Lihle Z Mtshali
Buying short-term insurance is about as exciting as a trip to the dentist. You know you have to do it, but you are not really looking forward to it.
This is why this type of insurance continues to be a "grudge purchase". You need the insurance, but if you had a choice, you probably wouldn't buy it.
Mpumi Tyikwe, executive head for new and external markets at Santam, says: "You don't wake up every day thinking 'today I'm going to buy insurance'. You buy it because you have to."
Tyikwe and his team are on a mission to educate about 6million individuals in South Africa about the benefits of short-term insurance and to show them that "better regulation means they can protect their assets without being ripped off".
He says the main concern in the industry is that people have three or four life insurance policies, yet their homes, cars and other assets are not covered. "Short-term insurance is unheard of in the low-income segments of our population, but the problem begins when there is a devastating storm or fire that destroys people's homes and the contents thereof."
Santam is pouring R7million into consumer education and Tyikwe's division has formulated a low-cost short-term insurance policy with premiums as low as R35 a month.
The policy covers the structure of the house as well as the contents.
Selling the product to the previously untapped market has not been easy, says Tyikwe, as short-term insurance is practically unknown to that market. So the company has had to think up innovative ways of reaching their target market.
It has forged partnerships with the South African Democratic Teachers Union and the Zion Christian Church, providing their membership base with affordable insurance.
The 42-year-old Tyikwe, born and raised in Mdantsane in the Eastern Cape, is not new to the insurance game. He has been in the industry for 20 years and was managing director of Zimisele Underwriting Management Company, an empowered insurance company which he started in 1996.
The venture was a unique partnership between Hollard Insurance, Makana Investments and staff.