Mzansi type products are an investment in the future

- Herman Schoeman, MD of Guardrisk

The local insurance industry faces one of its first big challenges for the new millennium: getting Mzansi type insurance products into the market. With the assistance of the industry, SAIA has developed and priced a prototype Mzansi insurance policy (premiums starting at approximately R15 provide combined householders', house owners' and cell phone cover). The product is here, ready to be sold but no one is quite sure how to get it to the market; traditional distribution channels simply won?t work. But, there is a more pressing issue facing the industry: creating demand for the product.

Even in more sophisticated, established market sectors, insurance has always been perceived as a "grudge purchase" and now, some may say, Mzansi type products - prescribed by the Financial Sector Charter - are "grudge" sales. Not exactly a recipe for success!

But, while distribution of the product will no doubt present significant challenges - it will be difficult to find brokers willing to sell it and premium collection will be challenging - educating the market is the key, both in terms of the products' long-term success and the industry's total buy-in to the concept.

It is through education that the industry will receive significant long-term benefit from the introduction of Mzansi type products. Young persons from affluent sectors of society setting up home for the first time generally regard insurance as a necessity - they come from a culture where insurance is considered a necessity, albeit something of a "necessary evil". Mzansi type products will bring millions of young people into this culture of financial intelligence; creating a national mindset of taking responsibility for protecting one's assets. And that augurs well for the industry's future.

Establishing distribution channels will no doubt call for creative thinking. But, in the long run, aggressive, yet patient, marketing - supported by intensive education - will unlock this market.

If the industry is able to shift its paradigm on these products; to believe that any investment in Mzanzi policyholders today, is really an investment in their children, its clients of tomorrow, then these products will be a win-win for all concerned.

For further information please contact:
Herman Schoeman, MD of Guardrisk
Telephone: +27 11 669-1001

Issued by:
Melanie Davis, PR@Work
Telephone: +27 11 615-3309 / +27 83 225 7450