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Hollard tests Indonesian waters

12 September 2014 Hollard

Hollard Insurance is steadily moving further into international territories, as it seeks to establish itself in key developing markets.

April 2014 saw the launch of a pilot in Indonesia. Scheduled to run for six months, the pilot involves a product that was tailor-made for the Indonesian market, and seeks to test market response, conversion rates (how many responders actually end up buying a product), and premium collection methodology.

The pilot was conceived when Tokio Marine, Japan’s largest insurer, approached Hollard with a view to partnering in the Indonesian market. Should the pilot succeed, there is an opportunity for the partnership to create the largest direct insurance operation in this growing market.

“This project presented us with an opportunity to introduce a new product into a market that has no experience with this kind of insurance. It is exciting, and I’m glad we took this leap of faith,” says Mandla Shezi, managing director of Hollard’s Affinities and Direct division.

According to the World Bank, Indonesia is the world’s third most populous democracy with an estimated population of 249 million and is considered to have one of the fastest emerging middle classes in the world. It is anticipated that the middle income segment will more than double in size by 2020. Financialsystems are very different from those in South Africa, with bank account penetration being very low, and debit orders being non-existent. As a result, most insurance premiums are paid a year in advance.

The call centre set up in Indonesia for the pilot saw a massive response to initial communications and all indications are that the pilot will exceed its response targets. Should the pilot prove successful overall, Hollard and Tokio Marine will carefully plan the next steps. What is clear is that both parties intend spending what the opportunity may demand.

“Expansions of this nature require new strategies and systems that are tailored to specific markets, systems that may be very different to those required in South Africa. While we are approaching things very carefully, we are confident that our determination and our can-do-attitude will see Hollard making a success of this exciting venture” concludes Mandla.

This project has been enabled through a partnership with Tokio Marine. To find out more about this company, go to: http://www.tokiomarine.com.my/about/about.php?info=corporateinfo

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