Insurance innovations are consumer-driven
Providers of long-term and short-term insurance products are becoming increasingly consumer-led in their approach to product design. The “take-it-or-leave-it” approach of the past has, largely through healthy competition and technological progress, given way to a closer alignment with consumers’ needs and more flexibility in accommodating individuals’ unique circumstances.
Recently, several insurers have introduced innovations or enhancements to their products that reflect this shift in mindset.
At a roadshow last week to its adviser network, the head of retail life insurance at Momentum, Stephen van Niekerk, introduced several enhancements to the insurer’s Myriad range.
* Life-stage premium pattern. Van Niekerk said that when taking out life cover, consumers have to weigh up initial affordability versus long-term sustainability. He said 75% of clients choose an escalating-premium pattern as opposed to the sustainable, but initially expensive, level-premium pattern. While the escalating pattern offers a low, affordable premium to begin with, after 10 years or more, the premiums may have risen to the extent that they are unaffordable. Momentum has developed a life-stage premium pattern which keeps the affordability at inception, then institutes higher increases between the ages of 55 and 65, when clients tend to have greater discretionary income, in return for lower increases after 65, when affordability is likely to be an issue.
* Death income benefit. This provides a guaranteed income to the dependants of a deceased policyholder for six, 12 or 24 months immediately after the policyholder’s death. It is designed to provide income that is independent of other life cover or investments to sustain the dependants financially while the deceased estate is finalised.
* Complete Income Protector. This is designed to provide both temporary and permanent disability benefits in a single product and introduces the option to convert part of the income protection benefit to a lump-sum payout at the time of claiming. (This can occur even after claiming, when the beneficiaries are already receiving the benefit). There is also a “whole-life” option whereby, at age 70, the type of cover changes to functional impairment cover and the benefit is reduced by 50%. (Most disability insurance terminates when you retire.)
FNB Life funeral cover
FNB Life is waiving the waiting period on its funeral policies if you switch from another insurer and have already completed a waiting period. The waiting period is the period during which, after taking out a policy, you may not submit a claim. Lee Bromfield, the chief executive of FNB Life, says that by instituting this measure, it means there is no break in cover.
Bromfield says that when all funeral insurance providers are relicensed under the new Insurance Act, the waiving of already-served waiting periods will be standard. Waiting periods and policy reinstatement rules are now regulated: the waiting period for natural death is now six months at most, unlike the 13 months set by some insurers. And once you have provided all the required documents for a funeral claim, insurers will have to provide an outcome within 48 hours. This is to protect you from unnecessary delays in claim payments.
Naked cover for
Naked, the artificial intelligence-driven short-term insurance platform, now lets you insure individual items as and when you need to. It covers your valuable possessions, such as smartphones, bicycles and laptops, for theft, accidental damage and loss in South Africa and for up to six months of consecutive travel anywhere in the world. You can obtain a quote on the Naked app in seconds and can add or remove items and adjust excess values to see how your premiums will be affected. After signing up, you simply need to take and load a few pictures together with a short description of the item to complete the transaction.
The product is particularly well suited for those who want to insure a few valuable items, but don’t want or need full household contents insurance. Unlike contents insurance, it covers the items even when in transit, used for business or used outside the home.
Genric smart cover
SafeHomes, a new homeowner’s insurance product from Genric, is embracing the internet of things (IoT) to connect home devices to its offering and, in turn, provide significant savings through improved risk mitigation.
“Essentially, by linking the IoT to insurance, we’re empowering (consumers) to take greater control of their risk mitigation measures, which has a material impact of the cost of their insurance,” says Cornel Schoeman, chief operating officer of Genric. Features include:
* A Geasy geyser management device that allows you to optimally schedule and remotely switch your geyser on and off via a web app. This can save up to 30% of an average household electricity bill.
* A Geasy drip-tray sensor that helps reduce the risk of geyser
bursts. Ageing geysers tend to leak more. With early-warning notification, the problem can be addressed early and the damage that typically follows a major burst can be avoided.
* SafeHomes water metering provides detection of excessive water usage, which may indicate pipe bursts, underground leaks, or taps left running.
* The SafeHomes app also comes with an emergency panic button, which will automatically dial up the closest contracted security provider when activated.