“South Africa’s insurance market is ripe for tech disruption,” says Anthony Miller, CEO of Cape Town-based fin tech startup Simply Financial Services (Pty) Ltd.
Miller, a tech and data entrepreneur, and partners, actuaries Simon Nicholson and Shaun Dippnall, launched Simply just a little over six months ago to apply their industry expertise, in combination with new technologies and data intelligence, to make a social impact in South Africa.
The business aims to secure the financial futures for South Africa’s mass market by selling easy-to-understand, affordable life insurance products (that are up to half the cost of comparable policies on the market) in an industry that writes up R8,5-billion worth of business a year.
“When a bread winner dies in South Africa and many other emerging economies, his or her dependents are often consigned to poverty – that’s the harsh reality many face in our country,” Miller said.
Miller added that South Africans are also often significantly over-insured when it comes to funeral cover – a high proportion of South African adults have at least two funeral policies, many of which are very expensive.
“A large percentage too of the 14 million South African households earning under 30k per month do not currently have life insurance, as many feel it is too expensive and find the sign up process daunting,’ he added.
Simply sells life, disability and funeral insurance “combo’s” designed to meet people’s needs in a way they understand and at a price they can afford. The products are designed for a mobile first environment, understanding that most South Africans do not have access to the Internet other than on their phones, although a significant percentage of sign-ups are done through Simply’s call centre.
Life, disability and funeral combinations
Simply products are life, disability and funeral combos, available for as little as R59 a month, depending on the level of cover selected. Signing up is simple too. The entire online process takes less than 10 minutes, requiring the individual to fill in some personal details, answer three health questions and, should they qualify, receiving immediate cover. No blood or medical tests are required.
Cover is limited to claims caused by accidents for the first six months, which is usually standard in products with limited pre-screening. This ‘waiting period’ is made very clear in all the company’s marketing materials and client documents, so that it is understandable to the policy holder.
“The value (in financial terms) that these products offer is also substantial. Often, for the price of funeral cover that other companies provide, a full combo of Simply life + disability + funeral products (or whatever the customer chooses) could be provided. A simple comparative quote takes just 10 seconds,” Miller said.
Simply has started selling two initial products: Family Combo’s: Life, disability and funeral cover for breadwinners earning between R5 000 and R25 000 a month. Employer Combo’s: Life, disability and funeral cover for employees, paid by their employer. The product is designed for domestic employees, but is also great for small businesses.A similar product is being developed for SMME employers as well and will be formally launched next month.
Using technology and an innovative operating model helps ensure that Simply products deliver great value and costs are kept to a minimum. For example, a 30-year-old woman earning R4 500 a month gets R100 000 life cover, R150 000 disability cover and R15 000 family funeral cover (covers insured life, spouse and up to five children) for R92 per month. Cover is limited to R1.5million life, R1.5m disability and R50k family funeral in the Family Combo, and R200k life, R400k disability and R50k family funeral in the Employer Combo.
While these combos are offered to suit clients’ needs and pockets, clients are also free to customise their cover by removing one or more benefits, and/or adjusting the amount of cover they want.
By focusing on product design, data-analytics, software development and marketing — and outsourcing ‘commodity’ services to best of breed partners — Simply products aim to materially reduce the cost and complexity of mass-market life insurance and pass the cost benefits onto the customer.
Cutting the middle man
“South Africans are increasingly comfortable with buying online and confident about making their own choices, without the presence or influence of a broker,” Miller said.
“Simply allows customers to cut out the middle man and buy an affordable policy for themselves online, in under five minutes,” he added.
Simply policies are underwritten by Old Mutual Alternative Risk Transfer Limited and reinsured by RGA Reinsurance Company of South Africa Limited.
In line with its focus on social impact and concern for financial sustainability among its customers, Simply has introduced a programme called #SimplyMoney, which provides free financial education and money management tips.For more information about Simply, go to www.simply.co.za. For further information or to interview one of the partners, call Anthony Miller on 0823525655