Start-ups and big insurers compete for market share
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The insurance industry has become a hive of innovation, with technology-enabled start-ups beginning seriously to compete with the established players, which themselves are investing heavily in the fintech (financial technology) space.
This translates into good and bad news for consumers. The good news is that new products are generally more flexible and user-friendly, and the increased competition will bring down costs. The bad news is that the plethora of companies and products coming onto the market may leave you baffled for choice.
Recent weeks have seen a number of developments in the local market:
In 2016, a group of South Africans from different backgrounds embarked on a journey to rethink insurance. Last week, they launched Pineapple – a fresh take on short-term insurance – and this week the company paid out its first claim.
What makes Pineapple different is that premiums are deposited into members’ individual Pineapple wallets. When a claim occurs, all wallets contribute in a small way to pay the claim. Members can withdraw all unused deposits each year, in cash. A small portion of the wallet deposit is for reinsurance, so that valid claims are always paid, even if wallets run out.
Co-founder Matthew Elan Smith says: “Pineapple provides comprehensive insurance cover and the ability for members to keep all of their premiums not used for paying claims, as well as track in real-time exactly how their premiums get used on a cent-by-cent basis.”
Members take control of how their wallets are used by connecting, in a social-media-like fashion, to other Pineapple members they trust. This helps to protect against fraud.
Currently, Pineapple offers cover on individual items, such as laptops, cellphones, sporting equipment, cameras, couches, TVs, drones and bicycles. Motor vehicle cover will soon be part of the offering.
Pineapple’s first claim was submitted at 10.17am on August 10. The claim was paid to the client about an hour-and-a-half later, at 11.45am. It was processed by Nelson (Pineapple’s “bot”), which broke up the claim and debited small amounts from all members’ wallets.
Frankfurt-listed MyBucks SA has launched a fintech insurance platform in South Africa called SureCloud, and has introduced two products – legal assistance and funeral cover – under the GetSure SA brand.
The SureCloud online platform allows policy take-up, amendment of existing policies and logging of claims without any intervention by agents. “The customer is 100% in control and can manage his insurance portfolio at any time that is convenient,” says Dave van Niekerk, the executive chairperson of MyBucks.
“There is a simple quote functionality, whereby the client can select the sum to be insured and members to be covered. The client can easily change his or her selections and proceed once happy with the quote. Once the minimum information required has been captured, the policy is concluded, and full policy contract documents are emailed to the customer.”
Metropolitan funeral product
Established financial services company Metropolitan has unveiled its new Funeral Solution, which has personalisation at its core – giving policyholders the flexibility to customise their funeral cover based on their needs and pocket.
“Our Funeral Solution offers policyholders value for money while ensuring that all the aspects most important to them are covered,” says Llewellyn Allen, the divisional chief marketing officer at Metropolitan.
“We have differentiated our solution from what is currently available on the market in a number of other ways, too.”
Through its life event enablement service, Metropolitan can assist with sourcing suppliers and/or items for the funeral, such as the coffin, flowers and tombstone, in line with the customer’s wishes. Alternatively, the money can be paid into a bank account for a beneficiary to make the necessary arrangements.
“Perhaps the most distinguishing feature of the new product is that consumers now have the flexibility to change their cover as and when their lives change,” Allen says.
Simply teams up with SweepSouth
Insurance start-up Simply has partnered with SweepSouth, which offers cleaning services to households, to provide accidental death and disability cover free of charge to SweepSouth’s SweepStars – its force of domestic cleaners.
The partnership deepens Simply’s commitment to provide cover to people in lower-income groups, who are under-served. For SweepSouth, it builds loyalty and commitment among the more than 7 000 SweepStars it has on its books.
Simply’s Domestic Cover product is aimed at employers of domestic workers and provides low-cost life, disability and family funeral cover for workers through a convenient online process.