Home insurance for those needing it most
From an article by Insurance Thought Leadership
Sugar Insurance, a startup in South Africa, provides home insurance even for shacks costing a few hundred pounds, and without a street address.
Roughly a third of the population of South Africa live in informal dwellings in settlements and rural villages. Many of these are shacks, costing less than £250 to build. These homes may not figure on a land registry or have a certificate of building quality, but they are family homes nonetheless, providing an essential roof over heads and a safe place to store everything the family owns.
For the people living, working and raising their families in these conditions, insurance protection is out of the question. Until now.
Ntando Kubheka, an entrepreneur with a passion to make a difference in the world, is the CEO and founder of Sugar, a start-up insurer in South Africa, is on a mission to make home insurance accessible to those who need it the most.
Traditional insurers don’t want to insure homes that are in informal settlements, in rural villages or are homes in township areas but if their home goes up in flames, then everything they possess goes with it. With no stash of cash to fall back on, they become totally dependent on the good will of NGOs, the community and the church.
Sugar has been addressing 3 issues:
There are no formal addresses to identify a home.
Even if it is a bricks and mortar building, it won’t be built by a registered builder who has a license with a national agency.
There will be no formal documentation, such as a certificate of occupancy from the local authority, or building regulations or a land registry record.
These are informal dwellings that people have built where they want to build them.
Technology has been key. Sugar has built a platform using proprietary technology similar to What3Words to provide a location point for every dwelling. This system provides greater accuracy for identifying locations by scanning and remapping the country every six months with its in-house spatial platform to keep the core platform up to date.
Customer onboarding is entirely automated and driven by a conversational, AI-enabled chatbot. It typically takes 10 minutes for a new customer to go through the entire process of inquiry, quotation and buying a policy. The experience is specifically designed to be conversational in a choice of 11 languages.
As part of the onboarding process, customers take photos of the four elevations of their dwelling. Sugar then compares the images with its own datasets to validate the photos against what it already knows about the dwelling. The customer assigns the value that they think is sufficient to cover the rebuild cost of the property and the value of its contents.
Sugar send out an assessor for bricks and mortar property claims to view the damage and assess the loss. But for the Shack product, they pay out the full amount on every claim - it is a product for a fixed amount, say £250 or £500. Sugar minimises the risk of fraudulent claims by entering into a series of partnerships with retailers and do-it-yourself (DIY) stores. When a claim is paid, it is usually in the form of vouchers or a pre-paid card to spend at a store, and not in cash.
The social impact of providing financial protection to those who need it the most makes Sugar more than just an insurance company.
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