June 10 - Shortly after Discovery announced that it was entering South
Africa's
short term insurance industry, Liberty made a similar announcement,
saying that it would be providing consumers with a new, top quality product.
However, while Discovery is seeking to establish a brand new business,
Liberty said that it would be using and expanding on Standard Bank's well
established market presence to launch its new short term insurance arm.
At present, the group has embarked, together with parent company Standard
Bank, on a study to examine how best to enter the market.
The Chief Executive Officer of Liberty Retail, Steve Braudo said that,
domestically, Liberty is running a pilot project with Standard Bank, whereby
Liberty advisers have access to Standard Bank short term insurance. He said
that the bank is well established and entrenched in the country's short term
insurance market, and it holds short term licenses domestically. Liberty thus
has access to these products.
"Based on the results of the pilot, Liberty will consider it, but for the
time being we are focusing on our core business," he said. "We are currently in
stage 2 of our pilot which is expected to last until next year."
Moving Away from Life Insurance Products Only
Liberty currently operates a range of long term insurance
products, including health, life, investments and property insurance, and has
written over 2.6 million policies.
One insurance analyst Ed D'Almeida, reckons that there is space
for another player in the market as "most financial service companies are
finding that they need to diversify into a whole range of financial services
because their best customers are their existing customers." However, he
stressed that a new competitor would need to find a niche market. "There is
always space for companies that have go significant client bases to actually
leverage off that client base and sell more products," he said.
It remains to be seen whether Liberty will follow a broker
distribution model, or whether it will try a direct sale model.
Related Insurance Articles: * Mutual & Federal to Launch New Product in Third Quarter * Government Urges Patience for NHI Release * Insurance Group Warns SAns About Travel Abroad * Discovery Joins South African Short Term Insurance Market
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