BUSINESS MAVERICK: Race for low-to-middle income consumers heats up in SA’s insurance industry

For many years, SA’s insurance industry that targets low-to-mid income consumers has largely remained the same.

These firms are African Rainbow Life and Sithega Holdings, which are both backed by wealthy business titans that will duke it out for a large wallet share of low-to-middle income consumers, the majority of SA’s consumer base. African Rainbow Life and Sithega Holdings want to change the make-up of the financial services industry, which they believe doesn’t appropriately cater to the needs of all consumers, mainly low-income individuals.

African Rainbow Life CEO Bongani Madikiza believes that the new company can dominate SA’s fiercely competitive insurance industry. “The idea that there is no space for more competition is wrong. The market is big enough to share,” the former MD of Old Mutual’s Mass & Corporate businesses and CEO of the now defunct Lion of Africa Insurance tellsWe are targeting people with five or six funeral policies, but don’t have life cover, disability cover or a savings plan.

For now, it has sizable players in its corner, Sanlam and African Rainbow Capital Financial Services, which holds a 51% and 26% shareholding respectively in African Rainbow Life after a more than R300-million capital injection. The balance in African Rainbow Life is held by Siyakhula Consortium .

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