/ 20 March 2006

Santam launches low-cost home insurance

Listed short-term insurer Santam has launched South Africa’s first affordable household insurance product aimed at the lower-income sector, the company announced on Monday.

The new product, called Santam MultiHome, is initially being launched to homeowners in Soweto and will provide the company access to a growing new consumer base.

Mpumi Tyikwe, Santam’s executive head for corporate and specialist distribution, said this is the first insurance industry offering in line with the banking sector’s entry-level “Mzansi-style” low-cost products, while being compliant with products currently being developed by the South African Insurance Association.

According to Tyikwe, MultiHome will feature premiums as low as R15 per month, being targeted at South Africans living in the lower-income market segment. Many of these South Africans are largely uninformed about short-term insurance or were unable to obtain conventional household cover in the past, he pointed out.

Tyikwe said preliminary research into this lower-income market found the primary reasons for not having insurance were affordability and lack of awareness. The product has been developed in the wake of the Financial Sector Charter recommendations that the insurance industry improve access to the lower end of the market, where there is less than 1% penetration.

“MultiHome covers homes and their contents comprehensively and includes cover for all natural disasters, fire and theft. It also covers damage caused during riots and strikes. Premiums range from R15 to R240 per month, depending on the value of homeowners’ property and possessions. Personal liability cover up to R100 000 is included free of charge with all policies.”

In line with its commitment to improve access to insurance to the lower end of the market, Santam has also joined forces with Thebe Risk Services to provide a low-cost housing insurance product for employees at various institutions with whom Thebe has a relationship, Tyikwe added.

Initially available to consumers in Soweto, Santam plans to extend its offer to the greater Gauteng province in the next two to three months before it is later rolled out systematically to the rest of the country. — I-Net Bridge