Per­sonal insurance gets a re­vamp

Tra­di­tion­ally, sign­ing up for and claim­ing from insurance is about as plea­sur­able as go­ing to the den­tist. But San­lam is hop­ing to change that with its app that al­lows for cover on de­mand.

Finweek English Edition - - THE WEEK - By Glen­neis Kriel edi­to­rial@fin­week.co.za

southAfrican per­sonal insurance pen­e­tra­tion has been rel­a­tively stag­nant at around 11% to 14% over the past few years. Firstly, be­cause the mar­ket is ma­ture and dom­i­nated by con­tenders sup­ply­ing rel­a­tively sim­i­lar prod­ucts, and sec­ondly, be­cause con­sumer ex­pen­di­ture is un­der pres­sure due to slow eco­nomic growth and high lev­els of un­em­ploy­ment.

San­lam has how­ever de­vel­oped an app, called Go Cover, which might just have what it takes to breathe new life back into this mar­ket. Jack Kruger, de­sign lead at the San­lam Group, says the app was built on ob­ser­va­tions of how the dig­i­tal era was trans­form­ing busi­ness: “We iden­ti­fied the un­bundling of ser­vices, a move to­wards mi­cro-ser­vices and ser­vices be­ing avail­able on de­mand as ma­jor trends be­hind con­tem­po­rary dig­i­tal busi­ness mod­els, such as Airbnb, Uber and What­sApp.”

By ap­ply­ing this to insurance, the com­pany de­vel­oped an insurance cover app, al­low­ing users to buy ac­ci­den­tal in­jury cover, on de­mand, from 24 hours to an ex­tended 30-day pe­riod, via smart tech­nol­ogy. The cover can be ac­ti­vated im­me­di­ately or at a pre­cise fu­ture date and time within 30 days. For ex­am­ple, one can buy 14 days of cover and set it to au­to­mat­i­cally be­gin next Tues­day at 09.30AM.

“All you have to do, is down­load the Go Cover app from ei­ther the Google Play Store or the Ap­ple App Store, sign in, and en­ter your de­tails once – which should take less than five min­utes. From there, sub­se­quent cover can be bought and ac­ti­vated in a mat­ter of sec­onds,” Kruger says. “With client per­mis­sion, we do make lim­ited use of the de­vice’s lo­ca­tion to en­able cover and also to en­rich the user ex­pe­ri­ence. We use geo-fenc­ing to send ap­pro­pri­ate no­ti­fi­ca­tions and in­for­ma­tion.”

In­stead of com­pli­cat­ing things, it was de­cided to only of­fer three lev­els of cover. For 24-hour cover, a pre­mium of R10 gives cover of up to R100 000, R20 for up to R500 000 or R30 for up to R1m. The daily rate de­creases as the pe­riod ex­tends.

Keep­ing the insurance ac­ces­si­ble and af­ford­able also turned into one of their big­gest chal­lenges in mak­ing the cover work, as col­lec­tion costs can amount to a sub­stan­tial pro­por­tion of the pre­mium. “We are look­ing at ways to re­duce these costs through part­ner­ships,” Kruger says.

Claim­ing is rel­a­tively has­sle-free and can be com­pleted on­line. Claimants have to sub­mit an iden­tity doc­u­ment, hos­pi­tal and doc­tor in­for­ma­tion, and proof of a bank ac­count. A po­lice re­port might be nec­es­sary if the in­jury is crimere­lated or in­volved a ve­hi­cle ac­ci­dent, while a death cer­tifi­cate is re­quired in the case of ac­ci­den­tal death. De­sign lead at the San­lam Group Cover is not ex­tended to peo­ple in­volved in crim­i­nal ac­tiv­i­ties or self-harm.

The mar­ket

Where insurance is tra­di­tion­ally risk-ad­verse, pe­nal­is­ing peo­ple who take part in a range of out­door ac­tiv­i­ties, Go Cover is rev­o­lu­tion­ary as it openly ac­com­mo­dates peo­ple who will en­counter an ac­tiv­ity that may be per­ceived as ad­ven­tur­ous or risky. As such, it is ideal for week­end war­riors who par­tic­i­pate in moun­tain bik­ing, paraglid­ing or trail run­ning, or even pro­fes­sional sports­peo­ple.

Go Cover is fur­ther suited to peo­ple who re­quire a de­gree of work­place pro­tec­tion – ei­ther for them­selves or their em­ploy­ees. “A busi­ness owner might pay to cover her en­gi­neers pe­ri­od­i­cally de­ployed on a sky­scraper, or a farmer to cover sea­sonal work­ers, in­stead of longer-term prod­ucts. One of our clients, for ex­am­ple, is a he­li­copter pi­lot and uses it when he does crop spray­ing,” Kruger ex­plains.

It could also be used as a form of travel insurance. “Peo­ple might use it when they are on the road, es­pe­cially dur­ing the Easter or Christ­mas hol­i­days when there is an in­crease in road ac­ci­dents,” Kruger says. “South Africans can ac­ti­vate and use the cover over­seas, but for­eign­ers, so far, may only use it when they are in South Africa. Go Cover is open to ev­ery­one and does not have an age limit.”

Fu­ture plans

The first Go Cover app only caters for in­di­vid­u­als, but the com­pany is in the process of di­ver­si­fy­ing the prod­uct to also cater for fam­i­lies or groups, in a sin­gle pur­chase. The ap­pli­ca­tion is also be­ing un­bun­dled fur­ther to pro­vide cover for spe­cific sports and out­door ac­tiv­i­ties. “The risks in­volved in var­i­ous sports are dif­fer­ent. There’s less ben­e­fit in of­fer­ing a moun­tain biker cover against ac­ci­den­tal drown­ing,” Kruger ex­plains. Go Cover is not in­tended to re­place com­pre­hen­sive med­i­cal aid or life cover. “Go Cover is in­tended to be a fric­tion­less, in­stant ad­don to what users may al­ready have and will pay out on top of any other insurance,” Kruger says.

“The taxi in­dus­try in San Fran­cisco, for ex­am­ple, seemed to be stag­nant and ma­ture with a rev­enue of about $150m per year. Uber, even so, man­aged to break into this mar­ket and grow its rev­enues to $500m per year in only three years. By un­bundling insurance and mak­ing it avail­able on de­mand, we are hop­ing to sim­i­larly grow the lo­cal insurance in­dus­try.”

“Go Cover is in­tended to be a fric­tion­less, in­stant add-on to what users may al­ready have and will pay out on top of any other insurance.”

Jack Kruger

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