Whither the UMA?
Paul Hancock, Divisional Head
Infiniti Specialist Solutions
The UMA business model in South Africa has of late been characterised by a significant shift from independent UMA, to one of becoming a division of the Principal. At the same time, new UMAs are still coming to market. Paul Hancock, Divisional Head of Infiniti Insurance Ltd Specialist Solutions answers some questions on current issues, in the vibrant UMA Sector.
What characterises successful UMA's? What would you say they are doing differently?
A successful UMA is one which can differentiate its product offering from the market, has a unsurpassed skills set as well as the ability to price risks correctly. The level of expertise is fundamental in that this differentiates the UMA from a traditional carrier. Furthermore, a UMA usually has outstanding relationships with its brokers due to its service levels. These relationships are sacrosanct to the UMA model. General UMA’s need to differentiate themselves via service or focussing on niche aspects of general commercial and personal lines business.
What are brokers looking for in a UMA and how are UMA's responding to this?
Brokers want a product that meets all the expectations of the policyholder. Brokers will thus look for the most effective and efficient manner in which to achieve this result. That is where a UMA with specialist skills and expertise can render such a product.
Do you foresee UMA numbers growing or shrinking in the near future? What would the reasons be for this?
My personal view is that, substance over form, the number of UMA’s will decline as many will be divisionalised into existing carrier partnerships. The main reason will be for reasons such as cost savings, not duplicating governance requirements and for the carrier to preserve the business.
Do you think divisionalising of UMA's will become a trend?
Have you seen a change in broker/UMA dynamics since the Binder Regulations?
Not really. As stated above, the relationships held between UMA and broker are sacrosanct and are based on more than just remuneration factors. However, no one can deny that some UMA’s and brokers get attracted by insurers who are prepared to pay higher binder fees. The Retail Distribution Review (RDR) should begin levelling the playing field with regards these types of matters.
How do you think this will be impacted by the RDR?
Very positively if the objectives of the RDR are realised. One of the RDR objectives is to ensure fair remuneration for sound advice and service. Again this is to try and maintain reasonable parameters, yet still promoting the principles of free-enterprise. However, there is still a long way to go in finalising the RDR and one size does not fit all.
Is the competition between underwriters to attract UMA's a good thing or not and do you think UMA's switch underwriters too easily?
I believe in the principles of free-enterprise and the freedom of choice. In essence, if the carrier does not display client centricity towards its business partners then its business partners will seek alternative relationships that do display such characteristics.
How do you compete as an underwriter in attracting UMA's
This is through relationships, offering flexibility as opposed to rigidity and a brand that offers and rewards innovative thinkers.
To find out more about Infiniti’s wide range of coverages available through its specialist UMAs, visit us at www.infinitiafrica.com.
Infiniti Insurance Ltd
Breaking News »