Cape Town, 19 September 2022 - Root, a Cape Town-based startup that’s building infrastructure for the digital insurance economy, is partnering with Mr Price Money to offer a simplified life insurance product to the retailer’s existing credit customers.
Mr Price Money is a division of the Mr Price Group Limited (JSE: MRP) and an authorised Financial Services and Credit Provider. Within this division is Mr Price Insurance, offering relevant and affordable insurance products to customers through value, choice, and convenience.
The Life Matters product, underwritten by Guardrisk, joins a range of insurance products that Root already hosts for the group.
The product requires no medical examination and customers apply simply by answering a limited number of questions. Depending on their needs, they are offered between R100 000 and R200 000 worth of cover. Unlike traditional life cover, which takes between 45 and 60 days to become active, cover starts right away.
“This product is a prime example of how household names with a strong brand identity can extend the services they offer by adding a suitable insurance product, says Louw Hopley, CEO of Root. “It has been designed for Mr Price and fulfils a very real need in the market. This means Mr Price can better serve its customers, while at the same time driving greater revenue and operational efficiency through its financial services products.”
Hopley notes that embedded insurance, like some of the products offered by Mr Price Insurance, and micro-insurance are growing globally. Microinsurance is low-cost (hence “micro”) insurance offered to people with limited income to cover specific perils, such as losing a cellphone, or being involved in an accident while on public transport. These individuals are usually ignored by mainstream insurance schemes and have not previously been able to access insurance.
Industry research identifies microinsurance as a critical trend in both traditional and emerging markets. The microinsurance market is estimated to reach US$ 111.84-billion by 2027, at a CAGR of 6.1% during 2022-2027. This growth is particularly expected in places where consumers have lower incomes, yet still require insurance against the vagaries of life without the large price tag that normally accompanies this cover.
“Insurtech helps to facilitate this by reducing the costs of offering and administering insurance products,” Hopley concludes.
