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