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What's Happening?

Expanding access to insurance should remain at the centre for insurers

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Customer preferences are driving a significant change to the way the insurance industry does business; today’s customers are looking for affordable and easy to access insurance solutions, supplied by trusted providers.

That means embracing a comprehensive distribution platform that meets the customers’ preferences, to enable customers to access insurance directly from the insurance company, via a broker, and even from their favourite retail store.

Edgar Evans, Head of Partnerships at Hollard Life Solutions says, “In our insurance offering design process, it has become important to take account of the specific customer base and their preferred channels of engagement. “Then to find the best ways to engage with consumers throughout their life journey and to deliver insurance offerings that meet their specific needs. Customers should seamlessly engage with insurance providers and products from start to finish, from anywhere, digitally or in person.”

Retailers have become an important part of the distribution value chain, facilitating broader access to financial services and insurance solutions for improved future planning. Within stores, consumers can conveniently access insurance offerings underwritten by trusted insurers, enhancing accessibility and reliability.

“Over the last decade, the accessibility and convenience of in-store services, coupled with the trust customers place in these establishments has led to a notable increase in the adoption of insurance offerings facilitated by retailers,” Evans says. “Retailers are extending financial services to previously underserved consumers.”

It hasn’t been easy. “Over the past two decades, Hollard has worked tirelessly to build a network of retail partners and to expand its distribution channels, giving insurance access to financially active consumers. Our partnership approach focuses on collaborating with like-minded partners and retailers who share our vision of expanding access to financial services,” Evans explains.

“We did a lot of research when we first launched with Edgars and Jet, and we observed that the typical consumer hesitated to visit an insurer’s office to purchase insurance, yet they were comfortable to add insurance options from trusted retailers to their monthly account payments.”

For example, someone who shops at Edgars is willing to pay an extra R44 a month for an insurance solution, because of the relationship with the retailer and easy access to the store.

Some partnerships took a decade to get off the ground, trust had to be built, the right insurance solutions were designed, and the correct processes were needed to deliver the insurance solutions seamlessly to the consumers.

Reaching a wide range of consumers

“Partnerships enable us to distribute insurance offerings through a multitude of channels, including as part of banking deals and vehicle sales, where insurance becomes an important component of the larger financial transaction,” Evans says.

Customers have responded positively to the different distribution channels showing that insurers need to meet consumers at their point of comfort to enable better access. In some cases, as many as 35% of customers have bought additional insurance offerings after acquiring a primary offering.

Face-to-face channels have surpassed the use of online platforms. This can be attributed to challenges like limited wi-fi access, expensive data costs, and a slower adoption of digital platforms.

“This has spurred the expansion of our partner distribution channels. Over 60% of our insurance sales are facilitated through face-to-face interactions, with a substantial portion of these occurring within partner distribution channels,” Evans says. “We focus on tailoring our offering to align with the items customers purchase. We try to provide relevant and personalised insurance products that meet their evolving needs.”

The power of partnerships to expand audience reach

Partnerships as distribution channels are a cornerstone in the journey to expand access to insurance products. These collaborations transcend traditional business models, forging connections between insurance providers and other entities, including retailers, financial institutions, motor vehicle dealers, healthcare providers as well as partnerships with other insurers. The primary goal is to provide access to insurance products to as wide a market as possible to contribute towards financial inclusion to help people to better absorb financial shocks.

“We have seen a substantial volume of policies sold through our partnership channels, reflecting the tangible impact of our partnerships on expanding access to insurance for the benefit of customers. Our approach to partnerships is far from a one-size-fits-all,” says Evans.

“We take a lot of trouble to assess the customers’ purchases within the different partner channels to offer them insurance solutions  that align with the specific item they are acquiring. If a customer is buying a car, for example, and taking out a loan, we provide credit life insurance to mitigate the risk of job loss or retrenchment to ensure that the customer keeps their vehicle, even when they don’t have an income.”

This ensures that the insurance cover is closely tied to the specific products the customer is acquiring.

Partnerships offer a gateway to tap into existing capabilities and processes to reach wider market segments, be it those purchasing vehicles or clothing, for example. For partners such as retailers, this allows them to leverage their established in-store processes, to expand their product offering, making insurance products more accessible to their customers.

“The benefits of such partnerships extend beyond competitive pricing, it has provided increased access to insurance for a broader demographic, including those in remote areas. The ubiquity of insurance offerings across various retail outlets, such as Ackermans or Edgars, has heightened awareness and made insurance more approachable to the average consumer” says Evans.

“As we look to the future, insurance is not only about expanding access but also about adapting to evolving customer needs. Strategic partnerships will continue to play a pivotal role in this transformative journey,” he concludes.