i 

 

                                       

 

 

An insurance business for the uninsured in South Africa 

 

 

Victor Tshamano 

WITS Business School 

Student no.: 567174 

 

 

Thesis submitted in partial fulfilment for the degree of Master of 

Business Administration to the Faculty of Commerce, Law, and 

Managament, University of the Witwaterrand 

 

 

 

March 2022 

 

 



  ii 

 

ABSTRACT 

 

Insurance can be defined as a method by which interested members of a society 

band together and collect funds to pay potential losses that could suffered later by 

members of the group (Reavis, 2012). The main objective of this study was to 

determine the feasibility of an insurance scheme for the underprivileged. Following 

the example of previously conducted research studies in this field, the researcher 

adopted the mixed methods research approach and employed the case study 

research design for the purposes of the study. This research targeted a select 

geographical area, Kriel Town in Mpumalanga, wherein the employees of three 

ESKOM power stations located in the area were selected to be the population of 

the study. Questionnaires and interviews were used as data collection instruments 

for this purpose. 

Of the interviewed respondents who were contracted, there was a common 

challenge of not having permanent contracts, and with the risk of losing their job at 

any moment, they are not able to make stable decisions regarding their health 

insurance. Related, the permanently employed individuals noted that they did not 

earn enough money to allow them the luxury of having enough to join mainstream 

medical aids. Some common worries that came up centered on the poor services 

received from public health care centers 

On the basis of the findings of this study, the researcher can conclude that the 

proposed venture, AE Insurance has a good market for penetration, and that its 

value proposition is good enough to warrant the initiation of such a scheme. While 

the initial target of the venture would be the low-earning contracted workers of the 

power industry in Mpumalanga, this can be expanded upon first establishment and 

make ground towards the rest of South Africa, as this customer profile is prevalent 

through all provinces and the needs of the people are likely similar across the 

nation. 

 



  iii 

 

DECLARATION 

 

I, Victor Tshamano, declare that this research report is my own work except as 

indicated in the references and acknowledgements. It is submitted in partial 

fulfilment of the requirements for the degree of Master of Business Administration 

in the University of the Witwatersrand, Johannesburg. It has not been submitted 

before for any degree or examination in this or any other university. 

 

___________________________________________________ 

 

Victor Tshamano 

 

Signed at Emalahleni (Witbank) 

 

On the 28th of March, 2022 

CLASS MBA – ARP Research Proposal 

STUDENT # 567174 

STUDENT NAME & SURNAME Victor Tshamano 

COURSE CODE BUSA 7415A Business Venture Proposal 

COURSE ARP Research Proposal 

LECTURER 
Ms. Ayanda Magida 

Prof Anthony Stacey  

 

https://ulwazi.wits.ac.za/courses/19930/files/510293?wrap=1
https://ulwazi.wits.ac.za/courses/19930/files/510292?wrap=1


  iv 

 

ACKNOWLEDGEMENT 

 

This work is my dedication to all the people who have supported me through this 

journey of discovery. I wish to thank my late grandmother, Vho-Matamela 

Tshamano, whom I never had a chance to meet but whose narrated dedication to 

community service planted a seed that brought me to this juncture of wanting to 

use education to serve the people who are in need. 

 

I wish to express my indebtedness to my wife Tembeka, and our two girls, Orifha 

and Ronewa, for their unwavering support. To my mother, Mashudu Tshamano 

and my brother, Khumbudzo Tshamano, your support all these years has led me 

to this point in life and I would like to sincerely thank you. 

 

Lastly, my sincerest appreciation also goes to Lee Larbi, who took on the duty of 

supervising me throughout this study and provided guidance when I most needed 

it. 



  v 

 

SUPPLEMENTARY INFORMATION 

 

Supervisor Lee Larbi 

DUE DATE 28.03.20221 

WORD COUNT 17090 

PAGE COUNT  110 

  



  vi 

 

LIST OF TABLES 

 

Table 1: Celebrities insuring body parts (Acuna, 2012) ........................................ 2 

Table 2: Work type distribution across research participants ............................. 24 

Table 3: Biographical data of the online survey .................................................. 25 

Table 4: Structure of the interview ...................................................................... 26 

Table 5: South Africa Medical Aid Coverage (StatsSA, 2019) ............................ 32 

Table 6: South Africa Employment Data (Statssa, Quarterly Labour Force 

Survey, 2021)...................................................................................................... 34 

Table 7: AE Insurance PESTEL Analysis ........................................................... 36 

Table 8:  Industry Analysis ................................................................................. 44 

Table 9: AE Insurance SWOT Analysis .............................................................. 47 

Table 10: AE Insurance Business Model Canvas............................................... 48 

Table 11: AE Insurance estimated number of clients ......................................... 59 

Table 12: Distribution of how much customers are willing to pay ....................... 60 

Table 13: Estimated contributions by clientele ................................................... 61 

  



  vii 

 

LIST OF FIGURES 

Figure 1: Pascal Triangle (Haueter, 2017) ........................................................... 3 

Figure 2: Percentage of ethnic groups with health care insurance (StatsSA, 

2017) ..................................................................................................................... 5 

Figure 3: Cost comparison of research methodologies (Gaille, 2018) ............... 16 

Figure 4: Medical Aid Coverage in South Africa................................................. 34 

Figure 5: African Excellence Insurance Organizational Structure ...................... 57 

Figure 6: Graph depicting clientele intake .......................................................... 60 

  



  viii 

 

ACRONYMS AND ABBREVIATIONS 

 

CBI Community Based Insurance 

CBHI Community Based Health Insurance 

NB Net Benefit 

CMS 
Cooperative Medical System 

 



  ix 

 

 

TABLE OF CONTENTS 

 

ABSTRACT ........................................................................................................... ii 

DECLARATION ................................................................................................... iii 

ACKNOWLEDGEMENT ...................................................................................... iv 

SUPPLEMENTARY INFORMATION .................................................................... v 

LIST OF TABLES ................................................................................................. vi 

LIST OF FIGURES ............................................................................................. vii 

ACRONYMS AND ABBREVIATIONS .................................................................viii 

TABLE OF CONTENTS ....................................................................................... ix 

1. CHAPTER 1. INTRODUCTION ...................................................................... 1 

1.1. The history of insurance........................................................................... 1 

1.2. Community-based insurance ................................................................... 4 

1.3. Context of Study ...................................................................................... 4 

1.4. The Problem Statement ........................................................................... 6 

1.5. Purpose of Study ..................................................................................... 6 

1.6. Objectives of the study............................................................................. 7 

1.7. Research Question .................................................................................. 7 

1.8. Significance of Study ............................................................................... 7 

1.9. Assumptions ............................................................................................ 8 

1.10. Definition of Key Concepts ................................................................... 8 

Community-Based Insurance (CBI) .......................................................................... 8 



  x 

 

1.11. Preface to the research report .............................................................. 9 

2. CHAPTER 2. LITERATURE REVIEW .......................................................... 10 

2.1. Introduction ............................................................................................... 10 

2.2. Nepal ........................................................................................................ 10 

2.3. Senegal .................................................................................................... 11 

2.4. Ethiopia .................................................................................................... 11 

2.5. China ........................................................................................................ 11 

2.6. Rwanda .................................................................................................... 13 

2.7. Ecuador .................................................................................................... 13 

2.3. Conclusion ................................................................................................ 14 

3. CHAPTER 3. RESEARCH STRATEGY, DESIGN, PROCEDURE AND 

METHODs........................................................................................................... 15 

3.1. Research strategy .................................................................................... 15 

3.2. Dimension of the research ........................................................................ 16 

3.3. Research Design ...................................................................................... 16 

3.4. Population and Sampling.......................................................................... 17 

3.5. Research Instrument ................................................................................ 18 

3.6. Data Collection Procedure ........................................................................ 19 

3.7. Data Analysis and Interpretation .............................................................. 20 

3.8. Validity and Reliability............................................................................... 20 

3.9. Ethical considerations and unintended consequences of the research .... 21 

3.10 Limitations of the research ...................................................................... 22 

3.11. Conclusion .............................................................................................. 22 

4. CHAPTER 4. PRESENTATION OF RESEARCH RESULTS ....................... 23 



  xi 

 

4.1. Introduction ............................................................................................... 23 

4.2. Demographic profile of the population sample ......................................... 23 

4.2.1 Interview participants biographical data .................................................... 23 

4.4.1 Biographical data from the questionnaire participants .............................. 24 

4.3. Structure of the interview .......................................................................... 26 

4.4. Interview Results ...................................................................................... 27 

4.4.1 Uncovered themes ................................................................................... 27 

5. CHAPTER 5. BUSINESS VENTURE PROPOSAL ...................................... 30 

5.1. The vision ................................................................................................. 30 

5.2. The mission .............................................................................................. 30 

5.3. The values ................................................................................................ 30 

5.4. Business objectives ............................................................................... 30 

5.5. Services Rendered by AE Insurance ..................................................... 31 

5.6. AE Insurance Market Analysis ............................................................... 31 

5.7. AE Competitive Advantage .................................................................... 35 

5.8. AE Insurance Value Proposition ............................................................ 35 

5.9. Environmental Factors Analysis ............................................................. 36 

PESTEL Analysis ................................................................................................... 36 

