
Pele Moleta, CEO, BotswanaPost
An innovative joint venture between Hollard Life Botswana and BotswanaPost will bring funeral and parcel insurance products within reach of non-traditional markets and potentially pitch the rapidly-growing insurance group towards securing significant market share within the next year.
Hollard Life Botswana Acting CEO, Mr Modiri Phuthego says given BotswanaPost’s substantial national footprint, the initiative will reach the emerging market of traditionally unbanked citizens in informal employment.
“The joint venture harnesses Hollard Life Botswana’s expertise in delivering affordable funeral insurance and the reach of BotswanaPost’s extensive branch network, thereby facilitating greater insurance penetration,” he says.
The partnership will also transform the traditional insurance distribution model by boosting the access Batswana have to affordable financial and insurance products. Many currently have difficulties in accessing these products or no access at all.
The move is expected to generate a significant number of sales. Effective April 2, it sees Hollard Life Botswana underwrite the insurance products; provide policy administration support and handle the claims administration while BotswanaPost’s national branch network will serve as the distribution channel through which customers purchase the insurance.
In the medium-term, the roll-out of additional products, including other life insurance, will further boost market share.
A wholly-owned subsidiary of Hollard Insurance South Africa, Hollard Life Botswana is a registered long-term insurance company focusing on simple long-term insurance products including funeral and credit life. Parastatal BotswanaPost operates 125 post offices nationally, employing around 870 people.
Mr Phuthego says the company is committed to establishing social change in Botswana by making a positive difference through the business it conducts and the Motshidisi funeral policy dovetails with that ideal.
“It is an affordable, reliable, convenient and innovative funeral cover protecting families against unexpected expenses when faced with the loss of a loved one. The policy provides a cash pay-out when a family member dies to use towards the associated high funeral costs, effectively delivering on our social aim for being a catalyst for positive and enduring change,” he says.
Mr. Phuthego says as a newcomer to the country’s insurance industry, innovation will remain the key to penetrating the market. As a market first, this joint venture ticks that box and boosts financial inclusion as well.
Hollard Life Botswana already offers products through retailer group Edcon (which includes the Edgars and Jet stores) and is looking to expand its reach with a similar arrangement with other retailers.
BotswanaPost CEO Mr Pele Moleta says the parastatal aims to diversify its services to communities, including offering internet connections within its sites, and the initiative is a means by which to achieve that goal.
CEO of the Hollard Group South Africa, Nic Kohler, says partnering with the national post office makes real sense due to the fact that little or no new infrastructure is required to facilitate insurance sales. Savings from these cost efficiencies can be passed onto the consumer, making for a more attractive product proposition. Post offices also tend to be geographically widespread, which means that more people are able to access products available at these points. “A real win-win-win is facilitated; the consumer wins, the Post Office wins and Hollard wins”.
The Motshidisi funeral policy requires no medical examination or bank account. A main member aged 18-64 years is offered cover for life as long as the premiums are paid. Each sale has an automatic 30-day cooling off period and there is no waiting period for accidental deaths.
However, natural deaths will only be covered after a six-month waiting period. Everyone covered by the policy has to either be a citizen of Botswana or a permanent resident living within the country. Mr Phuthego says valid claims will be paid within 48 hours of Hollard receiving the required claims documents.
Potential policyholders can visit any BotswanaPost branch, where they can pay their initial premium and retain their till slip. The policy document is included in the pack received and ongoing premiums can then be paid either in cash at BotswanaPost branches or via debit order.
Four policy types maximise clients’ options, starting with the P5000 family funeral plan for P27.95 per month and escalating to the P15000 family funeral plan which includes parent cover and a cash-back option for P195.95.