The insurance sector, one of many dented by the COVID-19 effects, has been recording high policy cancellations from clients who have lost incomes or jobs as a result of the pandemic.
Insurance is often seen as luxury by many, especially legal cover, and is among the spending items jettisoned first when tough economic times appear. Financial services giant, BIHL recently revealed that the difficulties encountered by customers in the first half of the year had manifested in policy lapses and an increase in the early maturity termination of investment portfolios by clients.
This week, Legal Guard managing director, Kgomotso Ratlhaga told BusinessWeek the business expected to bounce back. Ratlhaga said the reality is that "erosion was there because people were losing jobs due to retrenchment".
“We have suffered a bit but as for individuals that are able, we have not seen cancellation coming out of that segment,” she said in an interview.
During the pandemic, the MD said, they were propelled to execute their digital strategy which saw their website revamped.
“We realised that there is less interaction on our website which was contributed by the language that we used. "We realised that it was not simple; we started using simple language and added a library on the website which explains the legal jargon. We have a purchase portal which is accessible at any time,” she said of the agile solution move to seek a rebound in the market.
Meanwhile, the MD called on the industry to invest more in educating the public about the industry and its benefits noting that the penetration of their products locally is low. She said the latest statistics by Non-Bank Financial Institutions Regulatory Authority had revealed that the penetration of legal insurance in the local market is around 3.4 percent.
“This is quite low and it is upon us to start educating the whole nation and going to rural areas. We need to come up with strategies that will make our products simpler and appealing to locals,” she said.
Currently, Legal Guard has embarked on a national roadshow aimed at disseminating information about their products and services.
The MD said they have made strides in including the unbanked through a partnership with Orange Money which makes it easy for the unbanked to transact with them, adding that they are also exploring other options. Legal Guard has been in business for 18 years, specialising in legal insurance which is a short-term product that covers individuals, businesses, unions, SMMEs, and associations for general legal advice and litigation costs at the court level.
The company does contract drafting, sale and purchase agreements, change of marriage regime, as well as will drafting.
“Through our services, we want inclusion and to ensure every Motswana gets accessible insurance. "We have branches strategically located in Gaborone, Palapye, Francistown, Selebi-Phikwe, and Maun. "Our services can also be accessed through brokers and banks,” she said.