5.10. Industry Analysis ................................................................................ 44 

5.11. Customer Analysis .............................................................................. 45 

5.11.1. Behavioral Analysis .................................................................................. 46 

5.11.2. Psychographic Analysis ........................................................................... 46 

5.11.3. Geographical Analysis ............................................................................. 46 

5.12. SWOT Analysis .................................................................................. 47 

5.13. Business Model Canvas ..................................................................... 48 



  xii 

 

5.14. Market strategy ................................................................................... 50 

5.14.1. Market segmentation ................................................................................ 50 

5.14.2. Target market ........................................................................................... 52 

5.14.3. Positioning ............................................................................................... 52 

5.14.4. Marketing’s 5Ps ....................................................................................... 52 

5.15. Operational Strategy ........................................................................... 54 

5.15.1. Key partner .............................................................................................. 54 

5.15.2. Key resources .......................................................................................... 55 

5.16. Key activities ....................................................................................... 55 

5.17. Organizational Strategy ...................................................................... 56 

5.18. Financial strategy ............................................................................... 58 

5.18.1. Revenue stream ....................................................................................... 58 

5.18.2. Cost structure ........................................................................................... 58 

5.18.3. Financial projections ................................................................................ 58 

5.19. Risk Assessment ................................................................................ 67 

5.20. Implementation plan ........................................................................... 68 

6. CHAPTER 6. SUMMARY, CONCLUSIONS, LIMITATIONS AND 

RECOMMENDATION ......................................................................................... 70 

6.1. Summary .................................................................................................. 70 

6.2. Conclusions .............................................................................................. 72 

6.3. Limitations ................................................................................................ 73 

6.4. Recommendation ................................................................................... 73 

6.4.1. Industry-related recommendations ........................................................... 73 

6.4.2. Recommendations for future research ..................................................... 74 

7. REFERENCES ............................................................................................. 75 

8. APPENDIX A: Draft Survey Guide ............................................................... 79 

8.4. Appendix B: Ethics Clearance Certificate ..................................................... 80 



  xiii 

 

8.5. Appendix C: Participants Information Sheet ................................................. 82 

8.6. Appendix D: Example of a filled consent form .............................................. 83 

8.7. Appendix D: Survey Questionnaire and Responses Distribution .................. 84 



  1 

 

 

 

1. CHAPTER 1. INTRODUCTION   

 

More generally, the aim of this study is to determine the feasibility of an insurance 

business based on the first principle of risk management and risk readiness, 

community-based insurance in the health sector. Section 1.1 introduces the history 

of insurance, considering how this industry has grown over time. Following this, 

Section 1.2 lays the foundation for community-based insurance, while the context 

and background for the study are outlined in Section 1.3. The problem statement 

that underpins this study is detailed in Section 1.4, with the preceding purpose of 

the study in this context outlined in Section 1.5. The objectives are presented in 

Section 1.6, followed by the assumptions made during the course of the study. The 

section is then concluded with a section on the definition of key concepts and a 

preface to the research report.  

 

1.1. The history of insurance 

The existence of insurance can be traced as far back as the 18th century. As noted 

by the researcher Haueter (2017), at that time, the development of insurance 

businesses was largely based on the systems of community and the intellectual 

capacity of those in the business. The calculative work, which in today’s times is 

conducted by actuarial scientists, has proven to be reliable over the years, seeing 

the industry continually grow on an upward trajectory – leading to it solidifying itself 

at the center of the world’s economy for years (Haueter, 2017). Trade and 

immigration between countries has also proven to be an influencing factor on the 

growth of the sector, with travelers insuring their properties to ensure they can 

recover them in case of any damages incurred in their absence. The industry has 



  2 

 

even evolved to the point of people (turned brands) insuring themselves. Some 

examples to this effect are Michael Flatley, an experienced dancer with the 

amazing ability of tapping his feet to the delight of his onlookers – he insured those 

very feet for €20 Million, an equivalent of R320 million in the current economy 

(Makan, 2019). 

There have been many other celebrities who have done body part insurance 

across various industries and countries, some citing very valid reasons for their 

choice. For example, upon his arrival in England, Cristiano Ronaldo quickly 

learned that football in England was different to what he was to in Portugal in that 

it was very physical. The player immediately expressed frustration at the ease at 

which one could easily incur an injury, and opted to insure himself in the event that 

he too was injured to the point of loss of salary (Acuna, 2012). Table 1 below 

summarizes a few known celebrities who have taken up body insurance, depicting 

the value of the insurance and the organ(s) insured.  

Table 1: Celebrities insuring body parts (Acuna, 2012) 

Celebrity Body 

Part 

Value 

Bette Davis Waist $28 000 (equivalent to R251 235,60) 

Rihanna Legs  $1 000 000 (equivalent to R8 972 700) 

Daniel Craig Full body $9 500 000 (equivalent to R85, 240 650) 

David Beckham Legs $70 000 000 (equivalent to R628 089 000) 

Jennifer Lopez Bums $320 000 000 (equivalent to R2871 264 000) 

 

Haueter (2017) has presented that in earlier years, insurance was a frowned upon 

concept as the general public mostly relied on their spirituality as a medium of 



  3 

 

safety. While this still remains true for some communities, prayer was used for 

protection against any kind of risk ranging from health, accidents, criminal, and 

even death. This then led to the widely believed notion that all materialized risk 

was simply ‘meant to be’. The researcher further posits that in those ages, risk was 

not seen as anything that could be prevented, which then led to the adopted 

approach of accepting the born consequences and learning to live with them 

instead of fighting the unseen spiritual realm, which was believed to the source of 

all that occurred in the physical (Haueter, 2017).  

While managing to penetrate a lot of the superstitions, the insurance industry has 

also suffered through major financial losses at the hands of unforeseen 

catastrophes (Haueter, 2017). These catastrophes include world wars and terrorist 

attacks, which all end in large claims being made against insuring houses. The fact 

that the industry remains standing today is testament to its robust and resilient 

fabric, which can also be indicative of the human nature to always desire to shift 

risk where possible. 

A Swiss mathematician by the name of Jacob Bernoulli has been lauded as one of 

the biggest contributors to the field of Actuarial Sciences, having used the Blaise 

Pascal’s triangle of mathematics shown in Figure 1 below to estimate insurance 

losses. This method, utilizing the Pascal’s triangle approach, has remained the 

foundation with which a majority of insurance houses build their models on to date. 

 

Figure 1: Pascal Triangle (Haueter, 2017) 



  4 

 

1.2. Community-based insurance 

Insurance can be defined as a method by which interested members of a society 

band together and collect funds to pay potential losses that could suffered later by 

members of the group (Reavis, 2012). This is the first principle of insurance and is 

the very definition from which this study was founded. From its inception, insurance 

was meant to work as a community-based risk management process. To date, a 

lot of the insurance business models are opportunistic ventures that benefit only 

one end of the party, exploiting the vulnerable and failing to address the cares of 

their exposure to identified risks. The World Health Organisation has identified the 

following key facts associated with Community-Based Health Insurance (CBHI) 

(World Health Organisation, 2020): 

• Community-based insurance schemes are usually voluntary and 

characterized by community members pooling funds to offset the cost of 

healthcare. 

• Despite much hope in these systems, evidence suggests that the impact of 

the CBHI on financial protection and the access to needed health care are 

moderate for those enrolled. 

• Most CBHI schemes have low participation levels and the poorest people 

usually remain excluded. 

• Theory and practice show that CBHIs play only a limited role in helping 

countries move towards Universal Health Care (UHC) targets. 

• CBHI have been found to have other positive influences, such as 

community development and the increased local accountability of health 

care providers. 

1.3. Context of Study 

There are a variety of risks that people seek financial protection or financial 

readiness for. The insurance industry has over the years categorised risks, with 

different insurance companies choosing to specialise in some of the identified risks 



  5 

 

listed: life cover, medical aid, vehicle insurance, household insurance, and so 

much more. South Africa is home to multiple insurances houses, with each of these 

focusing one or more of the listed risks, offering coverages at stipulated premiums 

(StatsSA, 2019).  

Based on the survey conducted in 2017 by StatsSA, only 16.4% of South Africans 

had health care coverage through medical aid, while the black population was 

reported as having the lowest coverage ratio at 10.1% (Statistcis South Africa, 

2017). This has been one of the biggest contributors to the pandemic of 

overcrowded hospitals and the subsequent lack of service delivery in public health 

care facilities. Figure 2 shows the full breakdown of health care coverage by ethnic 

groups. 

