According to the Consultative Group to Assist the Poor (CGAP) about 2 billion working-age adults world-wide, do not have a bank account with a formal financial institution. Access to appropriate financial products assists people and businesses to have the ability to improve their lives through:
- Transacting, like sending and receiving money;
- Savings or investing money, through appropriate instruments;
- Borrowing money to finance projects like building a house or starting a business; and
- Insuring assets and lives against shocks, such as medical emergencies, death of a breadwinner or losses due to a natural disaster.
Within the South African context, 60% of the adult population was excluded from formal financial services pre-1994, according to a report by the Development Bank of Sothern Africa. Although access to financial services had improved to 77% by 2017, the FinScope Consumer Survey, still paints a bleak picture with regard to access to non-life insurance products, which has stagnated at 22% for several years now. This means that non-life insurance products are not reaching the majority of the population due to various challenge from the insurers, government and consumer perspectives.
Focusing on the section of our population that has assets to insure and can afford insurance but are currently still not accessing the non-life insurance products, consumer education can be utilized as an effective tool to improve consumer knowledge on financial risk exposure and appropriate risk mitigation strategies, which may include buying of non-life insurance products. Non-life insurance is still considered to be a grudge purchase and consumers have remained sceptical when interacting with the industry due to the misconception emanating from their limited knowledge about the industry’s product and service offerings, particularly during the claims stages.
The SAIA Consumer Education Fund Initiative, now in its 14th year, therefore seeks to change such misconceptions associated with how the non-life insurance industry operates and provide consumers with meaningful information to assist them in making better informed financial decisions, specifically in relation to financial risk management. Referred to as “best practice” by the Global Federation of Insurance Associations (GFIA), the SAIA Consumer Education Fund Initiative was established in line with the Financial Sector Code requirements, for industry players to contribute towards improving financial literacy levels and consumer knowledge of the financial sector and the products offered by the sector.
The SAIA Consumer Education projects are designed and delivered in such way that they can reach targeted beneficiaries who are faced with a variety of financial management needs, according to their life stage, which currently include high school learners, tertiary institutions students and working adults. During the 2016/17 project year the projects reached over a million people through television, industrial theatre and our digital platforms such as our consumer education website (www.knowyourinsurance.co.za) and other content delivery channels in order to meet the following objectives:
- Increase financial literacy in the South African public;
- Increase awareness of the non-life insurance products;
- Improve risk identification and mitigations skills;
- Improve confidence with which consumers interact with the industry.
SAIA members are active participants in this initiative through their financial contributions and provision of direction on what the project focus should be.
One of the requirements by the Financial Sector Code Consumer Education Standards, is that the 25% of the funds should target rural areas for between LSM’s 1 to 8 consumers and therefore requires that we should be able to deliver our projects in various local languages to expand our reach. The radio programme, which was launched in the 2018 aims to adhere to this requirement by delivering consumer education content through different regional/local radio stations, using their respective local languages.
The project was launched successfully, with positive feedback received by SAIA, however the long-term success of such a project is threatened by low participation from members in providing knowledgeable resources/people to be interviewed during the shows and provide the listeners with broad insights on the importance of financial risk management and the role that the non-life insurance can play in mitigating against such risks.
SAIA members are therefore encouraged to support this industry initiative by identifying and nominating employees to participate in the 2nd instalment of the Radio Project to be rolled out in 2019. Nominated employees will be provided with the necessary support to prepare for the interviews, which includes provision of vetted and approved interview content; and interview training can be arranged, if required. All questions from listeners that are not answered during interview are referred to the insurance technical expert within SAIA and feedback is provided to the consumer directly.
We are looking for people who can speak one of the South African vernacular languages fluently, regardless of where they are in the country as the radio stations we target are regional. The ideal person could be a team leader either in underwriting, policy administration, claims or complaints departments, or any other speciality that understands non-life insurance products and services.
To submit your nomination, please contact Zanele Gigaba, Transformation Manager or Lebogang Tsotetsi - Projects Administrator, on the following email addresses–email@example.com firstname.lastname@example.org.