Amidst uncertainty and heightened risk, it is natural to feel anxious or pessimistic about the future, but maintaining a sense of perspective and optimism is crucial and empowering.

This was the message from the recent annual Elite Wealth Conference, hosted by Elite Risk Acceptances, a leading high-net worth insurer and subsidiary of Old Mutual Insure.

“The South African insurance industry is facing a myriad of complex risks. Responding can lead to discomfort and unhappiness. It is a challenging environment to operate in, especially for brokers who must keep a cool head and demonstrate emotional intelligence to navigate these changes,” said Tarina Vlok, MD of Elite Risk, commenting on the relevance of this year’s conference theme: ‘Embracing Change, Choosing Optimism, and Ensuring a Prosperous Tomorrow’.

Soul Abrahams, Chief Executive of Retail Strategy at Old Mutual Insure, echoed this sentiment, stating that the business is in a more positive mindset compared to twelve months ago. “We are seeing opportunities where other insurers are closing their doors or exiting the market,” he said. “In the wealth sector, in particular, inflation has been significantly higher, with weather challenges contributing to that. Despite this, we aim to maintain perspective about our loss-ratio position until the end of the year.”

Carolyn Thompson, Executive: Product, Underwriting, and Pricing at Old Mutual Insure (OMI), presented an in-depth analysis of the risks currently facing the insurance industry from climate change. She discussed how Old Mutual Insure is working with data experts to better understand the risk environment.

“Insurance has become more valuable than ever before,” said Thompson, commenting on the increasing severity and frequency of catastrophe (CAT) claim events. “We must work hard to ensure that the industry remains sustainable.”

She added that globally, risks are becoming uninsurable. “In California for example, at least 72,000 policies were not renewed due to the risk of wildfires in those areas having become uninsurable. We cannot let that happen in South Africa.”

She said that for insurance to be sustainable, the right price must be charged for cover that reflects the true cost of risk in the current volatile climate.

“We are exploring sophisticated modelling techniques and innovative solutions to better quantify the rising climate risks and to more accurately price them.”

Brent Lindeque, SA’s Good Things Guy and founder of SA Good News inspired the audience with his stories of ordinary South Africans making a remarkable impact through simple acts.

“Everyone has the power to do good. We have the power to change any situation. Life is about how you react. If you lead with kindness, it can change the world,” he said.

Lindeque reminded the audience that there is always another, more positive narrative than the one we have been told, but “you have to look to find it.”

Justice Malala, one of SA’s most prominent independent political voices, reminded audiences that although the country’s new political situation was unchartered territory, the country had been here before. “It is important to remember that we have good legislation, rule of law and a sound constitution. Politics is not above any of these things.”

He illustrated that the risks we face today are not necessarily more acute than those we faced thirty years ago during our first democratic election.

“We often worry about the impact of politics on our wealth, but in many instances, it is not what makes us poorer. It is the perception of it, but not the reality of it,” he said.

When examining the causes of bear and bull markets from 1965 to present, politics did not cause these events; rather, market events did.

Tarina Vlok emphasised the ongoing importance of the relationship between brokers and insurers in navigating the current landscape.

“This partnership will be crucial in ensuring the resilience and sustainability of the insurance industry in the face of evolving risks and challenges,” concluded Vlok.