The Hollard Insurance Group (Hollard) established in 1980, is the largest independent, privately owned insurance group in South Africa and provides both life and short-term (non-life) insurance. Hollard has a long history of working in the low-income market and views the market as a core element of its strategy in South Africa and internationally.
Key to Hollard’s sustained growth has been its partnership philosophy, which permeates all of Hollard’s day-to-day activities. The philosophy is focused on recognizing like-minded partners, understanding respective strengths and driving long-term value through optimized structures to ensure mutual success.
In 2008 Hollard sought funding from the Microinsurance Innovation Facility to explore how to deliver voluntary short-term insurance (e.g. household structure and contents) to the low-income market in South Africa and the region.
In South Africa, only 11 per cent of adults have asset insurance, 10 per cent have life insurance, and 10 per cent have medical insurance, whereas 46 per cent have funeral insurance (albeit 20 per cent of funeral cover is made up of informal burial societies). In the low-income market, penetration of short-term insurance is particularly low; less than 2 per cent of the poorest 60 per cent of the population have asset insurance.
The aim of the project is to assess whether short-term (non-life) insurance is a viable proposition in this market, focusing on asset-based insurance such as household structure and contents cover.
- Redevelopment of the claims processes: Using low cost runners to reduce the cost of claims assessment through the use of technology
- Market education: To support effective decision-making and brand awareness. High quality market education will be needed to create an understanding of the benefits of insurance. This will also allow interaction with the distribution channel. The majority of potential consumers have not had access to short-term insurance. It is important to educate and inform them before marketing products.
- Market insights: It is important to gather all experiences and use them to inform next steps. Formal and informal data collected needs to be analysed on an on-going basis
- Management of call centres selling the product: Experiences gathered from selling Jet Home Protect (JHP) through a number of call centres show that selling this product is different from selling other insurance products.
- Allow the low-income market to pay premiums in cash
- Be flexible with regards to the date customers pay their premium each month
- Permit customers to make lump sum payments or partial payments to account for erratic cash flow.