Little fish (with) in a big pond

David Küsel, Sanlam Indie.

---

In 2018, Sanlam Indie made a massive loss; the company only sold a few hundred policies and its small team was falling apart. Just called `Indie’ at the time, the digital business was an entirely separate brand, with no obvious connection to Sanlam. Ask Edwin Theron, head of product and pricing at Sanlam Indie, why the brand was struggling and he’ll tell you that it has a lot to do with the fact that they were an unknown player in an industry that sells trust.

“We certainly weren’t the poster child for innovation and success,” adds David Küsel, chief product officer at Sanlam Indie. But in 2019, everything turned around. Now rebranded as Sanlam Indie, the business was selling around 4 000 policies a month, the team had doubled in size and securing the business’ spot in the local insurance space. So, what happened? According to Küsel, the leadership team at Sanlam Indie was essentially forced to ‘grow up’ a bit and acknowledge that Sanlam, an insurance industry giant, could teach them a thing or two about this business. “Our mandate is to be more experimental and get things done much faster, but what we’ve learned is that doing so goes a lot smoother when we tap into the knowledge, and embrace the support, of our 100-year-old big brother.”

When Sanlam launched its millennial-focused digital business in 2017, it gave the ‘startup’ a really wide brief. “Sanlam basically just told us to come up with something that would be more appealing to younger clients and that would future-proof the business,” notes Theron. This meant experimenting with different approaches to insurance and developing products that would resonate with customers today, and in 10 years’ time.

So they went back to basics.

The team started out by brainstorming what financial services they wanted that weren’t already available. “We had to think about the business of risk in a totally different way,” Theron recalls. “So often, businesses in the financial services space create products that they wouldn’t actually use themselves. We set out to design systems that are easier to use, more efficient and that can ultimately give clients a better deal. Using digital technologies, we can make everything slicker, simpler and hassle-free.”

So often, businesses in the financial services space create products that they wouldn’t actually use themselves.

Edwin Theron, Sanlam Indie

As part of their efforts to ‘go back to basics’, they also set out to educate customers. According to Küsel, the idea is to not have someone buying a policy that they don’t need or understand. As such, when someone signs up for a Sanlam Indie product, they’re sent a series of emails explaining all the ins and outs of what they’ve just bought. “For us, it was important to provide customers with the information and education they need to make more informed financial decisions,” he says.

Insurance pricing is based on the pooling of risk, says Theron. We all know that a smoker and a non-smoker will pay different premiums, but what we may not know is that the industry traditionally groups people based on broad categories and charges all of the people in these groups a standard rate. In the pre-computer days, this approach was effective because insurance businesses would use these groupings to create risk tables that brokers could use to calculate the most appropriate premium. Today, we have millions of data points about each customer that allow us to get a clearer picture of each individual’s risk profile. And the strategic use of this information allows them to offer more personalised premiums.

“Depending on your needs, buying life insurance used to be fairly complex and could take as much as six weeks,” adds Küsel. “We can do it in 10 minutes. You apply. A contract is emailed to you, and you’re covered.”

Sanlam Indie streamlined the process by making everything simpler – from the actual insurance products it sells to the application process.

Traditionally, underwriting demands that a customer fill out a lengthy form and go for various medical checks. An insurance broker would then review the form and the test results and make a judgement based on the information provided. This explains why applying can take so long, notes Theron. The Sanlam Indie team spent a lot of time reviewing exactly what information was needed so that they could reduce the amount of questions customers have to answer. If, for example, you don’t have any complicated medical history, you may get away with answering around five or six questions. If your case is more complex, the brand’s algorithm will direct you to additional questions so that they can collect all the information they need to offer the right cover.“We don’t need a human to sell a policy, which makes it easier for customers to buy a policy. And this can sometimes mean that we have people buying our policies at two in the morning.”

Sanlam Indie has also developed a wealth bonus rewards system that encourages customer loyalty by paying out financial incentives at different milestones along the customer’s journey with the insurance business. “Insurance is generally a low-touch offering. I actually think that a lot of insurance companies don’t want to talk to their customers too much because then you’re reminding people about the pesky premiums they have to pay each month. We have a different approach. We want to do the opposite by making life insurance about living and be a part of our customers’ financial journey,” says Küsel.

Sanlam Indie is set up as an ‘independent’ division of Sanlam. It has the backing and support of Sanlam, but enjoys a lot of autonomy in terms of how it functions on a daily basis – from team structures, policies and recruitment to ways of working.

With a history in startups, Küsel confesses that managing the relationship between a startup and big brand like Sanlam has required a lot of discipline. “Where we can be agile, collaborative and solve problems more quickly, a larger enterprise has to answer to stakeholders and follow stringent processes,” he says. This can occasionally lead to a butting of heads. Ultimately, it all comes down to solving problems in a way that matches the business’ culture, while leveraging the experience and expertise of its well-established and well-respected parent company.

“We might not be turning the insurance industry on its head,” says Küsel, “but we are forging a new path where the wealth of knowledge from inside Sanlam is being coupled with modern technology and great design to create something truly impactful for both our business and our customers.”