Description

The financial crisis of 2008 was, amongst other economic factors, brought about by unscrupulous and over-confident lending practices by financial institutions and overzealous lenders. The effects of these behaviours were magnified by a lack of regulation and management discipline and diligence (Grosse, 2012). The recuperation of the global economy and future prevention efforts of another global crisis led to more stringent regulatory controls in the financial services sectors of territories such as Asia, Canada, Latin America, Europe, the US and South Africa (EY, 2014a).
Several years on, regulatory intervention is as strong as ever, with the aim of driving financial education amongst customers in the financial services sector as well as creating standards that all insurers have to adhere to in terms of product design and marketing communications, according to a KPMG (2014) South African Insurance Industry Report. The question that arises is whether all the focus on regulatory compliance is to the detriment of the marketing activities within organisations, or if the role of the marketing function needs to change.
The aim of the study was to determine what challenges the regulations place on marketing strategies in the long term insurance industry in South Africa. A qualitative, and more specifically case study, approach was used to explore the research problem and answer the following research questions:
i. What challenges arise from the regulations in the long term insurance industry in South Africa, with regards to marketing activities?
ii. What is the role of leadership in overcoming the challenges identified?
iii. How can the challenges identified be overcome or the effect thereof minimised?

The case study method used is an embedded single case study design from an intrinsic perspective (Baxter & Jack, 2008). The case for this study can be defined as FNB Life, a life insurance company operating under the umbrella of First National Bank in South Africa.
The study found that the regulatory pressures in the long term insurance industry pose challenges to marketing strategies and activities. These challenges stem from operational, financial and strategic perspectives, and introduce frustration, anxiety and ambiguity to the marketing function. However, there is an overwhelming consensus that the intentions of the regulations are good for the industry which are there to protect customers, which as an ethically sound business is what FNB Life advocates. There is also agreement that the leadership team is steering the organisation in the right direction in order to deal with these regulatory pressures, whilst still supporting an innovative marketing strategy.
However, it has become apparent that a change is needed in how the marketing function is structured and how it performs its day to day tasks in order to overcome these regulatory challenges and perform optimally. Leadership has a responsibility to recognise the challenges faced by the marketing team and to put structures and support systems in place in order to allow the marketing function to deliver great value to the business.