Emerging market insurance provider Safrican Insurance Company, wholly owned by Thebe Investment Corporation company, and South African government-owned Postbank said on Tuesday they had joined forces to provide affordable insurance cover to the local “unbanked” economic sector.
Officially launching the multi-package plan marketed under the brand name Thuso, meaning “help”, Safrican Strategic Relationship Executive Ben Anamallay said the new product would “finally offer meaningful insurance assistance to a vast area of the South African market.”
Initially four options specifically structured to offer a range of insurance would be available, he said, with a fifth, a funeral plan, added in mid- November. The specifically structured Thuso Plans could, the partners believed, evolve into a total financial services solution for the emerging market.
While the four-planThuso package was designed and assembled by Safrican, it would be marketed and promoted through the Postbank for quick and widespread penetration of the market, estimated by Safrican Insurance Company at around 20-million potential lives. Premium collections would be made through the post office either in cash or, from the beginning of 2004, through the customer’s Postbank savings account.
“It’s a strong partnership,” observed Daphne Motsepe, Postbank’s managing director. “The Postbank’s vital ingredients in the product mix are accessibility and credibility, while Safrican is providing relevance in terms of the market’s current and future needs along with insurance products that are affordable.”
The Thuso brand had been a year in the making and began with a meeting of minds.
“We got together with the Postbank,” reported Petros Mbewu, CEO of Safrican Insurance Company, “and appraised the size and economic profile of their customers and then explored the kind of insurance that would be relevant, helpful and affordable in that market. Our attention will be directed at the huge, virtually untapped market.”
Mbewu said research had shown that the market needed a reliable, credible and affordable insurance product, otherwise people continued to fall victim to unscrupulous insurance providers and unsustainable informal self-insurance schemes. He pointed out that the majority of South Africans were not able to access financial services products outside of formal employment arrangements, under which the big players were able to attract sufficient numbers to recover their costs and make profit.
“We believe the market is viable if it is managed in the right way,” he commented.
“And that can be achieved with a powerful partner such as Postbank that is already in touch with the people through its extensive network of Post Offices and well-trained staff. Our approach is simple: We’re saying: ‘Come to us, we’ll help’.”
The Thuso insurance packages were already in the market, having been rolled out nationally in June with take-up to date well ahead of budget.
“Our experience thus far and the product take-up rate have convinced us that we have given the market what it wants,” said Anamallay. “We have beaten our forecasts in terms of sales.”
For the Postbank, the tie-in with Safrican happened at a time when the Post Office was responding to the new role placed upon it by the Postal Services Act of 1998. In particular this called for the Post Office to provide universal access to postal services, including the financial services aspects.
“The Postbank has positioned itself as a critical player in the financial sector by providing banking services to the poorest of the poor,” Motsepe pointed out. “The extensive network of more than 2 000 postal outlets will undoubtedly consolidate the bank’s domination of the local financial market, especially in the rural areas.
“New products, such as Thuso insurance and funeral schemes, will increase the relevance of Postbank in the under-serviced communities.”
Safrican was founded in 1932 as the Sophia Town Burial Society, merged with the Thebe Investment Company in 1996 and has since become a wholly-owned subsidiary in the Thebe portfolio. – I-Net Bridge