 

Figure 2: Percentage of ethnic groups with health care insurance (StatsSA, 
2017) 

 

Data released by Hippo ZA in 2017 presented that while there are 11.4 million 

registered vehicles in South Africa, a staggering 65 – 70% of this number is 

uninsured (Hippo, 2017). These numbers reveal that South Africans experience 

specific limitations that make carrying the risk incurred from their vehicles on their 

own backs a more favourable option that enlisting and paying for an insurance 

package to this regard. Though the study’s target population is not only the 

uninsured in the society, its envisaged outcome will definitely provide relief for both 



  6 

 

the uninsured and insured groups; particularly those who find it difficult to keep up 

with monthly premiums in the health sector. 

1.4. The Problem Statement 

South Africa continues to face a big health system crisis, wherein a large majority 

of the country, particularly specific ethnic and economic groups, live outside 

access to affordable and adequate health care services. Due to affordability 

limitations, most in this identified group are without health insurance because of 

the high premiums needed for such programs. 

Additional to the personal affordability issues, South African health care facilities 

have also reached capacity (Rensburg, 2021), and often have to serve more 

people than they can manage. This overburdening of the health care centers has 

led to major deterioration of these facilities, inherently lowering their ability to offer 

quality health care services. This has resulted in notable health care inequalities 

in the country, with the majority of people living without access to care and 

awareness of their own medical conditions. This blind living then leads to them 

only finding out of their conditions when they are critically ill, adding strain to the 

already stretched medical care facilities. These factors combine to demoralize 

staff, often leading to poor customer service and general unsatisfactory client 

tending, a situation that is not good for anyone. On the other end of the spectrum, 

the country also has a parallel group, that is enjoying the best of health care 

services due to their ability to afford whatsoever they require. This further increases 

the divide, making health care more and more expensive, wherein the best 

services are only accessible to specific privileged groups. As a result, this study 

seeks to bridge this gap, making private health care affordable by proposing a 

model for insurance for South Africans.  

1.5. Purpose of Study 

The purpose of this study is to determine the feasibility of an insurance business 

based on the first principle of risk management and risk readiness.  The 



  7 

 

geographical coverage of this insurance business is South Africa. Upon such a 

determination, the study will further propose a business model to set up such an 

entity.  

This study is motivated by the need to alleviate the national health crisis currently 

in existence in South Africa. According to Rensburg (2021), South Africa’s health 

care facilities are underfunded while they remain servicing a majority of the 

population at 71%. The study therefore seeks to address the challenges faced by 

the majority of people in South Africa who remain uninsured, by proposing an 

affordable health care insurance that would see them access better health care 

services to tend to their needs.  

1.6. Objectives of the study 

On the basis of the purposes outlined above, the main objective of this study is to 

determine the feasibility of an insurance scheme for the underprivileged. For the 

purposes of this particular study, the researcher has modeled a customer profile 

of contracted employees who would not normally afford health insurance 

premiums on their currently salary, thus making them the target for such a venture.  

The study aims to uncover the feasibility and durability of such a business model, 

uncovering the intricacies that would be involved in launching such a product to 

the stipulated customer group in South Africa.  

1.7. Research Question 

On the back of the outlined purpose and objective of the study, the primary 

research question that will govern the direction of the study is as follows: 

RQ: Is the underprivileged community in South Africa willing to engage in a CBI 

scheme to cater for their health? 

1.8. Significance of Study 

Unaffordability and capacity constraints has led the country’s health care system 

to a place of strain, and all interventions are needed before the country 



  8 

 

experiences a collapse in this sector, to the detriment of the vast majority. This 

study therefore aims to address the issue of unaffordable health care services 

through the possible provision of affordable health insurance premiums to the 

underprivileged working force.  

1.9. Assumptions 

The author of this study has made the following assumptions, which are critical in 

reaching conclusion to the study: 

• Participants of the study will be honest in their responses to survey 

questionnaire. 

• The population covered during the survey will be a fair representation of the 

total population of the country. 

• Data gathered through this research will be relevant to the current means 

of insurance. 

• The targeted survey respondents understand the concept of insurance and 

therefore their participation will be relevant and useful in determining an 

outcome. 

1.10. Definition of Key Concepts 

Community-Based Insurance (CBI) 

According to Donfouet and Mahieu (2012), Community-Based Insurance is a 

system of financial protection put together with the focus of assisting the 

underprivileged with access to good, quality health care. This specific group makes 

for people who would otherwise not afford the mainstream insurance premiums 

often used by the middle-class and the rich.  

 



  9 

 

1.11. Preface to the research report 

To this end, the report has six chapters. Following this introductory chapter, 

Chapter 2 provides a literature review covering the problem, past studies, the 

explanatory framework and the conceptual framework of the study undertaken. 

Chapter 3 discusses the research strategy, design, procedures, reliability and 

validity measures, as well as the limitations of the study. Chapter 4 and 5 

respectively present and discusses the findings, to interrogate the research 

questions, while Chapter 6 summarizes and concludes the research study. 

 

 

 

 

 

  



  10 

 

2. CHAPTER 2. LITERATURE REVIEW 

 

This chapter has one main objective, to present the literature findings of similar 

implementations of community-based insurance schemes in countries identified to 

have economic or structural similarities to South Africa: Nepal, Senegal, Ethiopia, 

China, Rwanda, and Ecuador. It focuses on work previously done in this space of 

community-based insurance, setting a foundation for the feasibility study of the 

insurance venture detailed in later chapters. 

2.1. Introduction 

In countries that are generally poor, communities are more and more moving 

towards community-based insurances (CBI).  This is a strategy that has the 

potential to improve healthcare in poor communities (Gnawali & Pokhrel, 2019). 

2.2. Nepal 

According to Fadlallah (2018), community-based insurance refers to an insurance 

option put together by a community of people whose main purpose is to address 

the risk that may occur in a particular area to those participating in the scheme. 

This has largely been focused on health-related risk and aimed at developing a 

scheme that would allow the underprivileged to access quality health care services 

like the middle class and rich have. Where members of communities are unable to 

afford premiums that give them access to quality healthcare and where 

governments do not provide such subsidies sees those in the bottom of the food 

chain suffer the most (Fadlallah, 2018). 

According to Giri, Regmi, and Subedi (2008), over 25% of Nepal’s population lived 

in adverse poverty. The researchers further note that approximately 40% of the 

health care coverage is paid for by the country’s taxpayers, while 60% is catered 

for through expensive and exclusive medical schemes. The country seems to have 

given into the poor state of the public health system and have opted to paying 



  11 

 

exuberant fees out of their own pockets to access private and quality health care 

services. As can be expected, some in the country have delayed attending to their 

health needs due to the lack of funds to this nature.  Giri, Regmi, and Subedi (2008) 

subsequently came to a conclusion that if community-based insurance is 

implemented with greater diligence, there is great potential to improve the health 

care system in the country. 

2.3. Senegal 

In Senegal, researchers Ouimet, Fournier, Diop, and Haddad (2007) conducted a 

study in order to dissect and understand how CBIs have positive contributions to 

the community or to the people who signed up for them.  The outcomes of the 

study would be used to interrogate the value of becoming a member of such a 

scheme. The researchers then indicated that that there is a need to minimise or 

close the promoter vs subscriber relationship. 

2.4. Ethiopia 

In Ethiopia, researchers focused their attention on the probability of people joining 

a CBI initiative in the country. The Ethiopian study revealed that 38% of the health 

fees being paid in the country were extremely high, a ratio much higher than the 

rest of the African countries, that averaged at 30%  (Haile, Ololo, & Megersa, 

2014). These high fees contribute to many people not seeking and getting 

professional medical care when injured or sick. The researchers came to the 

conclusion that when these kinds of schemes are adopted at a district level, the 

community members will most likely be willing to join, with more families and 

farmers also being willing to join. 

 

2.5. China 

The Chinese people’s history of CBHI dates bake to the late 1970s. The system in 

China was implemented as the Cooperative Medical System (CMS). In its form 

and working principle, the CMS was similar to CBHI, in that the target was 



  12 

 

households in poor communities and farmers. The Chinese’s version of CBHI has 

gone through its own cycles of progression. When land policies resulted in land 

ownership changes, the Chinese farming community was left with no choice but to 

live their lives without any financial coverage for health eventualities. The change 

in land policies meant that the farm owners, who previously leased a piece of land 

together, were required to have individual lease agreements. This then meant that 

land-use was more expensive. Some farmers found themselves sacrificing the 

health insurance to be able to continue farming. This saw a dramatic decrease in 

health insurance uptake in the farming community.  

