Kevin Dixon, Chief Growth Officer, and Sean Wright, Head of Distribution at The Unlimited spoke to us about insurance distribution, inclusivity and specifically about The Unlimited distribution and product models.
Tony: Why do you think insurance penetration in South Africa is so low?
Sean: There are three main drivers.
- The first one is accessibility to insurance, particularly in the rural areas outside of the major metros, where access to insurance products is not that wide.
- Secondly, affordability. There is a lot of pressure on our lower income South Africans. Affordability is not getting any better and people have tough decisions to make.
- Then the third is education. There is a lot of work to do educating South Africans around how insurance products can help them in times of need and what the benefits of having insurance products are.
Tony: If we look at the rate of penetration and the vast number of people that are not covered by insurance. We have a huge problem with unemployment, which cancels out some of the market, other than very small types of cover that come with things like a cell phone. How would you describe the unserved or underserved market that we could get to, but we have not done enough to get there yet?
Sean: The underserved market is the low-income market where the need for insurance is greatest. As you mentioned, it is down to affordability. What we have seen is that people want these products. There is a massive demand for these products, but at the end of the day, they cannot afford them. Then, as mentioned above, it is the market outside metros.
Tony: In terms of products and distribution channels, which models and products do you think are most suited for getting to the more underserved part of the market?
Kevin: At a product level, if I had to start there, the market that does not have medical aids and has a need for access to good medical care. We have a very broad range of products, starting with gap cover and all the way down to basic hospital cash cover. So, if somebody is not able to work as they are in hospital, they need to pay their bills and they need to cover their expenses. So, the hospital cash health products are needed in that market.
Furthermore, the reality of life is that you can lose breadwinners in a family. You can lose loved ones and being able to provide for your family in those situations is incredibly important. Death products and funeral products, particularly in the market that we are talking about, are very relevant insurance products.
In the context of getting better and doing more to get those types of products into the markets, we have focused on the communities mentioned above.
The Unlimited started as a direct sales business 28 years ago, predominantly face-to-face, where we go into the community, and we sell face to face. We have been incredibly successful at accessing an entire range of markets, but particularly the market we are talking about because we can go into those communities. We can help people overcome some of the education barriers and talk them through what the cover is, why they need the cover, and how it works. That helps people really put their minds at ease.
That has been a highly successful sales channel for us in terms of accessing the low-end communities or communities outside of the big built-up Metro areas. Then we find call centres and telesales are equally successful, with access across the range.
Tony: Do you find that through a call centre distribution, you can achieve that?
Kevin: Absolutely, we spend a lot of time making sure we craft our scripts clearly. We put our agents through an extensive amount of training to be able to answer customers’ questions. We are particularly conscious of this when we build products for telesales businesses, that they are very simple to understand.
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Tony: One of the great things about the way that you do it, you create a huge amount of employment and not just employment, people are creating businesses that employ people in turn. Do you think that is sustainable with the onslaught of direct and insurtech?
Sean: That is something that we are very proud of at The Unlimited, our direct sales model and the way we have been able to, not only educate our consumers but also provide incredible employment opportunities to people across the country to work in our business. We bring in young South Africans with a basic matric and we train them, we educate them. We teach them how to run a business. We have successfully promoted over a thousand business entrepreneurs over the last 28 years, we train six to eight hundred people every month. These are life skills that these young entrepreneurs take with them for the rest of their lives. We are incredibly proud of the business model that underpins our sales channels, and it is just an amazing journey for young South Africans to join our business and be able to learn those skills.
Tony: You guys also focus on giving back to society through The Unlimited Child, supporting over 3200 early childhood development (ECD) centres. The Unlimited supports this initiative with the help of other people. Do you see this pull through to the entrepreneurial businesses that you help people create?
Kevin: We started The Unlimited Child as part of our business about 14 years ago now, targeting early childhood development, so kids anywhere from birth to six. The oldest would be about 16 years now, and we have kept very close tabs on the kids coming through the program. What a wonderful success story when it comes full circle and we can take the kids, that have come through that program, and support them in setting up and running their own sales business. We cannot wait for the day when we can talk about that and celebrate and hopefully in the next two or so years, we will have some of those success stories.
We have beautiful stories of our owners that have gone into their communities and have set up soccer clinics, have gone into their communities and have set up dog shelters or animal shelters. A lot of them get involved in and participate in The Unlimited Child.
The culture of The Unlimited and our whole brand belief that businesses should do better, and our massive transformative purpose of shifting lives, absolutely permeates into those businesses. It is wonderful to see those owners running their own businesses and giving back into their communities, the stories are incredibly powerful.
We have some ambitious goals and big dreams for ourselves. We want to create another 5,000 entrepreneurs over the next five years. We believe that would, directly and indirectly, support over 300,000, South Africans, making a very big difference.
For The Unlimited Child side, our goal over the next five years is to scale up our 3,200 ECD centres to 100,000 ECD centres worldwide. Scaling exponentially with many other like-minded philanthropies and corporates.
Our strong belief is; if we build a strong trusted brand where South Africans know who we are and trust us, that will absolutely support those two goals and allow us to just take the business to the next level and take our ability to shift more lives to the next level, which is really what sits behind the launching of our brand.