Study tour of South African microinsurance sector (March 2009)

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Study tour of South African microinsurance sector (March 2009)

Brazil and Mexican delegation

Cenfri actively seeks to facilitate South-South dialogue based on the financial inclusion research that we are doing. This type of information sharing and collaboration is critical to support development amongst countries pioneering the way on financial sector development and financial inclusion.

During the week of 22 March 2009, Cenfri facilitated a study tour of the South African microinsurance industry for a delegation consisting of the Brazilian insurance regulator, participants from the Brazilian insurance industry and the Mexican insurance regulator. This study tour was initiated and funded by the World Bank.

The main objective of the study tour was to help the Brazilian and Mexican insurance regulatory authorities and insurance companies in Brazil understand the key issues in the South African microinsurance market and the regulation thereof. The study tour covered a variety of topics relevant to a developing microinsurance industry and the economic and financial sector context in which it operates. This included the South African regulatory framework, consumer protection, the Financial Sector Charter, innovative distribution channels and products. The delegation visited leading microinsurance providers, the insurance associations, financial intermediaries, and the insurance regulator (National Treasury) and supervisor (the Financial Services Board).

During the week, the delegation met with leading microinsurance providers, the insurance associations (South African Insurance Association and Association for Savings and Investments South Africa), financial intermediaries, the insurance regulator (National Treasury), insurance supervisor (the Financial Services Board) and health insurance supervisor (Council for Medical Schemes). In addition these meetings the delegation also had the opportunity to meet microinsurance customers face-to-face in the Khayelitsha township and to visit some of the shop floors to see distribution in action.

Many similarities of issues were found. A key theme that emerged from many of the meeting and discussions was the similarity of issues in the microinsurance environments in South Africa, Brazil and Mexico. These include, for example, the issue of funeral parlours providing insurance on an unregulated basis with the challenge of transforming these informal players to legal entities, the popularity of funeral insurance, low consumer financial literacy levels and the challenges of distribution innovation. Because of these similarities, the trip led to a useful discussion of interest to both countries and the dialogue is likely to continue.

Stimulating innovation. Another key theme was the high level of innovation in the South African microinsurance industry. Cenfri was able to arrange meetings with companies going about product design and distribution in very innovative ways.

Throughout the week Cenfri was also able to contextualize many of the issues emerging in meetings in discussion with participants after these meetings. This allowed participants to reflect in a critical manner on the information conveyed.

Presentations made by various organisations during the study tour week can be found below:

Presentations by the South African Government

National Treasury: Financial Inclusion Framework (PDF: 175.12KB) MI Discussion Paper (PDF: 641.41KB)

Financial Services Board:

Insurance Sector Overview (PDF: 135.98KB) (Jonathan Dixon, FSB)

Market conduct regulation (PDF: 1.24MB) (Gerry Anderson, FSB)

Council for Medical Schemes: Overview of South African Health Financing (PDF: 1.56MB) (Financing Technical Task Team, CMS)

Presentations by industry:

Hollard: Study Tour Presentation (PDF: 1.72MB) (Ross Coetzer Crafford,Hollard)

Cover2go:Cell-ing insurance (PDF: 1.62MB) (Derek Pead, Cover2go)

FAB: Forum for Assistance Business (PDF: 5.81MB)

ASISA: Organization (PDF: 352.86KB) Zimele & Credit Insurance (PDF: 720.03KB)