Three ways Santam is making insurance accessible in underserved communities

South Africa’s township economy and broader micro-enterprise sector are home to millions of entrepreneurs who keep the economy moving.

Despite contributing around 40% of GDP and employing more than 13.4 million people, these enterprises remain highly vulnerable. With national insurance penetration estimated at just 11.5%, most operate without adequate protection, leaving them exposed to risks that can wipe out years of progress overnight.

According to Londani Zulu, Chief Executive Officer of Santam Emerging Business, much of this gap is shaped by structural barriers that extend far beyond affordability. These include limited financial literacy, low digital readiness, and uneven access to formal financial services – legacies from a system historically not designed for township and rural entrepreneurs.

“For many small, medium and micro enterprises (SMMEs) in underserved communities, risk is not an abstract concept – it’s a daily reality. These entrepreneurs often lack the opportunities, tools, and advisory support that larger firms enjoy and many are not financially or digitally literate, may not have laptops or broadband, and rely heavily on mobile phones to run their operations,” Zulu explains. “In a context where employment is scarce and side-hustles increasingly serve as household lifelines, giving these businesses a fair chance to survive setbacks is essential for both social justice and economic resilience.”

Events such as the KwaZulu-Natal floods, civil unrest, or everyday incidents like theft or fire can be devastating for small businesses with limited capital reserves. For Zulu, building resilience in these communities is not just a commercial imperative but an inclusion priority. “It requires insurance products that are relevant, easy to access, and designed around the realities of the township economy.”

Santam’s approach centres on three interconnected strategies designed to expand financial inclusion while enabling meaningful economic participation.

1. Tailored, market-appropriate products
Santam has prioritised developing insurance solutions that match the needs and risk profiles of micro and small enterprises, especially those turning over under R2 million per year. This includes simplified cover for spaza shops, salons, mobile traders, e-hailing operators, delivery riders, and other township-based enterprises.

A key innovation is the SARIA F4 product, developed after Santam petitioned SASRIA for a more appropriate option for this market. For just R5 per month, businesses can secure R500 000 of cover for political riot, looting, or civil unrest – a significant improvement on the traditional F2 product, which carried a minimum monthly premium of R50.

“Santam is currently the only insurer automatically attaching F4 to qualifying commercial policies,” Zulu notes. “This ensures that even the smallest enterprises receive meaningful protection - a direct contribution to transformation and resilience.”

Other innovations include affordable modular cover and first-loss structures, which helps reduce premiums without compromising essential protection.

2. Expanding access by meeting entrepreneurs where they are
Access is one of the biggest barriers for underserved communities. Many micro-entrepreneurs do not have laptops, formal office setups, or the time to complete complex onboarding processes. Santam therefore enables policy sales and servicing through digital tools that reflect how these entrepreneurs actually operate. Because margins on policies priced at R50 or R120 are narrow, Santam also relies on partnerships with banks, affinity groups, and organisations that already have large customer bases. These partnerships extend reach and embed insurance into community ecosystems.

3. Making cover affordable, flexible, and supported by financial education
Affordability remains a key barrier, but Zulu emphasises that knowledge is just as important as price. “Many SMMEs do not fully understand their risks or the purpose of specific covers, which leads to low uptake of insurance and significant underinsurance.”

As part of its commitment to transformation, Santam is investing in Consumer Financial Education (CFE) programmes delivered through community-based initiatives, branded learning centres, and partnerships with local organisations. “These initiatives help build long-term trust and improve understanding of insurance fundamentals,” says Zulu. “They also support better decision-making at claims stage, where trust is earned through transparent processes and easy engagement,” he adds.

Looking ahead, Zulu hopes to see innovation not only in product design but also in expanding access to education. “Data costs remain a major barrier, and future initiatives will focus on delivering financial education in formats that are accessible without expensive data usage.”

Santam’s approach aligns directly with the South Africa’s broader transformation priorities. By offering relevant products, improving access, and strengthening financial capability, the company is helping black-owned micro-enterprises build resilience - a key driver of equitable economic growth. “Our goal is not once-off product uptake,” says Zulu. “It is long-term partnership: supporting entrepreneurs to survive shocks, grow sustainably, and participate meaningfully in South Africa’s economy,” he concludes.