As the South African insurance industry struggles with premium collections, Metropolitan GetUp launches an innovative flexible payment solution to better serve their clients and solve for the current industry-wide issue.
Prin Munsamy, Solutions Actuary at Metropolitan GetUp explains that from a business perspective, “Premium collection is currently the most challenging part of an insurance product’s design process, specifically those solutions that target the emerging market.” He expands further, “This market is vast and consists of several sub-segments, all exhibiting different payment behaviours. As our economy contracts, unemployment remains rife, and many in this sector continue to survive (and thrive!) through entrepreneurship, with younger consumers exploring side hustles and gigging opportunities to supplement their incomes.” According to a 2020 McKinsey report on the future of payments in South Africa, up to 45% of income earned in South Africa is still received in cash.
Munsamy explains that an increasing cash economy means that a large proportion of financial transactions in key consumer segments happen outside the traditional payment channels making the typical stop-and-debit order collection mechanisms decreasingly effective. This phenomenon is not unique to the insurance sector so Metropolitan GetUp looked to its deep consumer insights to understand how to best solve the payments problem.
What emerged is a flexible payment solution that addresses the economic reality of many South Africans – money doesn’t come in at the same time every month and while there is a strong desire to pay, with the rigidity of the traditional systems it isn’t always possible.
Ultimately the payment flexibility options will facilitate clients managing their payments in ‘Any’ of these ways:
1) Any method – clients can select their payment method from an extended list of options that includes cash (via 9000 retailers and over 150 000 traders), digital payment platforms (such as Zapper and Snapscan), Instant EFT or digital payments facilitated by credit/debit card as well as debit or stop order – and can update this preference as often as they choose to do so.
2) Any time – payment can be made at any time of the month, and premiums can be settled in several installments, whenever the client has access to funds.
3) Any person – payments can be made via several contributors from immediate family through to friends lending a helping hand.
4) Any amount – clients can pay whatever amount they can afford during the course of the month, even if it is not the whole premium owing. Cover will be adjusted accordingly each month. Clients with a good payment history will benefit from a sophisticated and unique model that fluctuates their cover in line with the actual payments made.
Munsamy concludes that at Metropolitan Get Up, “We believe that empowering our clients to manage the funding of their policies via an agile, dynamic, and innovative solution will improve our client value proposition, preventing them from losing their cover as a result of product rigidity.”
