SOUTH AFRICAN INSURANCE ASSOCIATIONSOUTH AFRICAN INSURANCE ASSOCIATIONSOUTH AFRICAN INSURANCE ASSOCIATIONSOUTH AFRICAN INSURANCE ASSOCIATION

.

Access to financial Access to financial servicesservices

presented bypresented by

Leila MoondaLeila Moonda

26th 26th August August 20052005

PCOFPCOF

Transforming the Transforming the short-term insurance short-term insurance

industryindustry

• HistoryHistory• GoalsGoals• ChallengesChallenges• ProgressProgress

HistoryHistory

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

History cont.History cont.

Effective access to short-term risk Effective access to short-term risk insurance products and services insurance products and services meansmeans

• appropriate and affordably pricedappropriate and affordably priced• made available through made available through

appropriate and accessible appropriate and accessible infrastructureinfrastructure

• to 6% of black persons in the LSM to 6% of black persons in the LSM (Living Standard Measures) 1-5 (Living Standard Measures) 1-5 grouping by 2008grouping by 2008

GoalsGoals

SAIA identified two major goals SAIA identified two major goals i.t.o. access:i.t.o. access:

1.1. To broaden access to the products of the To broaden access to the products of the short-term insurance sector short-term insurance sector

= Appropriate product= Appropriate product

2.2. To educate consumers in LSM 1-5 market To educate consumers in LSM 1-5 market re financial services sector products re financial services sector products

= SAIA FSC Consumer Education = SAIA FSC Consumer Education InitiativeInitiative

Product: ChallengesProduct: Challenges

• Target marketTarget market• Product usageProduct usage• Current distribution and Current distribution and

communicationcommunication• Premium payment facilitiesPremium payment facilities• Physical access & service Physical access & service

deliverydelivery

Product - progressProduct - progress

• SAIA Access Group finalised SAIA Access Group finalised position on accessposition on access

• Approved by the SAIA BoardApproved by the SAIA Board• Currently in product design phase Currently in product design phase

after having talked with the after having talked with the target markettarget market

• Next steps will include getting Next steps will include getting buy-in from all relevant partiesbuy-in from all relevant parties

• Launch date planned for 2005Launch date planned for 2005

Product (cont)Product (cont)

• Traditional & non traditional Traditional & non traditional distribution channelsdistribution channels

• MeasurementMeasurement– Effective = policies sold and in

force– 1 point: industry target– 3 points: individual targets

Product (cont)Product (cont)

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

Product: What will it Product: What will it look likelook like

• A generic product will be developed A generic product will be developed in accordance with the guidelines in accordance with the guidelines for general use by the industry. This for general use by the industry. This product will be branded in line with product will be branded in line with the Mzansi bank account. the Mzansi bank account.

• Generic product to cover basic Generic product to cover basic risks:risks:– Homeowners & household contents

combination, cell phone as starting point

Product: What will it Product: What will it look likelook like

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

Product: LanguageProduct: Language

• Although current research Although current research indicates that the client would indicates that the client would accept English legal accept English legal documentation, service and documentation, service and marketing could be in the marketing could be in the client’s language of choice.client’s language of choice.

• Policy documents are being Policy documents are being designed in simple, plain designed in simple, plain English.English.

Product: Premium Product: Premium CollectionCollection

– Existing traditional and non-traditional methods

– Irregular premium payment– NB!!! Mzansi

SAIA FSC Consumer SAIA FSC Consumer Education InitiativeEducation Initiative

Viviene PearsonViviene Pearson

2626thth August August 20052005

PCOFPCOF

SAIA FSC Consumer SAIA FSC Consumer Education Initiative – Education Initiative –

ProgressProgress• Strong commitmentStrong commitment• Recommended pooling of 0.2%’sRecommended pooling of 0.2%’s• R4 million i.t.o. 2004 profits R4 million i.t.o. 2004 profits

(More about projects to follow)(More about projects to follow)• R7.4 million i.t.o 2005 profits R7.4 million i.t.o 2005 profits

(Projects already recommended (Projects already recommended to our committee)to our committee)

• Synchronised effort – FSB Synchronised effort – FSB strategystrategy

• Set own criteria i.t.o. Charter - to Set own criteria i.t.o. Charter - to be followed strictlybe followed strictly

SAIA FSC Consumer SAIA FSC Consumer Education Initiative – Education Initiative –

ProgressProgressWorkshop:Workshop:

1. 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

SAIA FSC Consumer SAIA FSC Consumer Education Initiative – Education Initiative –

ProgressProgressWorkshop:Workshop:

2. 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

SAIA FSC Consumer SAIA FSC Consumer Education Initiative – Education Initiative –

ProgressProgress2. 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)

SAIA FSC Consumer SAIA FSC Consumer Education InitiativeEducation Initiative

2004 Projects – meeting all these 2004 Projects – meeting all these criteria & objectives!!!criteria & objectives!!!

Teacher training plus resource Teacher training plus resource = R1 000 000 = R1 000 000 (+ FSB contribution = R500 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

SAIA FSC Consumer SAIA FSC Consumer Education Initiative (cont)Education Initiative (cont)

Financial literacy workshops Financial literacy workshops throughoutthroughout

SA, mainly rural areas = R2 000 000 SA, mainly rural areas = R2 000 000 (FSB 5 year project – more funding (FSB 5 year project – more funding

needed!)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 & 2004 Projects – meeting all these criteria & objectives!!!objectives!!!

Financial literacy Financial literacy workshopsworkshops

[PMG note: graphics not included][PMG note: graphics not included]

Financial literacy workshopsFinancial literacy workshops

[PMG note: graphics not included][PMG note: graphics not included]

SAIA FSC Consumer SAIA FSC Consumer Education Initiative Education Initiative

(cont)(cont)2004 Projects – meeting all these criteria & 2004 Projects – meeting all these criteria &

objectives!!!objectives!!!

Reaching commuters through Reaching commuters through Comutanet = R800 000 Comutanet = R800 000 (+ FSB contribution – R400 000)(+ FSB contribution – R400 000)

Each day, 17.1 million economically activeEach day, 17.1 million economically activeSouth Africans commute, via taxi ranks to South Africans commute, via taxi ranks to

and from their place of work.and from their place of work.

Reaching SA’s Reaching SA’s commuterscommuters

Through

•Rank TV•2 Comutanet radio stations•Casettes in taxis•Live mobile and trailer

promotions at ranks

Reaching SA’s Reaching SA’s commuterscommuters

Rank TV reaches Rank TV reaches

1,2 million 1,2 million

commuters per commuters per

dayday

[PMG note: graphics not [PMG note: graphics not included]included]

Comutanet interactive Comutanet interactive promotion in action!!!!promotion in action!!!!

[PMG note: graphics not included][PMG note: graphics not included]

SAIA FSC Consumer SAIA FSC Consumer Education InitiativeEducation Initiative

2 NB points:2 NB points:

• Product talks with people Product talks with people from target market = NBfrom target market = NB

• Privilege to see how this Privilege to see how this makes a difference in makes a difference in people’s livespeople’s lives

Benefits of SAIA Benefits of SAIA approachapproach

– 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

SAIA FSC Consumer SAIA FSC Consumer EducationEducation

20052005

Watch this space!!!Watch this space!!!