Playing the long game in the high-net-worth short-term insurance sector through stellar service

Rudolf Britz, Chief Actuary at Momentum Insure

The high-net-worth sector in South Africa is shrinking on the back of a prevailing trend toward emigration. Amongst other influencers, this trend is being driven by increasing inflation, stagnant economic growth, record high unemployment figures, as well as negative local crime statistics, which certainly plays into the negative narrative that adds to the attractiveness of emigration.

While external factors (Russia/Ukraine conflict, supply chain shortages) are also negatively impacting the global economic performance, the increased political uncertainty within South Africa, is resulting in the long-term local economic outlook being gloomy. This makes international destinations more attractive for high-net-worth individuals. Consequently, the high-net-worth market in South Africa is not increasing and by our estimation, it is steadily reducing. Looking at the insured market in general, there is a reduction in available new business, and given that insurance, in general, is attractive to those owning assets, the same rings true for the high-end of the market as well.

At Momentum Insure, we believe that the whole offering must be fit for purpose, whilst offering consumers choice where relevant: the Envoy product, offered by Momentum Insure is specifically aimed at the high-net-worth market and has options that suit this specific segment. To mention a few; the optional cover can be taken on a motor vehicle to replace vehicles with a new one in case of total loss for up to 3 years, and personal belongings one would sometimes take with you when traveling can be covered for up to 30% of the total sum insured (assets all risk). In addition, we have added a new section called Personal Enthusiast cover.  This cover is for clients who have hobbies (such as cycling, hunting, golf, etc.) where they have more than one similar item, they can now cover these items in full against theft at the risk address. For example: If you own 10 bikes with a total value of R100 000, with the value of each bike being R10 000. On any day, you are more likely to take along, at most, 3 bikes out of your home. The sum insured should be R30 000. This is the maximum value you are more likely to lose in the event of a loss or damage. The remainder of the bikes will be covered under the Contents section when in your home.  Lastly, something that resonates with the high-net-worth market is our Momentum Safety Alert.  Safety Alert is a panic button feature available on the Momentum App, which gives clients access to a network of armed responders in an emergency for free.  You can also nominate a loved one, to have access to this feature.

In terms of differentiation for this segment, we believe that for the high-net-worth market specifically, a face-to-face engagement works best to ensure that appropriate advice is given and that there is a real match of product benefits to the needs of the client.  For this reason, we offer this product through an internal face-to-face consultant or the existing trusted independent adviser of the specific client.

Whilst growth in this sector will most probably not be coming from new business opportunities, upselling and expanding service offerings will play a role in delivering some growth. For example, traveling, be it local or international, has started picking up again. Our all-risk cover is becoming popular within this segment, which includes Personal Enthusiast and the assets all risk extension mentioned above, offers cover worldwide and is an absolute must for high-net-worth individuals who travel frequently.

Ultimately, it is our combination of a highly targeted offering tailored to the bespoke needs of high-net-worth short-term insurance clients and personalised service through advisers or consultants, that we will strengthen our relationship with this segment and expand upon it as the needs of high-net-worth clients evolves.