Insurance: The back to basics route
The foundation market represents the last frontier for an overtraded industry, and the race is on to capture it
If there is one certainty over the next two years it is that the Mass Foundation Cluster (MFC) at Old Mutual will overtake Retail Affluent as a profit contributor. MFC, once considered the unglamorous end of the business collecting small recurring premiums (it was previously known as Group Schemes) will soon overtake the traditional core historically white Old Mutual Retail Affluent business in its earnings. Over the past 20 years MFC has grown alongside its client base, establishing a strong position among emerging middle-class workers such as teachers, nurses and police officers. What has been tougher is the foundation market of people earning less than R5,000/month. And they are almost always without the security of payment which the government payroll system provides to life offices. Thembisa Mapukata, head of the foundation business at Old Mutual, says 80% of the employed in the target market work in the private sector: domestic workers, gardeners and cleaning services are attr...
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