Market Snapshot: South Africa is Ripe For Change Via PAYG Insurance Apps

In this series of features, Insurance Edge will be looking at different countries and trying to find out what the big trends are in local terms, the major companies active and the popular types of insurance products that consumers are buying. First in the series is South Africa, so let’s look at the rainbow nation in detail;


The first thing to note is that SA is the biggest insurance market on the African continent, by a long way. Secondly, in some ways it is already a mature market, dominated by big players, so it isn’t easy for new companies to enter SA and win business. Here’s one fact worth knowing; about 80% of all the insurance business written in SA is Life cover of one sort or another, so it is a very traditional market in that regard and new products like health insurance, gadget cover, pet insurance and so on may well take decades to reach maturity in terms of general take-up.

A great many South Africans earn low wages and obviously this restricts their ability to take out insurance, even if they would like to. There have been some general economic challenges in the last decade or so that have slowed growth in certain sectors. That said, PWC estimate that Gross Written Premiums in 2017 stood at $19.3 billion, so there are opportunities in SA without doubt.

Big companies in the SA insurance market include Santam, who claim to have 22% of the total market share, plus the privately owned Hollard Group – which was founded in SA back in the 1980s – and OUTsurance Holdings, a subsidiary of Rand Merchant Holdings. In addition, Zurich, Standard, AIG and Barclays all have a stake in SA.

Local banking brand Capitec Bank also launched what it claims is the `most affordable’ funeral plan insurance in SA last year. Premiums start at just R25 per month, with inception via smartphone app.

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An Insurance Act in 2017 – which came into force in July 2018 – made insurers compliant to Solvency II levels in terms of funding, plus the Act introduced a raft of modern money-laundering, know-your-customer and data handling rules. There was also some delineation within the Act, which effectively attempted to separate micro-insurers from bigger players.

Caps of R100K on Life insurance policy values and R300K on all other policy pay-outs were also introduced as part of the Act.


The biggest sector is Life insurance and everyone involved in SA agrees that the majority of policyholders are under-insured with pay-outs in the R500K-R1 million bracket. This just isn’t enough to look after your family when you are gone, so those companies with innovative ideas could re-define Life insurance in SA, with the right marketing approach.

Perhaps the greatest potential for overseas insurers lies in micro-insurance products, backed by tech located in the Cloud. Although the potential marketing/admin costs compared to every Rand in premiums is high in the short term, the deployment of new automated technologies, will definitely make it easier for SA consumers to take out micro-payments, PAYG insurance, in a variety of formats.

Insurance Edge thinks that the potential for long term growth is huge, but how can micro-insurance products be sold effectively to the money-conscious consumer? Here are some examples;

MobiLife for example offer local-orientated products such as Food Assurance, which lets people essentially leave regular food supplies to their family should they die. More at;

MobiLife also have Life insurance which is NOT cancelled if you skip some payments. In an economy where work cannot be guaranteed all year round, such bespoke tailoring of insurance products, coupled with more sophisticated data analytics tracking lifestyles and locations via smartphones, will let insurers offer the right solutions for consumers.

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Naked is one new player looking to offer products like app-based motor/accident insurance, which can be switched off if the vehicle isn’t being used for a day or two. The USP from new start-up Naked is that any money left over from the premium payout pool at the end of the year can be donated to charity, with the Naked customers choosing the charities.

Interesting angle we say, much like Dead Happy in the UK Life market, it taps into the modern liberal ethos of being a good person and leaving a legacy. You can watch the Naked promo video here

Liberty is another company offering short term car insurance, and in partnership with Standard Bank, Liberty has established a Short Term Centre of Excellence, so that new tech can married to the business of PAYG insurance in SA. The key plank of Liberty’s offering is the use of chatbots to incept, and amend, policies as the policyholder’s lifestyle changes.

No more call centre queues, no paper forms to fill in. Liberty are also looking at offering SA drivers a kind of smartphone telematics based insurance, which will let an app assess how good a driver you are in terms of braking, speed, hard cornering etc – that in turn, could save you money.



About alastair walker 12505 Articles
20 years experience as a journalist and magazine editor. I'm your contact for press releases, events, news and commercial opportunities at Insurance-Edge.Net


  1. It feels like there’s a huge range of overlapping banking services and technologies with adoption rates that speak to a coming reckoning of the right package of resources. It feels like there’s an arms race to earn the loyalty of a new generation of banking consumers.

    • The old days of signing up bank customers for life are definitely over! Same story with insurance too; price vs loyalty is something we are all comparing online every day 👍

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