An analysis of the development influences of the low-income cover market-end in South Africa

Abstract

The National Treasury and Financial Services Board in 2011 highlighted the urgent need of an inclusive insurance sector for low-income households known as microinsurance. The ‘insurance gap’ representing many low-income earners who are still uninsured remains a challenge in South Africa. This study therefore analyses the factors affecting the low-income cover market-end development in South Africa. These factors and criteria were empirically validated and a structured questionnaire employed as measuring tools to determine microinsurance penetration influences. A total of 123 responses were analysed from a non-probability sampling of 200 insurance employees. The results show that none of the factors portrayed satisfaction with microinsurance penetration and all the mean values were below 60%. Therefore, business strategies must be employed for an inclusive microinsurance market. All the factors need managerial address.