Many farmers and members of the poor rural villages of China eventually lost their 

valuable means of production due to ill health, wherein they find themselves with 

an ailing family member who they need to look after. Without health insurance, 

they resort to selling their seeds which were meant for the next season and some 

would even sell their properties in order to pay for their medical bills or those of 

their loved ones. In the 1990s, having seen a major decline in the health of 

members of these communities, the Chinese government tried to entice the poor 

farming communities into the use of CBIs. This was done through subsidies for 

those who would choose to join the CBIs, but the scheme remained voluntary. 

 

In an analysis, Wang (2005) found that regardless of the excessively low monthly 

premium of the CBI, the under privileged still did not exploit the benefits brought 

about by the introduction of CBI. This extends to the farmers who the government 

was hoping will be the greater participants of the scheme. This is regardless of the 

fact that they remain at risk of receiving poor health care when they fall sick is that 

much greater. The researcher suggested that in order to encourage participation 

by the underprivileged, the government needs to move their subsidy to areas 

where this group was densely populated.  



  13 

 

2.6. Rwanda 

In Rwanda, a group of scholars conducted a study aimed at determining the factors 

affecting the low turnout in enrolment of the CBHI. Rwanda followed a system 

called the “Ubudehe system”. In this system, the government subsidized the 

payment for the first category of members. The rest of the category of members 

were subsidised at a different amount according to their ranking in the category 

system. The government’s involvement in the driving the CBHI has been vital. In 

Rwanda, the government drives CBHI and it is integrated into the ministry of 

Rwanda Social Security Board, having been moved in 2005 from the Ministry of 

Health. Rwanda aims to use the CBHI to provide universal health care to 

Rwandans.  

In their study, Mecthilde and Mukangendo (2018), concluded that the noncompliant 

nature of the people was due to their frustrations with hospital or medical facilities’ 

long ques. People also find the cost of the system to be too much for them. The 

method of collecting funds for the whole family also plays a role as one may not 

be able to afford putting of the people in the family in the scheme. These 

highlighted factors contribute highly to low adherence to the CBHI scheme. The 

researchers further recommend that the system be reviewed in the interest of the 

poor. The premiums should be setup in such a way that the rich get premiums 

calculated based on their earnings and so will the underprivileged. This is similar 

to China, wherein the rich, in a way, subsidize the poor.  

 

2.7. Ecuador 

An Ecuadorian study was embarked on to determine the feasibility of communities’ 

willingness to join a CBHI/CBI. This study went on to determine if the community 

understands the CBI system, as well as asses their attitude towards the system. 

The study focused on a village set-up. 



  14 

 

Eckhardt, Forsberg, Wolf, and Crespo-Burgos (2010), concluded that the general 

population is very much on the same boat when it comes to joining the health 

insurance. Factors that could win the population’s heart are also very similar. 

Majority of the people are positive towards the CBI and would join with ease if 

encouraged to. The researchers also presented that policy positions always play 

a role in determining participation. If reforms are introduced and they work on 

factors like subsidies for the qualifying, and deal with the possible of exploitation 

by the rich – this is a system that could potentially work in the country. 

2.3. Conclusion  

This section considered the different uptakes of CBIs in different African countries. 

The insurance system of CBIs is one that is being explored in many countries of 

the world. From the different considerations outlined above, government policies 

are essential to getting the activity of CBIs going and to promote the uptake from 

the relevant communities. The following section outlines the study’s research 

methodologies. 

  



  15 

 

3. CHAPTER 3. RESEARCH STRATEGY, DESIGN, 

PROCEDURE AND METHODs 

 

This chapter aims to identify and describe the research strategy, dimensions and 

design, the population of the research, the sampling procedure and data collection 

and analysis methods that will be employed in order to collect, process, and 

analyse the empirical evidence. This will all build towards the aim of answering the 

overarching research question presented in section 1.7 above.   

3.1. Research strategy 

Insurance forms a major part of human financial risk management. In order to fulfil 

the objectives of the research, this study will develop a method that will allow for 

the determination of the viability of the venture. Following the example of previously 

conducted research studies in this field, the researcher will adopt the mixed 

methods approach, which is a combination of both the quantitative and qualitative 

approaches for the fulfillment of the research. The quantitative methods will be 

used to gather the demographic data, while the qualitative approach will be used 

to uncover themes in line with the objectives in the study. 

According to VandenBos (2007), the qualitative research approach is mostly 

utilized for studies that aim to uncover the participants’ understanding of a topic 

without limiting these themes to predetermined numeric propellants. The opinions 

of the participants are uncovered through use of one-on-one interviews, group 

interviews, behavioral observations, and so much more. This approach is also 

sufficient for highlighting internal attitudes that participants may have toward the 

subject matter, touching on what people have personally experienced and allows 

for flexibility in responding to questions. With the ability to get sufficient data with 

small sample, qualitative research method is particularly cheap, as can be seen 

on Figure 3 below.  

 



  16 

 

 

Figure 3: Cost comparison of research methodologies (Gaille, 2018) 

  

On the other hand, quantitative research is defined to be a research strategy more 

reliant on using predefined figure with predefined variations. It involves the analysis 

of such data and comparison of the outcomes. For this specific approach, data is 

often gathered through surveys and experiments. 

3.2. Dimension of the research 

The research will aim to uncover the following dimensions in the determination of 

the feasibility of the proposed business venture: 

• Economic: This dimension focuses on the current expenditure that an 

individual or household spends on their current risk mitigation risks. 

• Technical: This focuses primarily on the perceived level of current services 

received 

• Social: Willingness to join CBI, this will be trying to establish the 

community’s appetite to joining CBI. 

3.3. Research Design 

A research design is described as the plan through which the researcher 

communicates the chosen approach to be applied in the study. Through the 



  17 

 

research design, the researcher is able to specify and justify the adoption of a data 

collection tool and the selection of a sample population for his study (Kumar, 2018).  

In his research, Bryman (2012) listed five generic research designs, namely: cross-

sectional, longitudinal, case study, comparative and experimental. The researcher 

chose the case study research design for the sake of this feasibility study.  Defined 

by Yin (1984, p. 23) as “an empirical inquiry that investigates a contemporary 

phenomenon within its real-life context; when the boundaries between 

phenomenon and context are not clearly evident; and in which multiple sources of 

evidence are used”, the case study presented itself as the most relevant choice for 

the purposes of the research. The researcher will be considering the success of a 

business venture in context, and will need to investigate this within a real-life 

context to uncover all the intricacies that could be involved with the running of such 

a business. This particular approach works best when the researcher aims to 

closely examine data in a specific closed setting, limiting the geographical area 

and subjects of the study (Zainal, 2017).  This research targeted a select 

geographical area, Kriel Town in Mpumalanga, wherein the employees of three 

ESKOM power stations located in the area were selected to be the population of 

the study.  

3.4. Population and Sampling 

This research targeted a select geographical area, Kriel Town in Mpumalanga, 

wherein the contracted employees of three ESKOM power stations located in the 

area were selected to be the population of the study. The researcher will then 

sample based on the scope of the study, which is to determine the willingness of 

the low-earning working class to uptake a health insurance scheme for which they 

would pay monthly premiums. 

The choice of sampling technique depends on whether or not one can obtain a 

complete list of the population (sampling frame), the research question and 

objectives (Bryman, 2012). In this study, the strategy will be to pick respondents 

who are deemed to be the most relevant beneficiaries of a CBI. According to 



  18 

 

Solutions (2020), finding a potential participant who has experience with the 

phenomenon and is willing to share their thoughts is at the heart of a proposed 

study. As a result, and due to the nature of the study, a homogenous sampling 

technique will be employed to determine the sample to be used. According to 

Etikan (2015), homogeneous sampling is form of sampling that focuses on a group 

of people or phenomena with similar particular characteristics.  

The study intends to take a sample of 10% of the un-insured workforce of 

contracting companies within three Eskom Power stations. The target companies 

are those with a minimum of three-year contracts. These employees will be 

contacted through their employers and permissions will be sought and declarations 

will be made. Together with the questionnaire, an introductory letter will be drawn 

up which seeks to clarify to the respondents the purpose of the questionnaire. The 

letter will also provide surety that their personal information will not be used for any 

purpose other than the study.  

3.5. Research Instrument 

The first instrument to be utilised is the research questionnaire, and the research 

interview is the second. The format of the questionnaire will be as follows: 

• The research questionnaire will start with an introduction about the 

researcher. 

• Then it will give background into the subject being researched and giving 

clarity why the respondent has been selected for the research. 

• Then it will give background into the importance of the research. 

• It will state the expected benefits of the research 

• The researcher will then provide surety of confidentiality 

• Inform the respondent that they may now carry on to respond to question in 

the questionnaire.  

