SelfSure, a new fintech in South Africa, has come up with a smart way to solve the problem faced by many car owners when they put in a claim after an accident. After paying premiums each month to cover their vehicles, consumers are often shocked at the thousands of rands they still need to pay to cover the excess.
The brainchild of an actuary, Proud Chitumba, SelfSure’s Excess Wallet ensures that you pay zero excess no matter the size of your claim while reducing your car insurance premiums without having to change your insurer.
Chitumba explains, “South African policyholders believe they pay too much on their car insurance premiums and don’t actively save to cover their excess. Policyholders often only feel rewarded from their insurance when they claim and are often stunned to find out that despite the high premiums they pay monthly, they still need to pay an excess for which they have not budgeted.
“In addition, insurance fraud is costing the short-term insurance industry between R3–R4 billion every year – that’s almost one in three claims being fraudulent and this makes insurance even more expensive. The industry needed an innovative way to help align the interests of the insurer and the insured so that both parties seek to reduce insurance risk and costs and that is what SelfSure has achieved.”
With the SelfSure Excess Wallet, you save towards covering your excess by converting a portion of your premium to savings. Once you reach the excess amount in your wallet, any additional money which you save is yours to spend as you wish. Should you have a claim before you have accumulated the excess amount, SelfSure will pay out the difference.
SelfSure has a calculator on its website that calculates the savings on your monthly premiums that you can achieve by self-insuring part of the risk.
Here’s an example: Thabo is currently paying R1 800 on his car insurance premium with an excess of R2000. Using the Excess Wallet, Thabo can increase his excess to R10 000. This will reduce his premium to R1 500 and he then allocates the saving of R300 every month into his Excess Wallet. With no claims, Thabo can accumulate R10 800 within 36 months in his Excess Wallet. If he has a car accident, he only needs to lodge the claim with his insurer and the excess will be covered by SelfSure using funds in Thabo’s Excess Wallet. If there are insufficient funds in the Excess Wallet, SelfSure credit will cover the balance.
The SelfSure Excess Wallet is available at a flat fee of R69 per month. Over time your savings will be substantial. In fact, if you saved the total excess amount you could further reduce your premiums.
Chitumba continues, “SelfSure benefits consumers and insurers. Our solution doesn’t threaten insurers, rather it reduces insurance fraud and costs and lowers risks. Consumers can expect to save around R3 600 annually, while retaining their cover and have the added benefit of having their excess instantly available when they claim. Insurers who come on board with SelfSure will make their current insurance offering more attractive and will be significantly differentiated from the rest of the market.”
SelfSure was awarded a grant in 2018 to develop its concept by AlphaCode. AlphaCode is the Rand Merchant Investments (RMI) incubation, acceleration, and investment initiative that identifies, partners, and grows early-stage financial service ventures.
Says Dominique Collett, head of AlphaCode, “We selected SelfSure for support as we can see the significant benefits of this offering for insurers and well as consumers. We look forward to seeing this InsurTech business grow significantly now that it has launched.”