At the end of last year, the National Treasury briefed parliament on the new Insurance Bill. Essentially, the changes back a new regulatory framework for the provision of accessible and affordable insurance to low-income South Africans. Given the inequality that still divides the rich from the poor, often physically, the bill is a welcome reform for a traditionally price-discriminating sector. In 2014, auditing firm KPMG estimated that formal insurance penetration in SA was just 14.28%, which highlighted the magnitude of the unprotected. South Africans, especially those who need financial protection, just can’t afford it. In our view market leaders in this category will need to embrace these new regulations in order for the bill to succeed. Established insurance providers in the country have built up empires, effectively managing risk by being averse to it. To open up their books to “higher risk” individuals, these companies will have to re-evaluate their operating models. In additi...

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