 



  19 

 

3.6. Data Collection Procedure 

The research data collection process consisted of the following modes: structured 

surveys, semi-structured one-on-one interviews, document analysis and a 

literature review. A two-phased interview process was conducted for the data 

collection, starting with one-on-one interviews with seven parents followed by two 

focus groups consisting of a minimum of five participants each. 

The questionnaire was developed using a structured qualitative research 

approach. The individual/group data collection process with participants of the 

research was contacted in the multi-stage approach. 

a) Stage 1 

i. The researcher first engaged the targeted company’s management 

to seek approval to conduct research with their employees – this is 

to get buy-in and support. 

ii. The employer was request to use their tool box talks meetings 

(morning task distribution/assignment) to share the intended 

research with the employees 

 

b) Stage 2 

i. Send out, via the employer’s email, information sheet and consent 

form for the employees who are targeted to participate in the 

process.  

 

c) Stage 3 

i. A series of meetings, with the assistance of an employer was setup 

to enable one on one and group interview with the research 

participants. 

ii. Upon informing them, send them a list of questionnaires via SMS or 

WhatsApp for them to conduct an online survey. 

iii. Conduct the survey and await results. 



  20 

 

d) Stage 4 

i. Register with Qualtrics to conduct an online interview to gather 

information that could be asked to a wider public to determine the 

view of the public as far as insurance business for the uninsured is 

concerned.  

e) Stage 5 

i. Analyze and interpret the data received.  

3.7. Data Analysis and Interpretation 

Data from the research was immediately analyzed as it was being received in a 

meaningful way. The continuous checking of data as it is received will give the 

researcher a chance to identify areas of improvement in the data collection and 

such can be promptly dealt with.  

3.8. Validity and Reliability 

Right at the of offset of the research, Noble (2015) states that evaluating the quality 

of research is essential if the findings are to be utilised in practice and incorporated 

into care delivery. The intention of this study is to establish if it feasible to establish 

a Community Based Insurance. It would be futile if the research is based on 

falsehood as the outcome should be an implementable proposal based on 

research conducted. 

According to Mohajan (2017), it is of critical importance to ensure reliability and 

validity of any research work. This is achievable by using reliable research 

instruments. Validity is defined as a means of determining what instrument is used 

for research work and the accuracy with which the instrument does the research 

(Mohajan, 2017). The researcher further defines reliability as the amount of trust 

one can put on the instrument utilised for the survey. The reliability and validity of 

research is critical in decision making process. It would a fatal flaw to use data in 

critical decision-making process while that data is either wrongly obtained. Wrong 

data can be obtained, not as an intent of the researcher but by an omission to 



  21 

 

conduct proper checks and balances when collecting such data. Roberts and 

Priest (2006), have done an excellent job in assisting researchers to stay away 

from such risk by determining that, for research to be deemed dependable, a few 

factors need have been taken into consideration during the research. These 

includes but are not limited to: 

• The research questionnaire 

• The way in which data is collected 

• People or sector from who/which data is collected from (this deals with 

relevance) 

• The process of analysing collected data  

• What conclusions the researcher makes out of the data. 

When the above have been thoroughly achieved, the research questionnaire for 

example may be utilised in determining the accuracy of the data. 

3.9. Ethical considerations and unintended consequences of the research 

The intention is to have some form of declaration wherein the researcher will state 

in declaratory terms that the information gathered during the research including 

personal details of the respondents will be treated with confidentiality. The 

information gathered during the research will be used for the research purposes 

and will not be shared with their employers. 

 

In order to receive the Clearance Certificate from the Wits Business School Ethics 

Committee, constituted under the University Human Research Ethics Committee 

(Non-Medical), the researcher was required to undergo a rigorous process of 

checks and balances. This included identifying potential participants to the 

research, issuing them with an information sheet in order to solicit their consent to 

participate in the research. 



  22 

 

The researcher was subsequently issued with an Ethics Clearance Certificate 

(WBS/BA567174/794) on the 9th of February 2022. This, in line with the research 

is a non-medical certificate. See Appendix B for the Ethics Clearance Certificate. 

3.10 Limitations of the research 

In this section, the researcher looks at the weakness of research. The methodology 

adopted for this study is a qualitative approach. In line with the methodology, the 

weaknesses dealt with here will be more in line with qualitative approach. Choy 

(2014) states that in qualitative approach, the researcher takes an introspection 

approach and work on determining their past experience from societal view.  

3.11. Conclusion 

The envisaged outcome of this chapter was for the reader to get understanding of 

the method used to conduct the research. Though the research method of choice 

and relevance was qualitative research, it became apparent that a mixed method 

of both the quantitative and qualitative methods would need to be adopted as a 

hybrid methodology became necessary to reach a conclusive view of term of the 

proposed venture initiative. For data or information gathering, the approach was to 

use interviews in which a sample was selected based on the group of work that 

they do – low-income contract worker. The reason for this group of employment 

(low-income contract worker) is that they would normally choose to not have 

medical insurance or medical aid due to inability to afford.  

 

  



  23 

 

4. CHAPTER 4. PRESENTATION OF RESEARCH 

RESULTS 

4.1. Introduction 

This chapter focuses its attention on laying out the outcome of the conducted 

research. In this chapter, the findings from the circulated survey and conducted 

interviews will be presented, uncovering how the participants of this research study 

responded to the questions and how each of these answer the overarching 

research question presented in section 1.7, ‘Is the underprivileged community in 

South Africa willing to engage in a CBI scheme to cater for their health and property 

protection needs?’  

4.2. Demographic profile of the population sample 

The following section will detail all the descriptive information collected on the 

research participants, which could further paint light on the context of their later 

interview responses. 

4.2.1 Interview participants biographical data  

The sample population for the interviews consisted of 15 contracted individuals at 

three different ESKOM power stations, all from the same sector of employment – 

the heavy steel industry. The interview was conducted in two different formats; 

wherein the first five respondents were interviewed in a one-on-one set-up. The 

remainder of the participants were interviewed in two groups of five each.  This 

interview group was made of two females and 13 males. This began to show that 

the team lacked diversity in terms of gender, race and nationality; as all the 

interviewed participants were also black and South African. Their academic 

background was spread between Grade 12 and technical and administration 

diplomas.  

 

 



  24 

 

Their type of work in the industry was spread is as below: 

Table 2: Work type distribution across research participants 

Skill Quantity 

Safety - Fire watcher 2 

Store keeper 3 

Skilled Trade (Fitter, Welder) 8 

Semi-skilled 2 

4.4.1 Biographical data from the questionnaire participants 

The following biographical data was collected on the participants who participated 

in the sent-out survey. The survey was developed through a Qualtrics online 

survey tool and was sent through WhatsApp as the medium of communication to 

124 respondents indiscriminately. The respondents were encouraged to send the 

survey to more respondents where possible. A total of 62 responses were 

received, and the biographical profile of the respondents is detailed below. 

 

 

 

 

 

 

 

 

 



  25 

 

Table 3: Biographical data of the online survey 

Gender No. Percentage   Marital Status No. Percentage 

Male 29 50%   Single 25 44% 

Female 26 45%   Married 28 49% 

Non-binary/Third 

gender 0 0%   Divorced 3 5% 

Prefer not to say 3 5%   Widowed 1 2% 

Age No. Percentage   Education No. Percentage 

20 to 30 7 13%   No matric 1 2% 

31 to 45 39 74%   Matric 15 27% 

46 to 60 6 11%   Undergraduate 18 32% 

+60 1 2%   Post graduate 22 39% 

Ethnicity  No. Percentage    Children  No. Percentage  

African 54 95%   0 9 16% 

Indian 0 0%   1 9 16% 

White 1 2%   2 to 3 37 65% 

Coloured 1 2%   4 to 5 1 2% 

Prefer not to say 1 2%   6+ 1 2% 

Income No. Percentage         

0 to 10 000 9 16%         

10 001 to 20 000 15 26%         

20 001 to 30 000 5 9%         

30 001 to 40 000 5 9%         

40 001 to 50 000 9 16%         

50 001 to 60 000 4 7%         

60 001 to 70 000 4 7%         

+70 000 6 11%     
 

  

 



  26 

 

This data is critical in determining the market that will be interested in the product 

offering. The split between the married and single is very close. Over 70 percent 

of the survey respondents have a diploma or post graduate study. This may 

suggest that from the surveyed individuals, there will be a higher expectation of 

higher quality service. Additionally, according to Dürr (2013), individuals earning 

between R22 000 to R70 000 make up the South African middle class. That 

suggests that around 58% of the respondents are in the middle class. This group 

can join any medical aid. The remaining 42%, should they wish to join, they may 

go for a low-cost medical aid.  

4.3. Structure of the interview  

The structure of the interview conducted with the 15 participants is shown below. 

Table 4: Structure of the interview  

 

Section Questions Probes Rational 

Introduction - Introduction of the researcher to the 

interviewee/respondent. 

