A Business Insurance Product coupled with an Investment Policy Geared to Promote Sustainability of South African SMEs.
Date
2024
Authors
Journal Title
Journal ISSN
Volume Title
Publisher
University of the Witwatersrand, Johannesburg
Abstract
Traditional insurance companies need to develop the ability to create innovative digital products tailored to improving the financial health of Small and Medium-Sized Enterprises (SMEs) in order to keep up with changing economic and digital trends, adapt to a consumer-driven economy, and stay competitive in an industry that is shifting towards Insurtech (Svahn, 2017). The aim of this business venture is to investigate the feasibility and potential for creating a short-term product that facilitates cash injections into SMEs through an embedded investment policy solution. This paper examines how such a product can be formulated, implemented within an insurance company while remaining compliant with regulatory requirements.
The study, conducted through interviews with experienced professionals in the insurance industry, revealed that small and medium-sized enterprises (SMEs) require
significant support to grow and sustain their businesses. Commercial insurance is seen as a crucial factor in achieving this goal. However, the current offerings by short-term insurance providers need to be re-evaluated in order to better assist SMEs in dealing with unexpected setbacks such as theft, breakages, fires, floods, and strikes. It is essential for these offerings to provide cash assistance to help with ongoing business operations as well. The existing commercial insurance models have noticeable deficiencies that prevent the development of a comprehensive product that addresses both asset protection and financial assistance. These shortcomings are mainly attributed to regulatory hurdles, a lack of focus on customer value propositions, and revenue models that primarily benefit shareholders.
The Delphi technique was employed in order to get expert opinion and consensus on major challenges that arise in administering a dual product being offered for SMEs with the idea of helping them should a ‘rainy day’ occur or for expanding the operations of the business. Additionally, the professional had to outline how they envisage the specific features of this embedded product to look like and what the impact would be within the short-term insurance industry
Description
A business venture proposal submitted in partial fulfillment of the requirements for the degree of Master of Business Administration to the Faculty of Commerce, Law and Management, University of the Witwatersrand, Johannesburg
Keywords
On-demand insurance coverage, Business short term insurance, Insurtech, No Claims Bonus, FSCA, UCTD
Citation
Dube, Siphamandla Mbekekezeli. (2024). A Business Insurance Product coupled with an Investment Policy Geared to Promote Sustainability of South African SMEs.[Master’s dissertation, University of the Witwatersrand, Johannesburg].WireDSpace.https://hdl.handle.net/10539/43602