THE IMPACT OF MICRO INSURANCE ON BROKERS. By Mr Jay Mngoma…
THE IMPACT OF MICRO INSURANCE ON BROKERS. • PROS:- • Lower entry barriers and it ends there.
Cons: COST OF DOING BUSINESS • Compliance, Governance, Marketing, Business Planning, Infrastructure set-up and Development, FSB’s TCF and Consumer Protection mechanisms, Financial and solvency reporting costs.
Cons: RESILIENCE • Sustaining lag time between start up and validation – it is easily 3 – 5 years of capital gobbling before profitability
Cons: VIABILITY • Definition of markets and marketing strategy – Regional or National player, this will have a huge impact on capex and risk management. Deal with groups or individuals. • Competition and competitiveness, traditional big role players can always undercut and frustrate smaller role players (Free market). SAB bought Schaft Breweries only to shut the operation down.
Cons: ACCEPTABILITY • Insurance is a grudge purchase as there is no tangible sampling of the product, so that customers would look for quality of marketing tools, locality, office branding, staffing, technological competence or savvy. • Entry set up and continuity Assurances, as a last line of risk management. The entity must ooze stability, dependability and stamina. • The people who are the face of the business, become the benchmark of the competency and acumen of management
In a Nutshell • I believe the collaboration between established entities and new entrants would be the most suitable model, namely:- • (i) Big Insurer brings Underwriting, Capex and mentorship; • (ii) Micro insurer brings access to markets, influence and Black market Intelligence. • Mentoring and Profit Sharing, co-operation vs. confrontation – Micro Insurance would create an opportunity of long term and meaningful development of PDI’s and sustainable wealth creation.
Thank You Mr Jay Mngoma