Listed short-term insurer Santam has launched South Africa's first affordable household insurance product aimed at the lower-income sector, the company announced on Monday.
The new product, called Santam MultiHome, is initially being launched to homeowners in Soweto and will provide the company access to a growing new consumer base.
Mpumi Tyikwe, Santam's Executive Head for Corporate and Specialist Distribution, said this was the first insurance industry offering in line with the banking sector's entry-level "Mzansi-style" low-cost products, while also being compliant with products currently being developed by the South African Insurance Association (SAIA).
According to Tyikwe, MultiHome would feature premiums as low as 15 rand per month, being targeted at South Africans living in the lower income market segment. Many of these South Africans were largely uninformed about short-term insurance or had been unable to obtain conventional household cover in the past, he pointed out.
Tyikwe said preliminary research into this lower income market had found the primary reasons for not having insurance were affordability and lack of awareness. The product had been developed in the wake of the Financial Sector Charter recommendations that the insurance industry improve access to the lower end of the market, where there is less than 1% penetration.
"MultiHome covers homes and their contents comprehensively and includes cover for all natural disasters, fire and theft. It also covers damage caused during riots and strikes. Premiums range from 15 to 240 rand per month, depending on the value of homeowners' property and possessions. Personal liability cover up to 100,000 rand is included free of charge with all policies."
In line with its commitment to improve access to insurance to the lower end of the market, Santam had also joined forces with Thebe Risk Services to provide a low-cost housing insurance product for employees at various institutions with whom Thebe has a relationship, Tyikwe added.
Initially available to consumers in Soweto, Santam plans to extend its offer to the greater Gauteng province in the next two to three months before it is later rolled out systematically to the rest of the country.