Home > News

According to Alan Fritz, Executive Head of Marketing and Sales at Bestmed, South Africa’s medical industry cannot function without brokers. “Clients see brokers as impartial and tend to listen more to what they have to say to them. They believe that they act in their best interests and will in turn provide them with solutions that best suit them, without punting a specific scheme or its products. The brokers are deemed to be well equipped to provide the best advice on benefit options,” says Fritz.

South African brokers operate in a highly regulated environment, which poses challenges for these intermediaries. They are guided by the Medical Schemes Act of 1998 and the Financial Services Board (FSB) regulations.

The Medical Schemes Act of 1998 states that any person desiring to be accredited as a broker must apply in writing to the council. The application must be accompanied by documentary proof of a recognised educational qualification and appropriate experience, among other documentation.

“This legislation,” points out Fritz, “sometimes inundates the brokers with detailed administrative functions and expensive compliance, which contributes to a number of well-qualified intermediaries leaving the industry.”

The Minister of Health’s regulation of the R69.00 plus VAT as an amount payable by medical schemes to brokers with effect from the 1st May 2012 has also created challenges for the broker environment. “This current remuneration is viewed as insufficient considering the work that the intermediaries undertake. The only way they can make money is when they have bigger client volumes and this can only happen over a long period,” says Fritz.

Sasja La Grange, Corporate Communications’ Manager at Bestmed adds, “As a medical scheme, we appreciate the value of regulations, because there are those few intermediaries who are not honest in their conduct. We therefore fully endorse the FSB stringent regulations as it deals with such issues.”

In order to ensure that brokers perform to their best abilities and meet the challenges in the industry, it is incumbent on medical schemes to ensure that brokers receive necessary training and understand what that particular scheme’s offerings are. Ongoingconsultation and training are a necessity in this industry as brokers tend to migrate to schemes that they can work with whilst also providing them with opportunities to make their work simpler and more efficient.

La Grange comments that intrinsic to good brokerage, is the weight behind a brand, financial stability, good corporate governance and growth. “Brokers select a few schemes to work with. They’ll make sure that they understand these schemes’ languages and will sell their products. It is all about alignment. The broker industry is also categorised to provide different solutions for different needs.”

In conclusion, both Fritz and La Grange believe that solid relationships, accessibility and training are the key aspects of assisting brokers deal with the challenges that they are faced with. They are of the opinion that the 3% statutory commission is insufficient as compared to the work that the brokers do, in terms of educating potential members, ensuring that members get the right solutions for their unique needs and all their administrative duties.

“It becomes important to ensure that we lighten their workloads by giving them solutions that will leave them well equipped to provide a service to the customers. Lastly, as an important part of the industry, we need to recognise the brokers for the contribution they bring to the industry and the economy of this country. We believe that more brokers will stay in their field when they feel that they are acknowledged and offered the right tools to provide an efficient service,” they say.