2. SOUTH AFRICAN INSURANCE ASSOCIATION.

3. Access to financial services presented by Leila Moonda 26th August 2005 PCOF

4. Transforming the short- term insurance industry HistoryHistory GoalsGoals ChallengesChallenges ProgressProgress

5. History The Financial Sector Charter, which was signed in October 2003, effectively commits all signatories to actively promote a transformed, vibrant and globally competitive financial sector that reflects the demographics of South Africa and contributes to the establishment of an equitable society by effectively providing accessible financial services to black people

6. History cont. Effective access to short-term risk insurance products and services means appropriate and affordably pricedappropriate and affordably priced made available through appropriate and accessible infrastructuremade available through appropriate and accessible infrastructure to 6% of black persons in the LSM (Living Standard Measures) 1-5 grouping by 2008to 6% of black persons in the LSM (Living Standard Measures) 1-5 grouping by 2008

7. Goals SAIA identified two major goals i.t.o. access: 1.To broaden access to the products of the short-term insurance sector = Appropriate product 2.To educate consumers in LSM 1-5 market re financial services sector products = SAIA FSC Consumer Education Initiative

8. Product: Challenges Target marketTarget market Product usageProduct usage Current distribution and communicationCurrent distribution and communication Premium payment facilitiesPremium payment facilities Physical access & service deliveryPhysical access & service delivery

9. Product - progress SAIA Access Group finalised position on accessSAIA Access Group finalised position on access Approved by the SAIA BoardApproved by the SAIA Board Currently in product design phase after having talked with the target marketCurrently in product design phase after having talked with the target market Next steps will include getting buy-in from all relevant partiesNext steps will include getting buy-in from all relevant parties Launch date planned for 2005Launch date planned for 2005

10. Product (cont) Traditional & non traditional distribution channelsTraditional & non traditional distribution channels MeasurementMeasurement –Effective = policies sold and in force –1 point: industry target –3 points: individual targets

11. Product (cont) Only the personal lines insurance requirements will be addressed at this point. Any commercial or SME requirements may be addressed at a later stage

12. Product: What will it look like A generic product will be developed in accordance with the guidelines for general use by the industry. This product will be branded in line with the Mzansi bank account.A generic product will be developed in accordance with the guidelines for general use by the industry. This product will be branded in line with the Mzansi bank account. Generic product to cover basic risks:Generic product to cover basic risks: –Homeowners & household contents combination, cell phone as starting point

13. Product: What will it look like This will be a no frills policy to provide cover for the home, household goods and personal effects against specified perils i.e. Fire, Lightning, Explosion, Storm, Flood, Impact and Theft (sudden and unexpected events)

14. Product: Language Although current research indicates that the client would accept English legal documentation, service and marketing could be in the client’s language of choice.Although current research indicates that the client would accept English legal documentation, service and marketing could be in the client’s language of choice. Policy documents are being designed in simple, plain English.Policy documents are being designed in simple, plain English.

15. Product: Premium Collection –Existing traditional and non- traditional methods –Irregular premium payment –NB!!! Mzansi

16. SAIA FSC Consumer Education Initiative Viviene Pearson 26 th August 2005 PCOF

17. SAIA FSC Consumer Education Initiative – Progress Strong commitmentStrong commitment Recommended pooling of 0.2%’sRecommended pooling of 0.2%’s R4 million i.t.o. 2004 profits (More about projects to follow)R4 million i.t.o. 2004 profits (More about projects to follow) R7.4 million i.t.o 2005 profits (Projects already recommended to our committee)R7.4 million i.t.o 2005 profits (Projects already recommended to our committee) Synchronised effort – FSB strategySynchronised effort – FSB strategy Set own criteria i.t.o. Charter - to be followed strictlySet own criteria i.t.o. Charter - to be followed strictly

18. SAIA FSC Consumer Education Initiative – Progress Workshop: 1.Project plan for implementation: –Separate independent initiative –Separate bank account –Project Panel –Collection of funds –Selection of projects – approval process –Implementation of projects plus transfer of funds

19. SAIA FSC Consumer Education Initiative – Progress Workshop: 2.Criteria –Must have stated objective consistent with Charter –Measuring effectiveness of projects is NB –Must be aimed at black people –Must be aimed at LSMs 1 – 5 –Must be focusing on financial knowledge – generic programmes not insurance only!!! –Must reach as many people as possible

20. SAIA FSC Consumer Education Initiative – Progress 2.Criteria – continued –Must be education – not marketing!!! –Must have timeline/timeframe –Cost must be identified, monitored, adhered to –Must identify appropriate target market –Holistic approach to be sought – synergies with other consumer education strategies (e.g. FSB – maximise efforts)

21. SAIA FSC Consumer Education Initiative 2004 Projects – meeting all these criteria & objectives!!! Teacher training plus resource = R1 000 000 (+ FSB contribution = R500 000) Resource published, distributed Workshops are being rolled out in all provinces, subject to implementation of National Curriculum programme roll out

22. SAIA FSC Consumer Education Initiative (cont) Financial literacy workshops throughout SA, mainly rural areas = R2 000 000 (FSB 5 year project – more funding needed!) Roll-out in all 9 provinces commenced – staggered Church halls, shebeens, tribal courts, schools, community centres, etc Target: 10 000 in this pilot year 2004 Projects – meeting all these criteria & objectives!!!

23. Financial literacy workshops [PMG note: graphics not included]

25. SAIA FSC Consumer Education Initiative (cont) 2004 Projects – meeting all these criteria & objectives!!! Reaching commuters through Comutanet = R800 000 (+ FSB contribution – R400 000) Each day, 17.1 million economically active South Africans commute, via taxi ranks to and from their place of work.

26. Reaching SA’s commuters Through Rank TV 2 Comutanet radio stations Casettes in taxis Live mobile and trailer promotions at ranks

27. Reaching SA’s commuters Rank TV reaches 1,2 million commuters per day [PMG note: graphics not included]

28. Comutanet interactive promotion in action!!!! [PMG note: graphics not included]

29. SAIA FSC Consumer Education Initiative 2 NB points: Product talks with people from target market = NBProduct talks with people from target market = NB Privilege to see how this makes a difference in people’s livesPrivilege to see how this makes a difference in people’s lives

30. Benefits of SAIA approach –Synchronised efforts and pooling of funds maximise reach and success –Branding is out – generic approach easy –Makes basic education logical – no clouding with regards to specific products –FSB partnership provides further benefits: Holistic approach – existing strategy but able to select relevant projects to sector FSB resources Assist in FSB mandate from Minister of Finance re consumer education

31. SAIA FSC Consumer Education 2005 Watch this space!!!