It’s crazy to think that in a country with a population of around 60 million people, for over 80% of the population there’s really only one insurance product available to protect them should they experience a life-changing event, funeral cover. For decades, there has been little-to-no innovation in the life insurance space for this segment of the population. Innovations and improvements have centred on the 20%, creating an innovation inequality that mirrors the broader inequalities that persist in South African society. So, we decided to switch things up and innovate for those who need it most.
“The premiums are small, it’s not worth our time and capital…”
That’s the argument we’ve heard time and again from the big, traditional insurers as to why they aren’t innovating for the broader market, and only for the middle-to-upper income affluent consumer.
Yes, historically the cost of developing a new product and entering this market would have been high, but we’re living in a new world. Rapid prototyping and development, better access to resources and skills, cloud computing, the proliferation of Software as a Service (SAS) companies and digital distribution channels significantly reduce the cost of developing and entering this market, so there’s no longer an excuse.
It’s as if the life insurance industry has turned a blind eye to this important and vital segment of the South African population, the segment that needs protection and help the most.
This segment, just like any other market segment, has multiple complex financial needs. They have debt, housing costs, living costs, transport costs and yet, should they experience a life-changing event such as a disability, they have no mechanism (apart from relying on minimal Government grants) available to them to protect them and their lifestyle. It’s a fundamental problem that has contributed to the continuation of the poverty trap for decades.
Let’s not kid ourselves, there are real challenges…
Despite the need for these products and the importance they could play in uplifting families and stopping the poverty trap, there are serious obstacles that need to be overcome in order to innovate for this market.
Any product needs to be affordable, they need to be simple, they need to provide significant value which overcomes the perception that insurance is a pure expense with no value attached if no claim is made, and most importantly, there needs to be a clear understanding of the need for the product.
These are not simple challenges to solve and have been exacerbated by decades of exclusion from the formal financial sector.
As an illustration of one of these challenges, when you say ‘Disability cover’ to the average consumer in this market segment, the odds are that they do not understand the need for this vital component of the financial planning portfolio. More so, given the perceived ability to rely on the government for such life changing events, the value of this purchasing consideration will fall below their other day-to-day living expenses.
Then there’s the price and complexity challenge. You need to design a product that balances comprehensiveness of cover, premium and complexity. It’s like trying to solve an impossible triangle; the cover needs to be comprehensive, but the more comprehensive it is, the more expensive and the more complex. How do you design an affordable and simple disability product, a product that by its very nature is complex?
So, we decided to think about the problem a little differently.
Instead of providing disability cover, that’s too expensive, complicated and has no clear understanding of the need for the product, what if you created micro-disability products that instead protect individual needs?
What this means, is that if you look at disability cover, for example, the payout from this product, from a financial planning perspective, is typically used to assist in covering your living expenses should you become disabled and unable to work. It’s used to cover your debt costs, grocery costs, your children’s education costs, your transport costs, housing costs and so on.
By creating separate, needs-matched products that enable you to protect these individual financial needs, you can create individual products that are simple to understand, affordable and importantly, where there’s a clear understanding of the need for the products. So that’s exactly what we did.
But we wanted to do more…
We want to design products that don’t just protect…we want to uplift and empower South Africans to lead better lives
We wanted to design products that didn’t just provide protection, we wanted to design products that could genuinely uplift and empower South Africans to lead a better life, helping to contribute to making ‘the 80%’ feel like ‘the 20%’ and hopefully a more prosperous society at large.
The result, was world-first products that provide needs-matched protection if you claim and large needs-matched payouts if you don’t, ensuring you derive enormous value from your product, whether you claim or not.
You can get the Dream Car Plan, University Wallet Plan and Five-Star Food Plan, all products that provide life and disability cover if you claim, and if you don’t, you get cash payouts designed to meet specific needs. For example, if you don’t claim, you can get R500,000 cash to help buy your dream car, R250,000 cash to help send your child to university so they can achieve their dreams, or R100,000 cash so you can put food on your family’s table for years. And all, from only R1.50 per day…
We’re also working on a bunch of other new products which will launch soon, ensuring that no matter who you are, where you come from or what you need, we can be there for you and hopefully assist in changing your life for the better!
Looking to change your life too? Then take a look at our Living Plan Range, it only takes 5 seconds to get a quote. 😊