Imagine young students sitting in a Wits (University of the Witwatersrand) lecture hall being asked by Professor Robert Vivian what insurance is and why it is important to our economy.
My concept of insurance and its value was the perception I had developed from my parents. They considered it to be too expensive and a grudge purchase.
Assistance policies
However, as Professor Vivian was quick to tell us, insurance is important to the South African economy as it is a form of savings and encourages saving across all consumer groups.
Millions of funeral policyholders know that a few Rands a month can ensure that anyone can have a respectful burial and that the family that is left behind will bury their loved one in a dignified manner.
Our industry however, needs to develop beyond offering assistance policies. It is our responsibility to create other insurance products that will gain that respect and will continue to encourage the concept of saving.
Financial inclusion
National Treasury’s 2011 policy paper “A safer financial sector to serve South Africa better” lists, as one of the four key financial sector policy priorities expanding the access through financial inclusion.
Financial inclusion means that all individuals and businesses have access to useful and affordable financial products and services that meet their needs and that such financial products and services are delivered in a sustainable way.
Stable financial conduct means people and businesses plan for everything from long term goals to unexpected emergencies. Financial inclusion does not only benefit the disadvantaged but benefits the economy as a whole because it is linked to a country’s economic and social development, and plays a role in reducing extreme poverty.
The government has played a key role in facilitating financial inclusion by adopting the Financial Sector Charter. In addition South Africa is working towards fulfilling its commitment to implement the G-20 Principles for Innovative Financial Inclusion.
The nine core G-20 financial principles are:
Practise and apply
Despite financial inclusivity being a legislative requirement, each one of us has the ability to practise and apply at least one of the above nine principles. It is our social responsibility to contribute to financial inclusion in the manner we are best able to.
Let us change the view of insurance. Let us build a positive perspective. Let us all contribute to alleviating poverty.