Are South Africans are reasonably well covered in case of illness / death
Service magazine sat down with the CEO of Sanlam Group Risk, Michele Jennings, to find out how South Africans and their employers can ensure that everyone is covered to their satisfaction.
In general, do you think South Africans are reasonably well covered in case of illness/death?
Although funeral cover has achieved remarkable market penetration in the South African market, the relatively low levels of life, disability and critical illness cover have resulted in an insurance gap which ASISA quantified at about R29 trillion at the end of 2015. This means that in the event of one of these life changing events, many South African families are left in a predicament where they cannot afford to continue with the same standard of living that they had before the event, with the ASISA study indicated that they are about 60% underinsured.
How can employers ensure that families of staff are well covered in the case of serious illness or death?
Given that only about 6% of South Africans retire with adequate retirement savings, Consultants and employers correctly focus on guiding members to achieve their retirement saving goals, with many actively making an effort to influence their member’s retirement outcomes. However, there appears to be less focus on helping members to achieve adequate levels of insurance, with affordability being a key dependency.
With only about 10% of South Africans having financial advisors, it would be helpful if employers could play a more active role in helping their members to determine their insurance needs through communication strategies, encouraging the use of personal financial advisors (possibly on site), and by providing access to needs based calculators. Given the employer affordability challenges, employers can also assist by offering flex options on their group insurance schemes, whereby members would be allowed individual member choice to increase their personal insurance cover at their own cost, which would be facilitated through the employer.
Sanlam is known to not have blanket offers for all, but rather have solutions for every client – how does Sanlam manage that, and how have clients or prospective clients responded to it?
Sanlam does offer standardized / off the shelf type products for those who want them. However, many large or complex clients are looking for bespoke solutions for their unique membership base. Sanlam is able to deliver bespoke solutions to these clients as a result of our highly experienced and skilled team members engaging with clients to determine their needs, and then formulating flexible solutions using various well established building blocks from within Sanlam to meet these needs.
In an era where many insurers and suppliers are digitising, standardising and automating their systems and product offerings to save costs, Sanlam’s personal touch, together with their willingness to offer flexibility has not only resulted in increased levels of client engagement, but has also translated into record levels of new business.
Have there been any new developments or products recently that you can share with us?
One of the key benefits of regular client engagement is that Sanlam is able to stay abreast of market developments and needs. An example of this is the Severe Illness Product which was launched towards the end of 2017 in response to the increasing need for affordable critical illness cover. Another example is the Accident Booster benefit, which is currently being launched as a free benefit to qualifying members, who as a result of not submitting medical evidence have their cover limited to the medical proof free limit.
Do you feel that as a nation we take things such as disability insurance, life insurance etc too lightly?
In addition to the tendency to be in denial about the possibility of death or disability impacting us personally, many South Africans tend to avoid or defer the purchasing of insurance largely due to affordability challenges. Furthermore, the extent and sometimes the complexity of options available to members, results in a fear of making the wrong choice, which is a challenge given that only 10% of South Africans make use of a financial advisor.
For more information on Sanlam Group Risk, please email us at: Michele.Jennings@sanlam.co.za
This article was extracted with the permission of Sanlam from Leadership Magazine