global financial crisis, and growth has been sluggish.

For Wolmarans, a veteran of South Africa’s industry, there is certainly more that can be done and it all starts with education.

“The market is divided in three segments. Affluent, middle, and lower. In general, I think the products and solutions on offer from insurers are well-defined and suit the needs of the individual,” he says. “I think there is still a lot of education needed to inform the wider population of the benefits of these products and the different solutions that are available.

“From a regulatory perspective, at the lower end of the market, the regulator is doing a great job of cleaning up the market and making it more professional, ensuring proper advice is rendered to the population. The regulator could perhaps relax at entry level to create more jobs, keep more people in the industry, and attract younger people – it has become a little cumbersome because of regulatory compliance issues.

“The majority of vehicles on the South African roads are still uninsured,” he adds. “We do not have compulsory third-party insurance and there is room for expansion. The regulator and government could easily introduce compulsory third-party insurance; from a business perspective, there is a lot of room to move people who are underinsured to insured. There is certainly room for product development to make insurance more accessible and more attractive.”

South Africa’s roads are not the only place where insurance has not yet realised national uptake. Currently, only 6% of the South African population is in a position to retire. Very few have appropriate savings and investments plans in place and Iemas is confident that people could benefit.

“As hard as we try to ensure people understand the need for insurance, there is still the perception of it being a grudge purchase and other things coming first.

“There is massive opportunity to get out there and educate and we are heavily involved in that with our target market so that people understand the risks involved.”

But how do you go out and improve share in a growing market when faced with a raft of quality competition from both international and local businesses? According to Wolmarans, you must be transparent and clear for customers.

“You have to clearly define your operating model – what you want to do, who you want to do it with, and how you want to do it,” he says. “We are clear on our target market, our product range and our value proposition. We try to create a value proposition around providing financial wellness throughout the lifecycle of the individual from when they leave school through to post retirement. We build a journey alongside our market through their lifecycle.”

For Iemas Insurance Brokers, business is about leaving a lasting impression and caring for clients. It’s not about pushing whichever product will make a large commission. This is what differentiates the company from the rest.

“Commissions will come at the back end, as long as you provide quality advice and ensure there is a holistic approach for the customers so that they come back to us,” confirms Wolmarans.

DECADES DOWN, DECADES DUE

After many decades of success, Iemas Insurance Brokers is not resting on laurels and looking backwards at what has been achieved. There is a hunger throughout the business to impact the lives of as many people as possible, bringing much-needed products to people around the country.

For Wolmarans, continuing to deliver in the future will come down to three elements of the business that he is confident the company has already mastered: “Our products, our processes, our services.

“We must stay abreast of best practice and develop in all key areas, but the real differentiator is that we walk the walk with our customers through good times and bad times, providing proper advice, even if we don’t sell a product. It’s all about building trust so that people have confidence in what we are telling them. That will remain a game changer for us – we are selling an emotional product so trust is vital. That will always be at the heart of the way we repeat going forward.”

With financial services one of the only positively contributing sectors of the economy in the final quarter of 2019 (2.7% increase within a wider 0.8% contraction), it is vital that reliable and strong businesses are allowed to thrive.

“The economy is a concern, enhanced further by the coronavirus, and low growth impacts employment,” admits Wolmarans. “Looking at the SA economy, there are a number of public and private enterprises busy with downscaling and this has an impact on the wages of employees. Our experience is that there is less take up of new solutions because there is less disposable income, and there is a higher chance of cancellation. We have seen our number of return debit orders increase but, at the same time, our opportunity is to make sure we put proper retention strategies in place to ensure that individuals under financial burden or stress can talk to us and we can then look at their portfolio and find alternatives where possible.”

The worst thing you can do, he says, is to simply cancel insurance policies leaving yourself unprotected against real risks.

In the motor space, the better choice is to engage with Iemas and discuss alternative cover – perhaps moving from comprehensive to third-party.  

There is always a solution, even in the toughest of times, to ensure that stakeholders are continually empowered to make sound financial decisions. This mantra will help the business to further develop its reputation for future generations.

“We’ve been around for many decades and I’m sure we will be around for many more,” insists Wolmarans.  

“Our long-term vision, backed by our board and management team, is to make sure each and every member of the cooperative is assisted with a financial wellness road map. If we can achieve that, the numbers will follow.”

This is one of the companies truly driving the roll out of proper insurance cover across the country, and helping to ensure long-term financial independence for members. If Iemas can continue to develop the trust that Wolmarans cites as so important, the business and its members will be happy.

“Our purpose is to benefit our members. Our dream is to be the preferred broker. Our brand promise is to be a caring partner in insurance. That is the model to which each and every employee here works to – even if you don’t sell, provide quality advice properly,” he concludes.