Santam launches SA’s first digital insurance solution for micro and informal businesses

3 min read 17 May 2023

Santam, South Africa’s largest short-term insurer, has launched the country’s first ever digital insurance solution for micro township enterprises, which will cost between R75 and R195 a month, providing these businesses with financial security and recovery in the event of a loss.

The Small- Micro- and Medium-sized Enterprise (SMME) sector is an important growth engine for the South African economy. Yet the critical need for greater support in creating a more enabling environment has never been stronger, with recent statistics from a comprehensive study by the University of the Western Cape revealing that 70%-80% of local small businesses fail within the first five years.

Against this backdrop, Santam - in partnership with MoyaApp - has launched South Africa’s first fully digital Emerging Business Insurance solution to support the flourishing township enterprise sector. Santam has recently refreshed its strategy, which among others, prioritises the usage of digital platforms to connect with policyholders, reaching out into new market segments, including the uninsured sector such as township enterprises, and supporting efforts aimed at narrowing the risk protection gap.   

Santam’s innovative entry-level digital insurance solution offers three cover options at different price points. The Starter solution is available at a monthly premium of just R75, the Standard option costs R125 per month and the Premium solution is available at R195. All options offer protection for stock and contents (due to fire, explosion, acts of nature, malicious damage and impact of objects), personal accident (the enterprise is compensated in the event of the owner’s death or permanent disability) and political riot (F4 SASRIA cover), with the value of cover for each risk increasing relative to the package.

“The Standard and Premium cover options also offer cell phone insurance for the business owner’s smartphone, which is an essential tool to ensure business continuity for township entrepreneurs who often run their entire operation from their phone. However, the SASRIA cover is perhaps the most important feature of the Santam Emerging Insurance solution. Each package provides up to R500 000 of cover for special risks such as civil commotion, public disorder, strikes, riots and terrorism,” said Gloria Tapon-Njamo, the Acting-CEO of Santam’s Partnership Solutions business unit.

According to various research studies, township enterprises face many challenges, among them are a lack of access to finance, skills scarcity and the prevalence of crime in some areas. Being insured can have far-reaching benefits. For instance, many businesses were affected as a result of the July 2021 riots, a significant number of whom were small-scale township businesses which never reopened. Insurance solutions for the emerging market are therefore a very necessary level of protection against such systemic risks.

“Sadly, most township businesses simply do not have the means to withstand a loss and are forced to shut down. The reason most township micro businesses can’t access funding is that financiers have no guarantee that they will be able to continue repaying their debt if something goes wrong, such as a fire or theft occurring. The fact informal businesses now have access to affordable, quality, formal insurance should make them more appealing to financiers, enhance their growth potential and in the long run, their power to create more jobs. However, most critically in the short-term, it will allow them to stay in business and sustain themselves and their families, in the event of any unforeseen risks or interruptions,” added Tapon-Njamo.

The Santam Emerging Business Insurance product will be available to MoyaPay clients from May 2023 and will become more widely available over the next three to six months. Businesses with an annual turnover of up to R2 million qualify for the Santam Emerging Business product. The product is entirely digital, with all processes from the inception of the policy to the lodging of claims managed entirely data-free through the MoyaApp.

Due to many emerging businesses being in rural or informal residential settings with no formal location – which insurers usually need to provide cover - the MoyaApp has a functionality which is able to pinpoint a person with no fixed or accurate address through an identifiable geo-mapped location finder.

“We are extremely proud to have developed this fully digital insurance solution that caters to the needs of millions of under-served and financially excluded entrepreneurs. Santam is committed to promoting financial inclusion and economic growth, and this product is a manifestation of that commitment. The Emerging Business Insurance solution is an important addition to Santam’s Commercial Insurance offering and allows us to offer quality insurance to businesses at every stage of development,” said Tapon-Njamo.