SOUTH AFRICAN INSURANCE ASSOCIATION

1
.
SOUTH AFRICAN INSURANCE ASSOCIATION
2
Access to financial services
presented by
Leila Moonda
26th August 2005 PCOF
3
Transforming the short-term insurance industry

• History
• Goals
• Challenges
• Progress

4
History

• The Financial Sector Charter, which was signed in
  October 2003, effectively commits all signatories
  to actively promote a transformed, vibrant and
  globally competitive financial sector that
  reflects the demographics of South Africa and
  contributes to the establishment of an equitable
  society by effectively providing accessible
  financial services to black people

5
History cont.

• Effective access to short-term risk insurance
  products and services means
• appropriate and affordably priced
• made available through appropriate and accessible
  infrastructure
• to 6 of black persons in the LSM (Living
  Standard Measures) 1-5 grouping by 2008

6
Goals

• SAIA identified two major goals i.t.o. access
• To broaden access to the products of the
  short-term insurance sector
• Appropriate product
• 2. To educate consumers in LSM 1-5 market re
  financial services sector products
• SAIA FSC Consumer Education Initiative

7
Product Challenges

• Target market
• Product usage
• Current distribution and communication
• Premium payment facilities
• Physical access service delivery

8
Product - progress

• SAIA Access Group finalised position on access
• Approved by the SAIA Board
• Currently in product design phase after having
  talked with the target market
• Next steps will include getting buy-in from all
  relevant parties
• Launch date planned for 2005

9
Product (cont)

• Traditional non traditional distribution
  channels
• Measurement
• Effective policies sold and in force
• 1 point industry target
• 3 points individual targets

10
Product (cont)

• Only the personal lines insurance requirements
  will be addressed at this point. Any commercial
  or SME requirements may be addressed at a later
  stage

11
Product What will it look like

• A generic product will be developed in accordance
  with the guidelines for general use by the
  industry. This product will be branded in line
  with the Mzansi bank account.
• Generic product to cover basic risks
• Homeowners household contents combination, cell
  phone as starting point

12
Product What will it look like

• This will be a no frills policy to provide cover
  for the home, household goods and personal
  effects against specified perils i.e. Fire,
  Lightning, Explosion, Storm, Flood, Impact and
  Theft (sudden and unexpected events)

13
Product Language

• Although current research indicates that the
  client would accept English legal documentation,
  service and marketing could be in the clients
  language of choice.
• Policy documents are being designed in simple,
  plain English.

14
Product Premium Collection

• Existing traditional and non-traditional methods
• Irregular premium payment
• NB!!! Mzansi

15
SAIA FSC Consumer Education Initiative
Viviene Pearson
26th August 2005 PCOF
16
SAIA FSC Consumer Education Initiative Progress

• Strong commitment
• Recommended pooling of 0.2s
• R4 million i.t.o. 2004 profits (More about
  projects to follow)
• R7.4 million i.t.o 2005 profits (Projects already
  recommended to our committee)
• Synchronised effort FSB strategy
• Set own criteria i.t.o. Charter - to be followed
  strictly

17
SAIA FSC Consumer Education Initiative Progress

• Workshop
• Project plan for implementation
• Separate independent initiative
• Separate bank account
• Project Panel
• Collection of funds
• Selection of projects approval process
• Implementation of projects plus transfer of funds

18
SAIA FSC Consumer Education Initiative Progress

• Workshop
• Criteria
• Must have stated objective consistent with
  Charter
• Measuring effectiveness of projects is NB
• Must be aimed at black people
• Must be aimed at LSMs 1 5
• Must be focusing on financial knowledge generic
  programmes not insurance only!!!
• Must reach as many people as possible

19
SAIA FSC Consumer Education Initiative Progress

• Criteria continued
• Must be education not marketing!!!
• Must have timeline/timeframe
• Cost must be identified, monitored, adhered to
• Must identify appropriate target market
• Holistic approach to be sought synergies with
  other consumer education strategies (e.g. FSB
  maximise efforts)

20
SAIA FSC Consumer Education Initiative

• 2004 Projects meeting all these criteria
  objectives!!!
• Teacher training plus resource
• R1 000 000
• ( FSB contribution R500 000)
• Resource published, distributed
• Workshops are being rolled out in all provinces,
  subject to implementation of National Curriculum
  programme roll out

21
SAIA FSC Consumer Education Initiative (cont)

• Financial literacy workshops throughout
• SA, mainly rural areas R2 000 000
• (FSB 5 year project more funding needed!)
• Roll-out in all 9 provinces commenced staggered
• Church halls, shebeens, tribal courts, schools,
  community centres, etc
• Target 10 000 in this pilot year
• 2004 Projects meeting all these criteria
  objectives!!!

22
Financial literacy workshopsPMG note graphics
not included
23
Financial literacy workshops PMG note
graphics not included
24
SAIA FSC Consumer Education Initiative (cont)

• 2004 Projects meeting all these criteria
  objectives!!!
• Reaching commuters through
• Comutanet R800 000
• ( FSB contribution R400 000)
• Each day, 17.1 million economically active
• South Africans commute, via taxi ranks to and
  from their place of work.

25
Reaching SAs commuters

• Through
• Rank TV
• 2 Comutanet radio stations
• Casettes in taxis
• Live mobile and trailer promotions at ranks

26
Reaching SAs commuters

• Rank TV reaches
• 1,2 million
• commuters per
• day
• PMG note graphics not included

27
Comutanet interactive promotion in action!!!!
PMG note graphics not included
28
SAIA FSC Consumer Education Initiative

• 2 NB points
• Product talks with people from target market NB
• Privilege to see how this makes a difference in
  peoples lives

29
Benefits of SAIA approach

• Synchronised efforts and pooling of funds
  maximise reach and success
• Branding is out generic approach easy
• Makes basic education logical no clouding with
  regards to specific products
• FSB partnership provides further benefits
• Holistic approach existing strategy but able to
  select relevant projects to sector
• FSB resources
• Assist in FSB mandate from Minister of Finance re
  consumer education

30
SAIA FSC Consumer Education

• 2005
• Watch this space!!!