insurance conference june 2012. building a sustainable financial services industry problem...
TRANSCRIPT
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insurance conference june 2012
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building a sustainable
financial services industry
Problem statement: Financial services facing a crisis of confidence
are we losing the battle of public opinion?
the regulatory response
an over-reaction?
the industry response
are we fuelling the fire?
How should we as an industry, respond?
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Financial Services – A crisis of confidence
The financial crisis started 4 years ago
Have we learnt any lessons?How does the world perceive us?
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Have we learnt any lessons?
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building a sustainable
financial services industry
How does the world perceive us?
CEOs rolling in money and
stock options
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there is
no place to hide
“Consumers are the only important group in the economy who are not effectively organised, whose views are often not heard.”
JFK, 1962
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the regulatory response?
to name but a few…
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the regulatory response?
to name but a few…
binder regulations
FSLGAB
SAM
TCFCPA
microinsurance FAIS regulations
re exams
FAIS regulations conflict of interest
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we need to consider the intent:
eliminate conflicts of interestcreate greater transparencyensure enforceability provide financial securityensure professionalism
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how many consumers understand who they are buying protection from
and who is getting paid for doing what?
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regulatory response
an over-reaction?
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regulatory response
an over-reaction?
•2011 economic losses to date are approaching USD400 billion while the average from 2004 to 2010 was USD89 billion.
•Global catastrophe losses in 2011 = $ 100bn.
•Lloyds net losses in 2011 = $ 20.5bn.
There will be no material impact on the Central Fund
RichardWard:CEOofLloyds
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the industry response
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how much of this promotes our
industry?
annual advertising spend
for short-term insurance is R1,5bn
the industry response
fuelling the fire?
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Occupationalgroup
Currentemployment
Retirement Mortality Leaving theSector
Total ReplacementDemand
Newemployment
Total Positionsto fill
Managers 14 789 591 295 443 1 329 295 1 624
Professionals 26 672 800 533 3 200 4 533 2 133 6 666
Technicians andTrade Workers 1 872 56 37 224 317 74 391
Community andPersonal ServiceWorkers
342 0 6 10 16 13 29
Clerical andAdministrativeWorkers
45 249 904 904 2 262 4 070 2 262 6 332
Sales Workers 13 931 278 278 696 1 252 696 1 948
MachineryOperators and Drivers
267 5 5 13 23 10 33
ElementaryWorkers 1 024 20 20 51 91 40
131
Total 103 744 2 654 2 078 6 899 11 631 5 523 17 154
the industry response
War on talent
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Not surprising the top two issues dominating CEOs’ time – regulation and talent!
the industry response
war on talent
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"Mark and his signature hoodie: He's actually showing investors he doesn't care that much; he's going to be him," Michael Pachter, an analyst for Wedbush Securities, said in an interview on Bloomberg TV. "I think that's a mark of immaturity. I think that he has to realize he's bringing investors in as a new constituency right now, and I think he's got to show them the respect that they deserve because he's asking them for their money."
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How do we, as an industry, respond?
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Ours is a noble purpose
But do we do enough to protect our industry?
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Our problem isnot unique
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There are examples of
leadership
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[Changepicturetosomethingmorerelevant]
We need to work with
all stakeholders
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including the regulator
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wrapping things up
conclusion
Ours is an industry in a state of transition
facing a crisis of confidencethe need to project a positive imagea collective responsibility requiring individual leadershipunited behind our noble purpose
so let’s be……..
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