- Introduction of the research topic. 

- Informing researcher of the approval 

and show them the Ethics Clearance 

certificate from Wits University 

Human Research Ethics Committee 

(Non-Medical) 

- Ask biographical information from 

the interviewee(s)   

Biographical - Provide understanding 

of the topic under 

research. 

- Provide a sense of 

confidentiality.  



  27 

 

Personal view of 

low-cost medical 

aid 

- Establish reasons why they don’t 

have medical aid. 

- Establish their willingness/desire to 

join a low-cost medical aid.  

Personal 

views 

- Provide opinion on low-

cost medical aid.  

Opinion of health 

care 

- Personal, family or friend’s 

experience of public health care 

facilities. 

Personal 

views 

- Provide opinion of the 

health care 

 

4.4. Interview Results 

Data for this study was collected in two phases: through the circulated interviews 

and conducted interview. From the interviews, certain pertains/themes were 

identified. From the survey, Qualtrics was utilized and respondents independently 

received questions with their identities not required.  The below section will detail 

the results attained from the interviews in section 4.4.1 and the results from the 

surveys in section 4.4.2. 

4.4.1 Uncovered themes 

From the conducted interviews, the following themes were uncovered: 

4.4.1.1. Financial constraints 

As much as insurance has been available for centuries, there are many who still 

have no access to this insurance, for various reasons. Of the interviewed 

respondents who were contracted, there was a common challenge of not having 

permanent contracts, and with the risk of losing their job at any moment, they are 

not able to make stable decisions regarding their health insurance. There is also 

the additional risk of losing the benefits once they fail to pay their premiums. 

Related, the permanently employed individuals noted that they did not earn 



  28 

 

enough money to allow them the luxury of having enough to join mainstream 

medical aids. 

4.4.1.2. Poor medical health services 

Of all the interviewed candidates, there was a clear understanding that should they 

get sick or be injured, they risk receiving delayed medical help at public hospital; a 

fear they now live with on a daily basis. Some common worries that came up from 

the interviews are that government ambulances take too long to fetch sick 

individuals; some have even witnessed friends being left in accident scenes due 

to not being on medical aid schemes; and lastly, the nurses and doctors at public 

health facilities do not offer the best of care services. Some of the narrated horrific 

experiences from the interviews are detailed below. 

- Interviewee no.1 narrated a story of a friend who was involved in a motor bike 

accident. The individual was admitted to a public hospital. There were no doctors 

to administer critical emergency medical response. By the time the doctors 

attended to him, his leg was no longer functioning. He had to be amputated.  

- Interviewee no.2 narrated a story of an individual was also injured in a road 

accident. His leg was broken in four places. He was taken by an ambulance to a 

private hospital. Upon arrival, he was stabilized and the doctors were getting ready 

to have him transferred to public hospital. He did not want to go to a public hospital. 

He was asked to make an upfront payment of R90 000 in order to continue being 

attended to in the private hospital. 

- Interviewee no.3 narrated a story of his two sisters (17 years old and 22 years 

old) who were in an accident. The 17-year old was still in her father’s medical aid. 

The 21-year old was out of medical aid due to age. The younger sister went to 

private hospital with facial injuries and older sister went to public with similar 

injuries. The younger sister was fully healed without any facial scars. The older 

sister lives with severe scars on her face. 

 



  29 

 

4.4.1.3. Key desires regarding health care insurance 

The key themes that came under what the participants wanted the most from 

health care insurance are listed below: 

− Access to private health facility accidents.  

− Access to private hospitals for child birth/delivery.  

− Access to private hospitals when under severe illness and in need for 

stabilization. 

 

 

 

 

 

 

 

 

 

 

 

 

 

  



  30 

 

5. CHAPTER 5. BUSINESS VENTURE PROPOSAL 

The following chapter outlines the fundamental areas for consideration in the 

feasibility study of the proposed business venture. 

5.1. The vision  

In their efforts to illustrate the importance of the mission and vision, Walt and Fourie 

(2004), indicated that for any business to develop a strategic plan, it is important 

that these be developed and understood. Their formulation requires time. This is 

because this foundation lays the direction for how the business will be run and 

represented.  

The business has been given the following name: African Excellence Insurance – 

AE Insurance (AEI). AEI aims to be known and associated with excellent health 

services that it provides and a most affordable cost. 

Vision: To make quality health care accessible to all 

5.2. The mission 

AEI provides insurance services for low-income workers, self-employed and 

anyone else who wishes to take insurance at low cost – after all this is insurance 

for the uninsured in South Africa. This is meant to be a form of insurance that 

ensures that all can have access to quality health care at the most critical medical 

emergency times.  

5.3. The values 

AEI has a set of values that it endeavors to abide by: caring, reliable, transparent, 

integrity, and continuous improvement. 

5.4. Business objectives 

AE Insurance has a set of business objectives that are focused on serving any 

South African who knows and understands the need for medical insurance but 

have stayed uninsured due to affordability constraints or the view that conventional 



  31 

 

medical insurance is not an option best suited for them. It is from this foundation 

that the objectives of AEI were derived: 

− Make medical insurance accessible to all who need it. 

− Create an opportunity for the uninsured to access private health care at 

low cost at the most critical medical emergency times. 

− Avail dignified health care for the currently uninsured/  

5.5. Services Rendered by AE Insurance 

Upon settling on the above objectives, the key services to be rendered by the 

business venture are listed below: 

− To provides services in the health care sectors aimed at insuring uninsured 

South Africans. 

− To provide guidance to South African on matters of prevention of illnesses. 

− To create awareness on the available vaccination programs for emerging 

illnesses to avoid severe ill-health. 

− To provide updates to AE Insurance members on the development of their 

medical insurance.  

− To create online and telephone services for quick guides on matters 

members may be faced with.  

5.6. AE Insurance Market Analysis 

In their report, GCIS (2018/19) reported that between the years 2002 and 2019, 

there was a small increase in the number of individuals covered by medical aid 

schemes. Of the total population of 45 921 000 in 2002 only 15,9% (i.e. 7,284 mil) 

were covered by medical aid, and 2.8% percentage increase was witness over 14-

year period (increasing to 17.1% in 2016) after which it was followed by a slight 

decrease to 16.4% in 2018 and to 17.2% in 2019. This is also demonstrated in 

Statistics South Africa’s report which is shown in the table below.  



  32 

 

In this same period, over 80% of South Africans were not medically insured. This 

may mean between 70 and 80% of South Africans were exposed to the possibility 

of seeking their first medical help at public health facilities. The GCIS (2018/19) 

report indicated that as of 2019, 71.5% of South African households have 

presented that they would first visit a public health facility, while 27.1% would visit 

private health care facilities, and only 0.7% would visit a traditional healer.  

Table 5: South Africa Medical Aid Coverage (StatsSA, 2019) 

 

The data shows that on average, only 16.98% of South Africans over the period of 

2002 to 2020, had medical aid. The percentage difference over the same period 

shows that there is an average decline of -0.118% (equivalent 0.12%) per annum 

in medical aid coverage. While 14 million South Africans were employed, only 10 

million South Africans had medical aid coverage. When analyzing this data, since 

the 2020 stats were not obtainable at the time of this analysis, it was necessary to 

assume that the average growth/decline (-0.118% per annum) in insurance 

coverage continued to 2020. It is with this assumption that the 2020 medical aid 

coverage is assumed to have been at 17,08%. This does not take into 

consideration possibility that there may have been a further decline in medical aid 

coverage due to possible job losses that occurred at the height of the Covid-19 

pandemic.   



  33 

 

In their publication of the economic update with a focus on South Africa, The World 

Bank (2021) concluded that while South Africa saw two quarters of employment 

growth by the end of 2020, there were a further 1.5 million jobs lost in various 

sectors in South Africa. This loss in jobs would have most likely affected the 

number of people who have insurance coverage as a significant number of people 

rely on their employment income to fund their medical aids. However, for the 

purposes of this study, the inferred figure of 17.08% coverage in 2020 will be 

utilized. This will be utilized in conjunction with the 2020 employment figure which 

averaged at 14.6 million people. According StatsSA (2020), the South African 

population in 2020 was estimated to be at 59.6 million.  

Thus; 

Estimated medical aid coverage in 2020 = 59.6x17.08 ÷100 

      = 10.6 million 

With an estimate of 10.6 million covered vs the 14.6 million employed, there 

remains a gap in the cover of the employed population in South Africa. This 

balance is therefore the market available for AE Insurance to target. The table 

below gives the full employment data breakdown in South Africa, showing the 

exact gaps that AE Insurance can capitalize on to make the venture a success, 

while Figure 5 below gives all the medical aid data collected and available at this 

stage. 

