They said it could not be done. They said that life insurance was sold and not bought and said that brokers and life insurance go hand in hand. In just under seven months, South Africa's first fully direct life insurer – 1Lifedirect – has caused these critics to change their tune.
Interim financial results from Lifedirect show that the company has managed to exceed its budgetary expectations by selling over R1 billion worth of life cover per month.
According to Lenerd Louw, CEO of 1Lifedirect: When 1Lifedirect was launched in March 2006, we predicted that by 2008, the life industry would be worth R11.5 billion and comprise 2.7 million policyholders. We aimed to capture 6% of this market by 2008 with a premium income of over R500 million per year. We have sold just under R7 billion worth of life cover to date and are expecting that by 2008, we will surpass our initial financial forecasts."
Louw continues: Our entrance into the life insurance market was greeted with an overwhelming response from the South African public. Many of our clients were jaded by the shoddy service they had experienced in the past and were looking for a viable alternative. These figures confirm that you can cut out the middleman, and save, when it comes to life insurance."
1Lifedirect's products have proved particularly popular for the emerging market. Louw believes that the emerging market is not encumbered with broker ties and has welcomed the direct life insurance channels ease, convenience and cost-effective quotes.
Consumers noticed that there was a need for change within the life insurance industry and are now confident to investigate other options. Many consumers did not know how much commission they were actually being charged in the past by brokers, and have welcomed the fact that they do not have to pay broker commissions with 1Lifedirect.We are confident that the success we have experienced to date will continue and look forward to a bright future" concludes Louw.