A new player in the long-term insurance industry, Instant Life, says its online presence only business model means it can undercut its competitors.
Instant Life claims to be SA's first fully online life insurer, with no call centres and no middle men to deal with. This will cut out inefficient administration, and cut policy costs in half, it says.
CEO Jan Kotze says online is the new way of selling insurance, just as call centres were in vogue a decade ago, and brokers were the way to go a century ago.
“The new generation of insurers will shift the focus from the old model of push-selling by a commissioned intermediary, to life products that Internet-savvy and informed clients will want to buy.”
The company was launched online earlier this month and is partnered with Hannover Life, the world's second-largest reinsurer. Since its soft launch in August, the Web site has had 50 000 visitors, with 30% of these hits coming since the site's launch earlier this month.
Targeted market
Its target market is the educated Internet user between the age of 20 and 65, which accounts for about five million people in SA. “Most of our marketing will be on radio, Web-based or below the line, which means we don't have to run costly media advertising campaigns,” Kotze says.
“Our potential clients know they need life insurance, but they want it quickly, at the best price, from a credible company and are comfortable doing it online. We don't have to patronise them with media messages about the importance of life cover,” he adds.
Instant Life claims to make life insurance more affordable due to its lower cost structure, and offers insurance that is up to 50% cheaper than other insurance companies. The company says it is the first direct insurer to function without the expense of an interactive call centre, using an automated administrative system.
Next phase
“We think South African clients are mature enough for the next phase of the e-commerce curve - using the Internet to buy more sophisticated products that require online interaction,” says Kotze.
He believes the local life insurance market is not saturated, in spite of the high number of competitors. “Traditionally life insurance has been 'sold' not 'bought'. Products have been complex and the clients' needs not always clearly defined. We think Instant Life can change that.”
So far, the company has signed up 600 new clients, and is processing 7 000 applications. Kotze says he wants to have 3 000 people on its books in a year, and 10% of the industry within three years, which will mean signing up between 5 000 and 10 000 clients a month.
Instant Life offers up to R6 million life cover without a full medical, at about half the cost of its competitors. Its product range includes cover for whole life, critical illness, disability, accidental death, cancer and funeral.
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