 

 

 

 

 

 



  34 

 

Table 6: South Africa Employment Data (Statssa, Quarterly Labour Force 
Survey, 2021) 

 

The medical aid data is show below: 

 

Figure 4: Medical Aid Coverage in South Africa 

1
5

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Percentage Covered Increase/decline Average % Covered Average % Increase/decline



  35 

 

5.7. AE Insurance Competitive Advantage 

AE Insurance intends to provide a unique product(s) to the people living in South 

Africa that is targeted at those in the population that are unable to afford the main 

stream medical aid. With this revolutionary product, the business also believes that 

there are those insured by main stream medical aid schemes that would like to 

take advantage and enroll with AE Insurance for its affordability ad providing quality 

health care.  

With the current world of technological advancements, AE Insurance will also 

exploit the use of technology for cost saving initiatives, which will also enable the 

provision of health care at a low cost. 

5.8. AE Insurance Value Proposition  

AE Insurance is an initiative that is aimed a servicing a need. The need exists and 

the need is real.  

There is a common occurrence of negligence in the South African health care 

centers. The interviews conducted with the participants also indicated that this a 

common worry even in their spaces. Some participants were vividly shaken 

through the personal experiences in this regard, with one of them later detailing 

that this is how her mother passed away. Therefore, by providing a low-cost 

medical aid, AE Insurance intends to reduce such incidents.  

The people of South Africa have spoken on various platforms against the poor 

service delivery they receive at various public institutions. Health care, a very 

critical need for any human being, has not been spared. The venture’s value 

proposition is to provide quality health care to all South Africans who are currently 

uninsured and are willing to take on membership of a low-cost medical insurance 

to enjoy the use of private health care. 



  36 

 

5.9. Environmental Factors Analysis 

This section of the study will endeavor to establish and address factors that may 

affect the implementation of AE Insurance. To make this determination, a PESTEL 

Analysis has been conducted as seen in the table below. PESTLE stands for 

Political, Economic, Social, Technological, Legal and Environmental factors. 

PESTEL Analysis 

Table 7: AE Insurance PESTEL Analysis 

OPPORTUNITIES  THREATS 

Politics have a major role in determining the 

path a country can follow in terms of Medical 

aids. It is through political mandates or 

manifestos that are founded in major political 

conference that the policy positions are set 

which lays the way for the country’s 

management systems (including health). 

In order to create political alignment, it is 

prudent for AE Insurance to be politically 

aligned and have a thorough understanding of 

the major political players. In so doing, AE 

Insurance will be at an advantage as it would 

have an understanding of the policy set at 

conferences by the various political player. 

With all that, it is also important to have 

understanding that politics are dynamic and 

there are no guaranteed winners. There 

however likely winners and understanding 

Political The introduction of National Health 

Insurance as intended by 

government may mean those who 

would normally choose not to join a 

medical aid due financial difficulties 

are like not to join an initiative like AE 

Insurance as the envisaged 

improvements that may be brought 

about by the introduction of NHI are 

precisely what AE Insurance is 

intending to cater for. 

Furthermore, political threats do exist 

withing the democratic South Africa: 

- Major weaknesses amongst South 

African politicians in terms integrity 

that result in major corruption in 

various spheres of government – 

from the mere municipal level to the 

very high political office of the 



  37 

 

their policy positions and direction will serve 

AE Insurance well and avoid major surprises.   

AE Insurance will perform a thorough analysis 

of the following factors before starting up their 

business: 

- South Africa is politically stable country. The 

risk of political instabilities is low. The 

democratic process is alive and well.  

- Policy changes, though possible as voters 

may choose exercise their democratic rights to 

vote for a political party of their choice, are 

expected to have minor shifts.  

- Trade regulations & tariffs related to 

Healthcare 

- Favoured trading partners 

- Anti-trust laws related to Health Care Plans 

- Wage legislation: minimum wage and 

overtime 

- Work week regulations in Health Care Plans 

- Product labelling and other requirements in 

Health Care Plans 

 

country – including state organs that 

are tasked with fighting the very 

corruption.  

- With the initiative of low-cost 

medical aid being a rather unfamiliar 

territory in South Africa, the process 

of getting approval may face major 

bureaucratic challenges and maybe 

even resistance from those who 

benefit from the current method.  

- Government may create regulations 

that stifle this kind of initiatives. 

- Risks of copy rights if other players 

in the industry are already having this 

model. 

- Regulations intended at controlling 

pricing that may make this initiative 

more expensive than intended. 

- Adherence to consumer protection 

act 

- Tax laws may affect pricing for 

consumers as the taxes are covered 

for in the members premium.  

- South Africa’s minimum wage law 

may affect the pricing as the 

member’s premium caters for 

operational costs of the business. 



  38 

 

- Regulations that may limit the use 

of affordable medicines which may 

result in high premium for members. 

 

The Macro environment factors such as – 

inflation rate, savings rate, interest rate, 

foreign exchange rate and economic cycle 

determine the aggregate demand and 

aggregate investment in an economy. While 

micro environment factors such as 

competition norms impact the competitive 

advantage of the firm. Health Insurance 

Innovations, Inc. can use the country’s 

economic factors such as the growth rate, 

inflation and industry’s economic indicators 

such as Health Care Plans industry growth 

rate, consumer spending and more, to 

forecast the growth trajectory of not the 

medical aid and health sector but also that of 

the organization. Economic factors that Health 

Insurance Innovations should consider while 

conducting PESTEL analysis are: 

- Type of economic system in countries of 

operation; what type of economic system 

there is and how stable it is. 

- The government intervention in the free 

market and related Healthcare 

Econ The economy may not recover 

quickly enough to see workers who 

have lost their jobs or part of their 

income recover financially to join a 

medical aid scheme regardless of 

their wish to or the cost of joining one. 

 



  39 

 

- The exchange rates and the stability of host 

country currency. 

- Efficiency of financial markets: do Health 

Insurance Innovations need to raise capital in 

local market? 

- Infrastructure quality in Health Care Plans 

industry 

- Comparative advantages of host country and 

Healthcare sector in the particular country.   

- Skill level of workforce in Health Care Plans 

industry. 

- Education level in the economy 

- Labour costs and productivity in the economy 

- Business cycle stage (e.g. prosperity, 

recession, recovery) 

- Economic growth rate 

- Discretionary income 

- Unemployment rate 

- Inflation rate 

- Interest rates 

 

Society’s culture and way of doing things 

impact the culture of an organization in an 

environment. Shared beliefs and attitudes of 

the population play a great role in how 

marketers at Health Insurance Innovations will 

understand the customers of a given market 

Social Risk of targeted member not joining 

medical aid scheme due to targeted 

member taking the risk to get health 

care from public hospital.  



  40 

 

and how they design the marketing message 

for Health Care Plans industry consumers. 

Social factors that leadership of Health 

Insurance Innovations, Inc. should analyse for 

PESTEL analysis are:   

- Demographics and skill level of the 

population 

- Class structure, hierarchy and power 

structure in the society. 

- Education level as well as education 

standard in the Health Insurance Innovations, 

Inc. ’s industry 

- Culture (gender roles, social conventions 

etc.) 

- Entrepreneurial spirit and broader nature of 

the society. Some societies encourage 

entrepreneurship while some don’t. 

-Attitudes (health, environmental 

consciousness, etc.) 

- Leisure interests 

 

Technology is fast disrupting various 

industries across the board. Transportation 

industry is a good case to illustrate this point. 

Over the last 5 years the industry has been 

transforming quickly, not even giving chance 

to the established players to cope with the 

Tech IT Security: 

Hacking that could result in false 

claims. 

Customer information can be stolen 

by hackers (credit card information, 

telephone numbers, physical 



  41 

 

changes. The taxi industry is now dominated 

by players like Uber and Lyft. Car industry is 

fast moving toward automation led by 

technology firm such as Google and 

manufacturing is disrupted by Tesla, which 

has stated an electronic car revolution. 

 

A firm should not only do technological 

analysis of the industry but also the speed at 

which technology disrupts that industry. Slow 

speed will give more time while fast speed of 

technological disruption may give a firm little 

time to cope and be profitable. Technology 

analysis involves understanding the following 

impacts: 

• Recent technological developments by 

Health Insurance Innovations, Inc. 

competitors 

• Technology's impact on product 

offering 

• Impact on cost structure in Health Care 

Plans industry 

• Impact on value chain structure in 

Healthcare sector 

• Rate of technological diffusion 

 

address, email addresses, personal 

information, etc.) 

Different markets have different norms or 

environmental standards which can impact 

Env  



  42 

 

the profitability of an organization in those 

markets. Even within a country, different 

states can have different environmental laws 

and liability laws. For example, in the United 

States, Texas and Florida have different 

liability clauses in case of mishaps or 

environmental disaster. Similarly, a lot of 

European countries give healthy tax breaks to 

companies that operate in the renewable 

sector. 

