Guardrisk, South Africa’s largest cell captive insurer, has been granted South Africa’s first micro-insurance cell captive licence by the Financial Sector Prudential Authority (FSPA). Through its micro-insurance licence, Guardrisk can now sell individual life, group life, credit life and funeral insurance; as well as products that provide cover for motor, property, legal expenses, and accidents and health. The guiding principle behind micro-insurance is set to offer insurance products in dedicated segments and markets. Herman Schoeman, CEO of Guardrisk, explains: “Traditionally, the most significant barrier to entry in the insurance industry has been the minimum capital requirement of ZAR 15 million as well as the significant cost involved in running and managing an insurance company.” He adds: “For life and non-life cell captives, the required capital is reduced to ZAR 1 million and with cells in a microinsurance cell captive licence it reduces even further to ZAR 250,000.” Xolani Nxanga, executive for market development at Guardrisk, states: “Micro-insurance cell owners will also get assistance with risk spreading through access to reinsurance markets, insurance expertise — including compliance and governance in a highly regulated environment — and most importantly, skills will be transferred.” “Thus, the cell captive becomes an incubator for full black ownership and upskilling,” Nxanga adds.
