Fireside Chat: The Hollard Experience in Inclusive Insurance - April 2018 - Munich Re ...
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Fireside Chat:
The Hollard Experience in Inclusive Insurance
April 2018
Who is Hollard?
• Established in 1980 in South Africa
• There’s always a better way!
• Lion-hearted, innovative entrepreneurial start up – number of industry firsts
• Built on partnerships and doing well by doing good
• Strong presence in rest of Africa and East Asia
• 40 years old in 2020 – transitioning from family owned start up to medium sized
corporate, without losing the juice that makes Hollard special
2nd biggest S/T, Life and
>USD 1.6bn
S/T insurer Cell captive
GWP
in SA licenses
Hollard has six Group Goals – emphasising our commitment to
inclusivity and social good
FINANCIAL & RISK
SOCIAL GOAL PEOPLE GOAL
GOAL
• Social impact • Total Value Add • Engagement
• Return on Equity • Living the Hollard Way
• Dividend paying ability
• Green Control Environment
TRANSFORMATION
CUSTOMER GOAL EXCELLENCE GOAL
GOAL
• FSC Level • Customer NPS • Data and digital
• Preferential Procurement • Broker NPS maturity index
• Employment Equity • Efficiency improvement
• No of low income customers
• Financial inclusion
We believe we are currently moving towards a future in SA defined
by ‘Beacons of Excellence’ – we expect InsureTech disruption
High Degree of (Adjacent and non-related industry
Insurance Disruption Ecosystem/Value chain partnering)
Low State Effectiveness High State Effectiveness
Capacity (Infrastructure)
Equality (Social) (Traditional players with current
Corruption (Governance) incremental innovation in
Economic Policy (Growth) product/distribution)
Low Degree of
Insurance Disruption
We have structured our business to enhance Hollard’s strengths
– our own ‘Beacons of Excellence’
Hollard Life Hollard Insure
Life, investment, and mass market Motor and household, and
products through affinity partners, Corporate and Commercial through
brokers and agents, and direct brokers and direct
Hollard Partner Solutions Hollard International
Short-term and life products (HINT)
delivered through partnerships with Hollard’s Afro-global family outside
retailers, banks, motor, and others South Africa
We enable better futures by ensuring our
customers’ dignity and dreams
Internal and external, incl. employees,
partners, service providers, and end
consumers
High income inequality is one of South Africa’s major challenges;
for us, it means serving customers of varying means
Hollard Life
~USD 5,000
R 25k- R 60k
>R 60k
1m
0.1m
Eco Active SA Vulnerable Informal Emerging Mass Middle Affluent
population (56%) (10%) (25%) (7%) (3%) (0.3%)
Source: AMPS
We create value for our customers by providing targeted offerings,
through appropriate channels, to meet demographic-specific needs
Emerging R3k to R12k
Mass R12k to R25k
Demographic
Middle R25k to R60k
Affluent R60k+
Ave Premium
We operate across a significant number of channels to reach our
customers
BTL direct Digital FMCI
ATL direct response Branches
acquisition Web, Mobi Stores
Performance Hollard PnP
Hollard Kaizer Chiefs Hollard Boxer
Marketing branches (new)
Passive sales Retail agency force Low cost, High Touch, High Tech Sales Agency Force
Blister packs Agents within stores Field agents Tied agents
Funeral Tied life Tied
Massmart Hollard
Pep Game homes and agency force worksite
(pending) branches
parlours (nascent) agents
Brokers IFAs
Indepen-
Equity Traditional dent
brokers brokers financial Virtual Channels Physical Channels
advisersThere are a range of challenges in the emerging, mass, and middle
markets and we have learnt several big lessons in addressing them
1.1 Competitors are non-traditional and
everyone needs to adapt Pass
Child
Born Child
Grows
away
up
2.2 A brand must be a member of the community Child
attends
Retire
Primary
school
3.3 Highly relevant, omni-channel distribution
Child
and engagement Becom
e grand
Attends
high
parents
school
4.4 Advanced analytics
Loved
After
one
school
5.5 Provide the most important products and passes
away
training
services – not necessarily the most profitable
Make
home
First job
6.6 Truly customer-centric strategy improv
ements
7.7 Credit, savings, investment, and risk needs Purchas
e house
Change
jobs
or flat
and products are interchangeable Get
Move in
w partn/
married out of
Get en- home
8.8 It will soon be extremely difficult to be a gaged
mono-line playerTo provide access to inclusive insurance, we have found physical
presence to be essential
Hollard’s Physical Presence:
Covision Branches (3)
HAD Retail Branches (180); Containers (10)
Head Office Arcadia
Head Office Owl
Regional Branches (21)
Boxer Mini-branches (36)
Excludes the significant
distribution
infrastructure of our
partnersWe work hard to be part of the communities we serve
In the mass market, we have successfully partnered with a wide
range of partners from different sectors
Retailers Funeral Parlour JVs Credit Providers Radio Stations
Clothing Retailers • Two Mountains • Direct Axis • Ukhozi FM
• 21st Century
• Edcon
• Covision
• Ackermans
• Truworths
Fast-moving Consumer
Insurance (FMCI)
• Boxer Sport Affinities Debt Management Group Schemes
• Pick ‘n Pay • Kaizer Chiefs • IDM • TBFS
Wholesalers, DIY, • Funeral Parlours
Appliance & Office • Churches
• Game, Massmart • Stokvels
Pharmacy • Other affinity
groups
• ClicksEdcon has been our most successful retail partnership to date –
with over 4 million in-force products
The Hollard – Partner Partnership/ JV
Products Channels
• Credit Life • Outbound Call Center
• Funeral • Inbound Call Centre
• Non-underwritten Life • Store
• Personal Accident • Digital
• Daily Assist
• Cell phone
Hollard Partner • Gadget
Since:
• Legal Edcon stores: 1,528
• Dental
2001
• Home protectInsurance partnerships are extremely difficult to get right – we
have learnt that there are several critical success factors
High brand affinity which will
Partner’s target customer
stretch to insurance
Product take-up propensity & Appropriate sales method and
proposition channel
A Win-Win-Win situation and
Partner alignment and resourcing
nothing less
Shared values and vision Measurements of successThe Low-Cost Agency Model channel is challenging, but offers specific benefits for both the customer and the JV Build trust Trust is a significant enabler to insurance sales. Face to face can be used to build a relationship and ultimately trust Tangibility Proving physical presence to a customer mitigates the fear of insurance’s inherent “promise to pay when it’s needed” concept Customer convenience Customers don’t need to travel to a FS branch, but instead the agency model allows for customers to be engaged where they are Customer education Face to face interactions can be used to ensure understanding and educate customer about insurance concepts as well as specific product details Footprint flexibility Low-cost agency model is dynamic where agents can move to identified areas
In all partnerships, the customer needs must be considered as
the first step
Customer Needs
Value for money
Convenience
Simplicity
Flexibility
Trust
Education
Customer ExperienceAll of this is underpinned by consumer education – which improves persistence and increases VNB
Thank you
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