INSETA to help grow high-potential Burial Society sector
The Insurance Sector Education and Training Authority (INSETA) is hosting an event this month that will set the foundations for organising and expanding South Africa’s high-potential, though largely unregulated, Burial Society sector.
The first-ever INSETA Burial Society Indaba takes place on 23 and 24 March in Johannesburg and will give players in the industry an opportunity to engage with government and key industry role-players around the establishment of a working framework, whilst at the same time exploring new opportunities for growth and skills development.
INSETA CEO Sandra Dunn said that Burial Societies – which have a large footprint within the country’s black communities and rural areas – are lacking the skills and resources to provide their large and growing market with the right products and services at the right prices, and risk losing their market share to the formalised financial services sector.
“The Burial Society sector operates largely at the periphery of the mainstream financial services sector, and this unregulated space leaves customers vulnerable to poor service, or even unfair pricing and practice. We believe both the players within the industry and the public will benefit from the establishment of a proper, suitable working framework,” said Dunn.
She added that Burial Societies have massive potential for wealth creation within South Africa’s poor and vulnerable communities, given the right assistance.
“Research has shown that more than 20% of the South African adult population are members of a burial society – so the importance of this sector must not be underestimated. Burial societies also represent a significant spend with members prioritising 15% of their income towards this financial product. The interaction and synergy between traditional burial society cover and more formal financial products creates significant opportunities and challenges, which must be explored,” she said.
This view was supported by Abe Mkhize of Impucuko Projects, a community development project organisation that is participating in the initiative.
“According to Insurance Sector Research, the Funeral Insurance sub-sector has experienced an increase in growth of 2.3% between 2004 and 2008. This is in contrast to the increase in unemployment in all the other sub-sectors during the economic downturn. Despite this, the Funeral Insurance sub-sector has so far been neglected as far as skills development is concerned.
“Under these circumstances it becomes important to have a working framework in place and Government has expressed a desire to integrate the sector into the formal economy,” explained Mkhize.
The Indaba, which is free to all Burial Societies in Gauteng, will pave the way for this process, said Dunn.
“It will indeed be a challenge to mobilise and organise the sector but INSETA will help to ease the transition by providing the training and skills development that is needed.
“We will be working with industry players to make the process easier and to give support.”
Dunn added that the sector reported to be facing many challenges, which included competition from the formalised sector, lack of appropriate risk rating skills; inadequate controls to manage fraud risks; and the myriad of problems that HIV/AIDS creates.
“Burial societies need to organise themselves to become more competitive in the economy. We hope to help both them and their significant market through this Indaba and future interventions. Even in the current unregulated space, the sector has mass market appeal – we therefore need to develop a working framework that allows the societies and their customers to get the most out of the large amounts of money already being spent on funeral cover,” said Dunn.
The Burial Society Indaba takes place at the Turffontein Racecourse in Johannesburg from 07:30 – 16:00 on 23 and 24 March 2010. Call INSETA on 086 113 0013 to register before 18 March. Attendance for Burial Societies is free.
