FNB launched yesterday its direct short term insurance product in a move that embraces general trends where customers seem to be bypassing intermediaries.
This launch represents another significant development in the structure of South Africa’s short term insurance market. The key question is; do you as a consumer prefer to deal with a broker or directly with the insurer. Brokers have carved a niche on a promise that their expertise delivers value for the client, off course at a fee. Over the years insurers which cut out the middle man made a strong emergence and value proposition.
The FNB product came with lots of decorations including rewards of 5% of premiums back in eBucks monthly and up to 15% annually.
Johan Nagel, CEO of FNB Insurance, said “Technology has empowered consumers to become more price and product aware, consumers demand better value for money and we have noticed a marked shift from the intermediary based distribution model to one of a direct sales model”.
FNB noted that in the UK alone an estimated 90% of all personal lines short term insurance is sold directly. “We have seen this trend becoming more relevant in the South Africa market as can be seen with the strong growth in recent years of local direct players”, adds Nagel.
FNB cited the 2012 KPMG Insurance Industry Survey which highlighted that the direct marketing business model has shown the highest growth and impact in the market.
“With the introduction of the FNB Insurance Direct Product we are able to enter a very competitive short term market in South Africa and offer existing FNB clients a powerful and competitive alternative to their current insurer,” said Nagel.
“FNB Insurance Direct will reward customers with up to 15% of their premium back in eBucks as well as comprehensive car, home and personal goods insurance”.
FNB Insurance Direct clients will receive the following additional rewards:
- 5% of their total premium back in eBucks monthly, if they don’t claim in that month;
- An additional 5% back after 12 consecutive months, if they don’t claim and have no late payments;
- An additional 5% back after 12 consecutive months, if they earn fuel or airtime rewards.
“This is the beginning of a rejuvenation of all our FNB Short Term and Long Term Insurance products with the aim of bringing insurance on par with the current value, self-service, innovation and rewards offered by our banking products,” said Nagel.