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25 September 2019

SA Insurance Sentiment Index highlights market conduct risks and opportunities

Consumers prioritise ethics and fairness as insurers face new TCF rules.

The 2019 South African Insurance Sentiment Index assessed consumer sentiment towards nine insurers in 231 177 social media posts from 1 November 2018 to 30 April 2019, with a 95% confidence level and 0.2% margin of error.

South African consumers are no strangers to the power of social media in raising complaints, especially when they feel they have been treated unfairly. The implications of this feedback have far-reaching consequences for the entire insurance industry.The 2018 Momentum-Ganas case demonstrated the capacity of public opinion to influence the policies and practices of the entire insurance industry.

The notion of fairness is at the heart of the new outcomes-focused market conduct regulations contained in the Conduct of Financial Institutions Bill that is likely to be tabled in Parliament in 2019. Amongst other things, the bill will give legislative effect to the principles-based market conduct approach known as Treating Customers Fairly (TCF) and promotes the fair treatment of customers by financial institutions. TCF requires that organisations go beyond just considering the letter of the law and contractual agreements, and place emphasis on the spirit of an agreement with a consumer.

DataEQ mapped conversation to seven fair practice conversation categories: marketing and sales, culture and governance, information and communication, claims, people-related, product-related, third parties and service providers. The categories were developed by combining the FSCA’s six TCF principles with functional business units in FSPs.

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