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Category:
Insurance
News /
Life
Insurance /
FRANK.NET / November 2010
South Africa's 1st Direct Life Investment Company Launches
SA's first direct life investment company, FRANK.NET was launched
with its own life license, creating a new category in the financial
services arena, with simple products and a frank, direct approach,
that is set to change the way people think about buying life
insurance, investments and health insurance.
FRANK.NET's leadership team have researched the insurance market and
simplified the multitude of available offerings into four products
for launch, namely: life cover, serious illness cover, disability
cover and salary protection. Thereafter plans are in place to launch
simple investment products followed by health products, giving
people direct access to investments and health insurance.
This is according to FRANK.NET CEO Lenerd Louw, who has an
eighteen-year track record in successfully building both short and
long term direct insurance businesses, locally and internationally.
He says that life investment is about maintaining the quality of you
or your family's life, should you die, get seriously ill, be
injured, or lose your job. "Over the last two years we have focused
on developing products that are straightforward and plainly serve
the needs of consumers. Simple processes and easily accessible,
standalone products, backed by world class technology, a
comprehensive digital and mobile strategy, and the support of a
dedicated contact centre, will enable consumers to get cover within
minutes over the phone."
Research has shown that South Africans are underinsured and Louw
attributes much of this to the usual complexity of the customer
promise.
"Generally people do not understand how life insurance
products work,"
he says.
Louw goes on to say that there is a gap in the market for a life
investment company that speaks simply, honestly and directly to
consumers and points out that FRANK's approach will be one of
'telling it like it is'.
"The essence of FRANK is to be open, transparent and forthright,
tackling subject matter that others might find uncomfortable or
unpalatable,"
he says.
"If
you are dying you are dying not passing away or expiring, we call a
spade a spade and cancer, cancer. Our consumers will know exactly
what they get and where they stand and will be able to make an
informed decision based on the transparency of our products."
He continues that the benefit of taking out life insurance with
FRANK is simplicity.
"You
pay FRANK a monthly amount which buys you an amount of insurance and
it is as simple as, if you die, we pay; If you get seriously ill, we
pay; If you get retrenched we pay."
FRANK is one of Liberty's new diversification businesses and whilst
it is owned and capitalised by Liberty Holdings, it operates as a
completely independent business, with its own board, brand, life
license, technology platform and customer base.
"It seeks to service the needs of a very different market segment to
Liberty,"
says Louw.
"FRANK will capitalise on the life investment
market by addressing a gap in the growing market that comprises
people who don't
want or need advice, but are looking for a simple and immediate
solution to an insurance need."
FRANK is also positioned to service the needs of the X and Y
generation, which Louw says will be addressed by adopting a digital
strategy, via social media networks like Facebook and YouTube and
search engines like Google and Yahoo, and in the mobile arena, by
capitilising on the growth and penetration of mobile networks in
South Africa and across the African continent.
While research suggests that a small percentage of life insurance
policies in force are direct policies, Louw says that this is set to
change significantly over the next few years.
"Consumer buying behaviour is changing and more people are buying
direct because of the benefits of accessibility, convenience and
access to information, empowering them to make their own choices,"
he explains.
"Against
this backdrop, we anticipate direct business to grow to at least 20%
of the life insurance market within the next few years in South
Africa."
He believes that the shift in social and income demographics
(including the ageing of a young population) over the next few years
in South Africa, combined with rate of penetration across the
African continent of digital and mobile technologies, will lead to
exponential growth in internet usage and that this in turn, will
have a significant impact on buying patterns with direct players
positioned to benefit from these trends.
Online purchasing is also on the increase with the soon to be
released Worldwide Worx Online Retail in SA 2010 report highlighting
online retail growth of 30% in 2009, with expectations that growth
will continue at a similar rate this year.
Louw points out that with the benefits of years of experience of
direct channels in both Europe and here in South Africa, across both
short and long term insurance, the FRANK management team knows how
to capitalise on this opportunity through their understanding of how
value can be leveraged.
"We have a great operating model, a formidable team and a world
class technology infrastructure that will ensure that we become a
leading direct life investment company,"
he adds.
"In
addition, our technology platform is web based, giving us mobility
with few barriers to entry across the African continent and into
other emerging markets."
As an example, to overcome one of the largest obstacles to
convenience and efficiency in the traditional life insurance space,
namely medical underwriting, FRANK has turned to cutting-edge
technology and a consumer focus.
"An intelligent interactive approach means that each client will be
engaged on limited questions that are appropriate to their
individual circumstances,"
says Louw.
"This
both simplifies the process and speeds it up, giving FRANK all the
information required to accurately assess the risk of each policy,
and importantly enables us to offer the right price to each and
every customer."
From a resource point of view, the management team has a successful
track record in managing direct businesses and have been handpicked
by Louw. He stresses that great care has been taken to select
employees that fit with FRANK's culture.
"I
have interviewed every single employee and can provide the assurance
that every person can and will live the FRANK promise."
Louw points out that FRANK is not about cutting out the middle man,
nor is it about paying out bonuses or providing cash back.
"It
is about simplicity and transparency and giving people what they
want."
The launch campaign will run across multiple media channels
including TV, radio, print, outdoor, mobile and online. True to the
straight talking FRANK brand, the launch message is simple, clear
and direct:
"If you die, we pay"
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