Young Money Is All About Securing the Bag(s)

3 min read 29 October 2021

In South Africa, 38,400 HNWIs account for 48% of the almost R10 trillion that South Africans are worth and the youngest among them seem to really be into investing into fashion and other non-traditional assets. Finding innovative and relevant ways to insure these has become a leading edge for creating meaningful insurance products, which is why Santam is focused on its newly launched Executive Product campaign.

Karen Muuren Head: Segment Solutions at Santam says “At the end of the day we all understand the realities of living in South Africa. Between crime, load shedding and more we’ve come to understand that customisable cover is crucial as it speaks directly to an individual’s concerns. Addressing these needs is exactly what our Executive Product aims to do.”

As one famous urban poet once noted “mo money, mo problems” and the same is true for South African HNWIs with personal and asset safety being things that weigh heavily on their minds.

“Gen Z increasingly is seeing fashion as an alternative asset class, with more cultural significance than traditional stocks and shares,” explained financial journalist Lucy Maguire to

What Are They Buying:

According to a report by Bain & Co from earlier this year, the luxury goods market in China is up by nearly 50% and the New York arm of the iconic auction house Christie’s has spent the year hosting auctions in which Birkin bags have had a starting price of between R1 million – R1,5 million.

Turning fashion pieces into profit is not just a financial decision. In a world where one’s Instagram feed means as much as one’s portfolio, having assets that one can display on platforms like Instagram and Tik Tok has driven many young HNWIs in the direction of bags, shoes, and other items of cultural significance.

“It’s both cultural currency and bragging rights,” said business director at Gen Z consultancy DoSomething Strategic Mary Noel when speaking to Vogue business.

According to the global Knight Frank Luxury Investment Index for 2020 some of the most prized items are:

International trends do not always translate directly into the South African context and to some extent that is true. Nonetheless, South African HNWIs are also evolving. Over the last decade, New World Wealth  reports that HNWIs are beginning to move away from real estate and started investing in equities and alternatives, with equities accounting for 29% of their assets. Real estate remains a large category at 25%, other prominent asset classes include business interests (20%), cash and bonds (16%), alternatives such as foreign currency, commodities, and venture capital (8%), and collectables (2%). Additionally, South African HNWIs often invest offshore.

South African HNWIs hold around R7,2 billion worth of fine art from many notable local artists that include: JH Pierneef, Irma Stern, Maggie Laubser, Alexis Preller, Gerard Sekoto, Vladimir Tretchikoff, Sydney Kumalo, William Kentridge, John Meyer, Walter Battiss, Cecil Skotnes and Anton van Wouw.

Protecting yourself:

All of that begs the question of how South African HNWIs protect their valuables. Given the realities of loadshedding, crime and other uniquely South African problems, safeguarding one’s wealth can be trickier than it would be elsewhere.

“With so much on the line, these individuals require bespoke personal cover insurance that keeps abreast with technological changes, market shifts and more. One needs myriad custom-built solutions, which is where we come in,” says Muuren from Santam.

Unlike other products on the market, the Santam Executive product was developed for clients that require bespoke solutions designed to protect what is important to them in an ever-changing world. The solutions cover a variety of valuable items – from fine art and cars to luxury homes and jewellery. With high cover limits and a dedicated team of claims and service consultants to meet individual needs, the policy also offers savings of up to 20% on one’s vehicle insurance premium, if one drives less than 15 000 km a year, and SOS services, with 24/7 emergency roadside assistance, home-drive assistance, household repairs, legal advice, medical and emergency services, as well as route assistance, to name a few.

Several enhancements have also been made to the product, such as the amendment of the acceptance criteria to a minimum contents value of R 800 000 and a minimum buildings value of R2.5 million.

In addition to that, the ‘replacement of your car or light delivery vehicle’ coverage has also been amended. Previously one of the conditions was to replace the client’s car or light delivery vehicle with a similar make and model in the event of this vehicle being stolen or uneconomical to repair. The vehicle was required to be not more than 12 months old from the date of first registration and to have travelled less than 30 000 kilometres. These terms are now amended to 24 months and 60 000 kilometres respectively.