Hollard fills the growing gap of underinsurance in the mass market

Hollard is transforming life insurance by bringing simplified, hassle-free life insurance options to the broader market and to new policyholders.

As part of this ambitious attempt to extend long-term insurance coverage to a wider market, Hollard will complement the product line with an education campaign, aimed at informing consumers of the importance of insurance coverage. ‘life insurance.

The product line, known as Hollard Life Select, centers around a fully underwritten, no-frills life insurance policy that speeds up the application process for customers. The streamlined product is then tailored to meet customers’ unique financial needs.

Mark Berrington, head of strategy and insights for Hollard’s Life Solutions division, shares that studies have found that many South Africans are grossly underinsured, leaving their dependents in dire financial straits when the main breadwinner family member dies, loses their job, or suffers from a serious illness or disability that renders them unable to work.

According to the Financial Sector Conduct Authority (FSCA) Financial Sector Outlook Study 2022, only 10% of South African consumers have life insurance. This figure is down from 12% in 2019.

Gerhard van Wyngaardt, Executive Director of Actuarial at Hollard Life Solutions, explains that Hollard Life Select is designed to provide a simplified and affordable solution to closing the underinsurance gap in the market.

Hollard Life Select includes several benefits for the life insurance consumer, but also helps financial advisors explain the product. First, the policy wording and marketing materials have been greatly simplified, making them easily understandable.

“We have devoted particular attention to striking the right balance by offering simplicity without compromising coverage in order to adequately protect policyholders against all critical illnesses,” van Wyngaardt points out.

He says, “We wanted to give consumers the ability to easily understand what they are covered for, while making it less cumbersome for intermediaries to explain its benefits.

The revamped product also has fewer than 100 permutations, down from more than 3,600 in previous versions, making it complex for financial advisors to sell and difficult for clients to understand and buy.

Origin: Supplied.

“This was achieved by removing variations in benefits with low usage by our customers. The process did not compromise benefits, but allowed us to provide policyholders with only the best benefits,” says van Wyngaardt.

In keeping with Hollard’s reputation for creating life insurance policies with the fewest exclusions, the new product line once again contains a minimal number of material exclusions, providing policyholders with the highest degree of certainty possible. in the payment of benefits. For the financial intermediary or advisors, this reduces the risk of unmet client expectations.

Financial education gap

The slow adoption of life insurance in the low and middle income bracket can be attributed in part to the general misconception that life insurance only covers the insured in the event of death. This is not the case, as life insurance is a complex and multi-faceted product that also provides additional coverage benefits such as critical illness, disability and contingencies in life that may make the policyholder insurance unable to earn an income.

Farhaana Baartman, marketing manager and client at Hollard Life Solutions, notes that market misperceptions about life insurance require the amplification of financial education so that the myths that leave many people financially vulnerable can be debunked.

According to Baartman, there is a need to improve education on life insurance and the various products that fall under this product category along with their associated benefits. Only 56% of consumers are aware of life insurance products, according to 2020 South Africa Financial Literacy Baseline Survey.

“Furthermore, a large portion of South Africans have misconceptions about life insurance, including that life cover is only for the wealthy or those with families. As such, there is a gap in education as everyone should know they need to be covered and should have some form of life cover in place,” she says.

She explains that the decision to simplify, democratize and extend life insurance products to a wider market is underpinned by a marketing campaign dubbed let’s be alive.

Covid-19 and let’s be alive

Baartman explains:let’s be alive is a fitting way to celebrate getting back to normal after the Covid-19 outbreak. While a substantial drop in mortality is cause for celebration in itself, many of us still dread venturing out or being in public spaces such as shopping malls for fear of contracting the virus.

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let’s be alive is a campaign that voices these concerns and calls on consumers to get on with living their lives while ensuring they take the necessary precautions to protect themselves and their financial well-being.

Interventions put in place to foster financial inclusiveness

Baartman says the revised life insurance products have addressed issues that many consumers have identified as barriers to purchasing a life insurance policy. These include long and tedious application processes, complexity of policy wordings, misalignment between premiums and perceived value, and general financial knowledge.

In addition to creating a simplified and accessible product, Hollard has also made it easier for potential policyholders to complete their applications and underwriting requirements, with the launch of a digital solution for intermediaries – called Holly.

The solution, developed in conjunction with reinsurance giant, Hannover Re, shortens the sales cycle for financial advisors and provides a technologically advanced and environmentally friendly solution as all documents are digitally signed.

Baartman points out that while there are different ways for consumers to purchase life insurance products, such as using online platforms, the use of financial advisors can provide invaluable interpersonal communication that facilitates a transparent and worth of trust.

“The advice provided by a financial adviser can help make a final purchase decision, which the parties can often finalize the same day, because the adviser takes care of everything and there is minimal customer involvement.

“For many consumers, the journey with a trusted advisor is less stressful, simpler and painless when the financial advisor helps ensure the product meets the client’s needs.” Baartman concludes.