Insurance shake-up: Startup on mission to make cover more affordable, accessible to SAns

Simply Financial Services is an insurtech startup bent on shaking up the insurance industry to benefit all South Africans.

It's co-founded by Anthony Miller, a mechanical engineer who's incubated a number of startup companies utilising technology and data to solve problems.

The Simply CEO explains his motivation for entering the fiercely competitive insurance industry on The Money Show.

"My partner and I started the business with a very conscious sense of purpose. He'd been working as an actuary abroad; I'd been involved in a data fintech business which I'd sold out of, and this was an area where our skills came together."

"If we can get this right it can have a very positive impact on the lives of lots of people, even if it's not just Simply that's doing it."

Anthony Miller, Co-founder - Simply Financial Services

The main problem Miller sees with life insurance in particular in South Africa, is that it is 'extremely inefficient' and very ineffective as a result.

While the country's known for being innovative in the life insurance space, he says, a lot of money's being paid into products that are inefficient when it comes to the amount of cover people get for what they spend.

"To me, the biggest opportunity right now is to think about how we shift money from extremely inefficient products to ones that are much more efficient for people."

Anthony Miller, Co-founder - Simply Financial Services

Miller uses the benefits and expense of funeral policies versus life cover as an example.

They regularly deal with clients who have multiple different funeral policies from different providers, he says.

"In some cases you'll have leading providers that have six or seven policies with one customer. They should be contacting those customers and saying: You've got this inefficient way of covering yourself; let's see if we can restructure a policy that makes sense."

Anthony Miller, Co-founder - Simply Financial Services

If you take the cost per R 1000 of cover that you get on funeral policies, on average that can be 3-4 times more expensive than getting an equivalent amount of life cover, Miller says.

"There's high churn in the funeral market and there's a lot of fraud, so spending a lot of money on this cover is an extremely inefficient way to get cover paid out at the time that there's a claim."

Anthony Miller, Co-founder - Simply Financial Services

While having some funeral cover is an important part of an insurance portfolio for most South Africans, they often have way more than they need and nothing of anything else, says the Simply chief.

He also points out that people getting killed for insurance payouts is not limited to the life insurance space, as funeral policies these days can also be paid out in cash.

"They should be saying, the maximum funeral cover they need is say R60-70K and do the balance in life cover."

"That would free up a whole lot of money for them to spend on repaying debt or saving, things that are more productive."

Anthony Miller, Co-founder - Simply Financial Services

Miller also wants to see a big shift in group cover, which is mostly limited to the full-time employees of large companies at the moment.

"It's inaccessible for the bulk of employees in SA... and excludes non-traditional workers as well... and is often not relevant to the employee's needs."

"If we can start a new move towards making group risk more accessible and flexible for all employees, we'll go a long way to closing the cover gap that we have in SA, which is a big concern."

Anthony Miller, Co-founder - Simply Financial Services