Most insurance distribution models scale the traditional way; more customers mean more staff – more brokers, more back-office support staff and a larger claims team. SureStart, an authorised financial services provider (FSP 47233), an independent digital insurance broker and embedded insurance expert, has taken a different route.
With a team of eight – only six of whom run day-to-day operations – SureStart has provided cover to more than 300 000 unique beneficiaries across South Africa, paying out thousands of claims worth several million rands in the process.
"The question we get asked most often is ‘how does a team this size cover and support so many people?'” says Matthew Farquhar, CFP, Executive Director at SureStart. “The honest answer is we made a few mistakes that made us truly understand the cost per acquisition (CPA) < lifetime value (LTV) equation. Once we understood how to optimise our business model to reduce our CPA, it was about ingraining three key beliefs into our company culture to support it.”
- SureStart scales with technology, not with seats.
- SureStart treats customers excellently, not just fairly.
- SureStart advances financial inclusion with digital distribution, covering previously excluded groups.
Scaling with technology, not with seats – prioritising embedded insurance
Traditional insurance distribution has a problem – it’s expensive to acquire the customer. Once you factor in the marketing, petrol, entertainment expenses, systems, etc, you need a substantial premium for a traditional agent to warrant the cost of writing the policy. The reality is an insurer can have a fantastic product, but if the person selling it cannot make a living, it’s generally not supported.
This is where embedded insurance makes sense – for the customer and the insurance broker.
"By embedding insurance via API at the point of sale, the product is available at the exact moment a customer needs it, inside a platform they're already using,” says Farquhar. "That's the mechanism that let us reach 300 000 beneficiaries without a 300 000-beneficiary-sized team or marketing budget."
Treating customers excellently, not just fairly
The Treating Customers Fairly (TCF) framework is adopted by all stakeholders in the industry. If treating customers fairly is the standard, SureStart knew it had to go over and above this to be competitive – it had to treat customers excellently.
SureStart worked on its Treating Customers Excellently (TCE) principles with the team and adopted them into its TCF policy. SureStart customer support revolves around the eight questions that make up its TCE principles and puts the customer at the heart of its service. All its QA monitoring incorporates the TCE principles as qualitative metrics.
From this monitoring, SureStart has added WhatsApp support and digital claims, as it identified it was difficult for certain customers to find a printer, print a claim form, complete it and send it back to the company. It is now working towards its North Star – Cover and Claims in a click by incorporating AI agents.
Digital distribution of insurance advances financial inclusion.
Financial exclusion in South Africa is often a result of an access problem, not a product problem.
A domestic worker, spaza shop owner or courier driver doesn’t need a different insurance product to what’s already available on the market – they need one that is accessible, affordable and on their terms. No branch visit, paperwork or minimum monthly premium largely driven by cost constraints. The access to financial products, not appetite or affordability alone, is what has kept large parts of South Africa’s working population uninsured.
"Traditional distribution can't economically serve a customer paying R15 a month – the cost of writing the policy exceeds the commission earned on the policy," says Farquhar. "Technology largely removes that constraint. We're not discounting the product to reach these customers. We're removing the structural cost, through technology and B2B2C relationships, that made reaching those customers unviable in the first place."
By doing this at scale, SureStart enables a premium of only tens of rands to become a sizeable policy when tens of thousands of beneficiaries are covered monthly.
What this means for South Africa's embedded insurance market
For platforms, fintechs and e-commerce players considering whether to build insurance capability in-house or partner with a digital insurance broker, SureStart's numbers offer a strong case to work with a truly digital broker. Farquhar sees this as directly relevant to South Africa's broader financial inclusion challenges, where reaching underserved customers cost-effectively is often the barrier.
"If distributing insurance still requires an army of people and paper-based application forms, it will only ever reach the customers who can afford that overhead to be built into their premium," Farquhar says. "Technology is what makes it viable to reach the next 300 000 – and the 300 000 after that."
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