Zimele Initiative Needs More Hype Injected Says Insurance Industry

March 17 - Five years ago, leading companies in the South African banking and insurance industries joined together in a commitment to provide their services to the countries low-income sectors. The banking industry made substantial progress with its Msanzi initiative by offering formal banking services to a large sector of the population that had never enjoyed this privilege before.

Unfortunately, the Zimele initiative, launched by twelve of the industry's top life insurance companies, has not been as successful. While the idea of the initiative was to bring affordable life and burial insurance to the country's poor, recent numbers published by FinMark Trust show that membership at burial and funeral parlors across South Africa has actually increased by 10% in 2007 - in direct contrast to predictions that these establishments would die a slow death with the launching of Zimele.

One of the main reasons for Zimele's lack of success, it seems, is based on the the fact that it is not visible enough in the market. Insurance brokers receive very little commission for selling a Zimele brand, while bigger companies only set aside tiny portions of their annual marketing budgets to push Zimele products.

The Chief Executive of the insurance industry's mouthpiece, the Life Offices Association (LOA), Mr. Gerhard Joubert, said that the organization was aware of the problem and that "drastic steps" needed to be taken to bring this product to the forefront of the industry.

A spokesman for Old Mutual said: "We need to create more hype about Zimele. There are gaps that we need to close". At present, no visible marketing campaign for the Zimele brand has been launched among poor income areas in the country, despite the fact that the insurance industry generates over R80-billion in annual premium income.