Wait a minute, we hear you saying, you’ve got the wrong reader here –

On the contrary. If you operate in the unsecured loans space, you are precisely who we want to speak to. We aim to motivate you to turn your business model entirely on its head, by implementing digital insurance alongside your loan products  – and there are some compelling reasons to do so.

The state of the nation

It’s a tough time for South African consumers. The economy remains weak after several  bouts of Covid-19, unemployment is at an all-time high and the costs of food and fuel are soaring. As a result, many consumers get into sudden financial difficulties, and find themselves having no choice but to turn to unsecured loan providers for help. According to DebtBusters’ Q4 2020 Debt Index, households’ reliance on unsecured debt surged in 2020 and, in January last year, debt-counselling enquiries to the firm had risen to 40% more than one year before.

Sometimes people just need a small loan to get over the hump to payday – but your next loan applicant may also be going through a retrenchment, sitting with the sudden costs of a family member’s funeral, or fending off hourly calls from a debt collections agency they can’t evade. Whatever the case, they may well be coming to you under duress, in a negative state of mind. The loan you offer them could feel bittersweet to them – on the one hand, it will solve an immediate problem. On the other hand, it will land them with high-interest loan repayments.

What offering customers a way out of the debt cycle would mean to them

Imagine if, at the same moment that you approved your next applicant’s loan, you also offered them insurance against the future need to borrow due to a repeat of their current predicament? Given the current financial stress they are facing, insurance would feel like a very attractive proposition to them. The young student whose laptop has been stolen; the man paying for his uncle’s funeral; the mother of two who just lost her job – they would all be wishing that insurance was something they already had in place. You could offer them a mix of:

  • Credit Life 
  • Income Protection
  • Family funeral cover
  • Short term cover for their possessions

Yes, but these insurance offerings, you’re thinking, might do away with one of our most valuable properties – the repeat borrower. Yes, they might – but they could also turn every individual who comes to you for a fast little loan into an ongoing customer for years. Insurance would provide your business with the security of customer stickiness. 

In implementing insurance, your business model would transform from reactively serving come-and-go borrowers, to proactively growing off a steady base of come-and-stay customers. You would still be operating in the short-term loan space, but you could also increasingly thrive in the extended insurance space – and outpace competitors with your dual revenue stream. 

The impact on brand reputation

By adding insurance to your business, you would reposition your brand image in the market, from being a company that just helps individuals get out of a financial bind to one that also helps them safeguard themselves against future financial stress. As one leading loan provider’s website says, “We don’t want to keep you in debt.” Implementing insurance could help it to achieve that aim. 

Helping people aside, does insurance make business sense?

Definitely. Globally, the insurance sector is predicted to regain a healthy growth trajectory in 2022, as consumers seek to protect themselves against uncertainty post-pandemic, and as  business confidence rebounds. Digital insurance, in particular, is set to grow at its highest level until 2026 (AMA Research & Media). Investing in an insurance product line right now is a low-risk move with high-returns potential.

You would of course share the revenue from premiums with a partnering underwriter, so achieving a return on investment or time to value from your insurance products offering would not happen overnight – but the incoming revenue would be consistent, and will grow as you cross-sell and up-sell to customers in the coming years. 

In the old days, launching insurance would have required a call centre, distributors, a small army of administrators and new business systems but, because digital insurance is set-up, distributed and run via cloud-based SaaS it becomes a very cost-effective investment. There are virtually no distribution costs, zero hardware costs and no need to hire more staff. You would pay only for implementation, and a monthly subscription for the insurance software.

Here’s another business consideration. While the number of consumers taking out unsecured loans might be high in the current depressed economy, what happens when the roaring ‘20s take off, consumers flourish and unsecured  loan applications slow down? By contrast, insurance trends towards growth during good economic times.

It’s a move in the right (digital) direction

The need for digital transformation is inarguable for any competitive financial institution in 2022. We have found that the implementation of modern cloud-based SaaS for insurance often stimulates traditional financial institutions to upgrade their wider business systems, discard older “legacy” systems in favour of more agile technology and transform into a digital-first operation. This makes them more competitive in the market and enables them to offer consumers a faster, better service.

You’ve piqued my interest – but we don’t need the business disruption this would cause

A decade ago, you would be right to raise this concern. Integrating insurance into a loans-based business model would have been difficult given all the paperwork, logistics and administration involved. 

However, through our industry-specific cloud-based insurtech SaaS (software as a service), white-label digital insurance products can be seamlessly embedded into your existing business systems and implemented as an MVP in as little as a month, with no disruption to your day-to-day operations. A bit of work from our specialist team, both off-site and on-site, and next thing you know, “Insurance” will appear as a clickable option on your website. 

Sounds workable – but why partner with Click2Sure in particular?

Because we truly understand your business; we’re not just techies. When it comes to engineering industry-specific solutions for the financial sector, there are very few operations like Click2Sure. Our team draws on a significant depth of African financial sector insight and specialises in enabling traditional insurance companies, retailers, manufacturers, neo banks, microfinanciers, debt consolidators and loan providers to implement white label digital insurance products that are:

Everywhere consumers are: To stimulate policy uptake and to make policies easy for policyholders to manage, we engineer insurance products to be omnichannel in nature. They can be distributed and accessed via multiple consumer touchpoints: website, mobisite, app, WhatsApp, SMS, social media and QR codes. Once a policy is live, the policy holder can easily manage it (updates, claims, enquiries, upgrades) via a dedicated Customer Portal available on desktop and mobile.

Easy to manage: While our team offers ongoing support post-implementation, we have found that most of our existing clients have quickly familiarised themselves with the distribution and administration side of their new insurance products, with little difficulty. Informative dashboards, intuitive functionality and automation wherever possible make managing policies, claims, payouts and product iterations fast and easy. When it comes to insurance, we’ve taken 99% of the paperwork out.

Data-rich: We engineer insurance solutions that provide clients with richer customer data, which allows them to cross-sell and up-sell to their customers effectively, and to adjust their insurance offering as needed. Data on policy anniversaries, claims trends and the take-up rate for different insurance products is always readily accessible, helping to drive astute business decisions.

Summing up the benefits of adding insurance to your unsecured loans business:

  • Psychologically, someone taking out an unsecured loan is the right target market for insurance.
  • Digital insurance is set to grow at its highest rate until 2026 – the loans industry may not.
  • Transform from a single-revenue-stream business model into a dual-revenue-stream model.
  • Digital insurance implementations often unlock company-wide digital transformation.
  • Insurance software – insurtech – provides a stream of rich consumer data to drive strategic business decisions.
  • Implementing insurance is a way that you can profit while  helping South Africans get out of the debt trap – and that can only be a good thing, both for individual South Africans and the economy.

If we’ve swayed you a bit closer towards disrupting your business model (in a good way), call +27 (10) 045 4019 or email to begin a shared journey in redefining South Africa’s loans industry.