South Africa's Untapped Graduate Market: A Goldmine for Intermediaries

Deon Theunis, Intermediary Support Head at Sanlam Risk & Savings

As the financial world becomes increasingly competitive, intermediaries are constantly seeking new ways to expand their client base and secure future revenue.

With its high earning potential, low risk, and long-term customer value, the South African graduate market is proving to be an untapped opportunity for those looking to foster early relationships with tomorrow's leaders.

Sanlam’s Professional Student Package
Sanlam has previously offered a Professional Student Package exclusively for students studying for an NQF 8 qualification in a specified field, and only available to those in their fourth year of academic studies. This has now been revised to their second year of study – a market first.

Another unique enhancement that Sanlam has introduced is offering occupational disability benefits to professional students in their third academic year.

Introducing the Graduate Student Package
Spotting a gap for graduates, Deon Theunis, Intermediary Support Head at Sanlam Risk & Savings, says Sanlam has created a Graduate Student Package. This differs significantly from its Professional Student Package and provides comprehensive cover on its premier platform for all qualifying NQF 7 (3-year degree or 4-year diploma) students from their second year of study.

The group’s new graduate package answers the long-standing call to offer cover for students that don’t form part of the professional student market, allowing them to access the Wealth Bonus benefit and take full advantage of compound interest. Unlike the Professional Student Package, the graduate student package only offers lump sum benefits.

Ringfencing revenue from day one: The Graduate Student Package’s potential
According to Theunis, Sanlam’s Graduate Student Package starts from as little as R90 per month. “The risk premiums of employed graduates currently on our books is on average 14 times the initial monthly premium of the Graduate Student Package, presenting immeasurable potential for intermediaries.” The graduate market is relatively untapped and staggering in size, being some 3.5 times bigger than the professional market.

The parent gap
Historically, students have been a difficult market to tap into. Student packages are traditionally offered from the fourth academic year, with intermediaries reaching the student market by activating on campus. Not all intermediaries are able to do this, and so these students are often overlooked despite their potential. Sanlam has recognised this and suggests intermediaries speak to parents during the annual review season to discuss their children's options. By highlighting the threefold factors of time and compound interest, good health, and early positive habit formation fostering lifelong strong financial management skills, intermediaries can help students put their financial foundations in place.

Fostering financial literacy early on
Financial literacy is a significant issue in South Africa. Theunis says that by empowering intermediaries to engage meaningfully with young people through critical risk cover, Sanlam is helping future generations become financially savvy. Student debt is also a significant concern, and risk cover is a critical means of mitigation when “life happens”.

Additional cover can be added to the student package according to the individual’s needs, such as funeral cover for their extended family. “By offering proper cover that continues to meet the needs of students as they progress in their careers, intermediaries can build long-lasting relationships with young clients.”

Intermediaries are crucial to helping young people accrue early financial foundations that will stand them in good stead for the rest of their lives. The graduate market is exciting because of its untapped potential and because it offers an excellent opportunity for a timely intervention.

By helping more full-time students become financially confident, intermediaries can usher a new generation towards full economic inclusion and self-sufficiency. That’s where the real opportunity exists to change the course of one young person’s life, and to change the nation’s economic outlook as well.