 

Before entering new markets or starting a new 

business in existing market the firm should 

carefully evaluate the environmental 

standards that are required to operate in those 

markets. Some of the environmental factors 

that a firm should consider beforehand are: 

• Weather 

• Climate change 

• Laws regulating environment pollution 

• Air and water pollution regulations in 

Health Care Plans industry 

• Recycling 

• Waste management in Healthcare 

sector 



  43 

 

• Attitudes toward “green” or ecological 

products 

• Endangered species 

• Attitudes toward and support for 

renewable energy 

In number of countries, the legal framework 

and institutions are not robust enough to 

protect the intellectual property rights of an 

organization. A firm should carefully evaluate 

before entering such markets as it can lead to 

theft of organization’s secret sauce thus the 

overall competitive edge. Some of the legal 

factors that Health Insurance Innovations, Inc. 

leadership should consider while entering a 

new market are: 

• Anti-trust law in Health Care Plans 

industry and in the whole country. 

• Discrimination law 

• Copyright, patents / Intellectual 

property law 

• Consumer protection and e-commerce 

• Employment law 

• Health and safety law 

• Data Protection 

 

Legal  



  44 

 

Given the PEST Analysis above, it’s clear that while the threats exist, as they do 

in any environment, opportunities are great and for AE Insurance can take 

advantage of these. For AE Insurance to better position itself to acquire a bigger 

market share, the business needs to market rigorously to their target market. It 

should be also clear that, though the target is the uninsured, they are not the limit. 

There are many in the country who have the mainstream medical aid coverage 

who believe would rather take on the low-cost medical insurance for a number of 

reasons, amongst them is the fact that they amount they pay and the number of 

times that they need to use medical aid annually doesn’t correspond. Meaning 

given their normal health status, which may continue to very advanced age, they 

don’t need a medical aid, let alone a very expensive. However, to ensure they are 

covered for in case of any unforeseen medical emergency, they would rather pay 

a premium. 

5.10. Industry Analysis 

Table 8:  Industry Analysis 

Forces Strength Motivation 

Threat to entry Strong • South Africa encourages 

entrepreneurship. 

• Company registration process is properly 

laid out and possible to follow. 

• Though the insurance industry is highly 

regulated, the regulations are aimed at 

providing a good service to the member 

of an insurance company. 

Bargaining power of 

Buyers 

Strong 

 

• The insurance industry already has a lot 

of players. AE Insurance will be bringing 



  45 

 

a product that is aimed at the uninsured. 

These largely the low-income earners.  

• Opportunities exist for the currently 

insured who may want to join a low-cost   

Bargaining power of 

suppliers 

Weak • With the product being an intangible 

product, supplier’s influence is limited 

expect for operational advancements.  

Threat of substitute 

product  

Strong • Current industry players may change 

strategy in an effort to keep their current 

clientele by adopting the product that AE 

Insurance is offering. 

• Competition laws may be useful in cases 

where big players start to stifle market 

entrants. 

Rivalry amongst 

existing competitors 

strong • The target market may still not be 

convinced of joining a medical insurance. 

• Other player may make efforts to provide 

the exact same product taking advantage 

of the opportunity it provides. With their 

experience and financial muscle, it may 

be easy to adopt a new product. 

5.11. Customer Analysis 

The insurance industry is one that is often taken by people who understand risk 

and the means to alleviate/mitigate risk. In formal employment, most people are 

required by their employer to join a medical scheme often with the choices already 

reduced to a small number as selected by the employer. Employers have a need 



  46 

 

to do this in order to reduce the risk of suffering production losses to employees 

getting sick and unable to get medical help due to issues of affordability.  

To analyze the potential customers of this kind of initiative, the behavioral, 

psychographic, geographic and demographic analysis will be conducted.  

5.11.1. Behavioral Analysis 

Medical insurance customers, especially ones who join medical insurance by 

choice can be unpredictable, especially at a young age.   

5.11.2. Psychographic Analysis 

Insurance clients are looking for risk mitigation to allow themselves to have peace 

of mind knowing that should they get sick; they will get superior health care. The 

low-income earners are generally South African and from poor backgrounds. 

5.11.3. Geographical Analysis 

The clients’ geographical setup plays little role in the current digital age as they 

can access information online with ease.  

 

 

 

 

 

 

 

 

 



  47 

 

5.12. SWOT Analysis 

Table 9: AE Insurance SWOT Analysis 

Strength Weakness 

• There is already a market for a 

product of this nature. 

• Most of the people are looking at 

affordable product that will keep 

them away from public health 

facilities. 

• Inexperience in the insurance 

industry space. 

• New entrant into the market.  

• The territory is dominated by big 

player who have a potential to kill 

competition. 

Opportunity Threats 

• Accelerated implementation of the 

product before other player copy 

the unprotected parts of the idea. 

• The number of potential clients is 

significantly higher than the 

current estimate. 

• People who are members of the 

mainstream medical aid may 

consider joining this initiative as it 

is cheaper. 

• Threat of being squeezed out of 

the market by industry big players. 



  48 

 

5.13. Business Model Canvas 

Table 10: AE Insurance Business Model Canvas 

Business Model Canvas 

Designed for: Designed by: Date: Version: 

AE Insurance  Victor Tshamano  20.03.2022  00 

Key Partners Key Activities Value Propositions Customer Relationships Customer Segments 

• Health Professions 

Council of South 

Africa 

• Government Health 

department  

• Pharmaceutical 

industry 

• Hospitals  

• Marketing 

• Signing in new clientele 

• Product information 

sharing on sign up 

• Clients 

• Provision of private 

health services 

during medical 

emergencies 

For employees 

• Provision of 

professional 

services 

• Feeling satisfied with 

service provided 

• Job satisfaction 

• Customer satisfaction 

surveys for members. 

• Follow-up with customers if 

they are satisfied with private 

health facilities services 

provided 

• Uninsured people 

• Insured South 

Africans and non-

South Africans 

who may want a 

low-cost Medical 

aid. 
Key Resources Channels 

Call center, IT stuff, 

Management, Legal teams, 

medical trend analysts 

• Social media feedback 

• Customer service quick 

sheets 



  49 

 

Cost Structure Revenue Structure 

Marketing fees 

Innovation 

Staff salaries 

Electricity bills 

Internet connectivity 

Membership premium 

Designed by: The Business Model Foundry (www.businessmodelgeneration.com/canvas). Word implementation by: Neos Chronos Limited 

(https://neoschronos.com). License: CC BY-SA 3.0 

Table 9: Canvas  

 

 

 

 

 

 

http://www.businessmodelgeneration.com/canvas
https://neoschronos.com/
https://creativecommons.org/licenses/by-sa/3.0/


  50 

 

5.14. Market strategy 

This following section will detail AE Insurance’s market strategy, beginning with 

the market segmentation, target market, positioning, and the marketing 5Ps. 

5.14.1. Market segmentation  

Market segmentation is the process in which a certain product designed for a 

particular group of society. This is a strategy in which people with common needs 

will be grouped together. As  (Rogerson, 2013) stated, the concept of market 

segmentation refers to a situation where businesses would decide to split a market 

according to its distinct needs based on similarities or commonalities.  

The principle of AE Insurance is market segmentation, where an insurance 

business is created with the low-income earners as the target market. It is worth 

mention that the responses to the survey questionnaire suggests that not only the 

low-income earners would be interested in the AE insurance business model. 

Geographic  

Area covered South Africa 

Province All nine provinces 

Cities  Entry to market will initially focus on the highly 

industrialized cities of South Africa. The metros 

Demographics  

Age 
20 to 30 years old 

31 to 45 years old 

45 to 60 years old 

+60 years old 



  51 

 

Gender 
Male 

Female 

Transgender 

Income 
10 001 to 40 000 

Occupation 
Working or self employed 

Race All races 

Nationality Any 

Psychographic  

Social class Low-income earners 

Lifestyle Making ends meet, missing middle 

Personality Concerned about their wellbeing 

Behavioral  

Occasions Potential 

Benefits Access to private health care 

User status Instability as not permanently employed 

Loyalty stage Strong loyalty 

Attitude toward 

product 

Customer that is in need of the service as they want access 

to private health care when it is most needed. 

Table 10: Market Segment 

 



  52 

 

5.14.2. Target market 

As has been outlined on sections above, AE Insurance’s target market are 

uninsured working force of South Africa. Their reasons are inability to afford and 

for this study, the focus was contracted employees. This is AE Insurance’s target. 

The survey report however suggests that the need for low-cost insurance may cut 

across.  

5.14.3. Positioning 

AE Insurance’s value proposition is the provision of quality health care at an 

affordable rate. This will be done by allowing members access to private health 

care facilities during the time of critical emergencies. A member who has been in 

a vehicle accident will be receive private health care to the point of stabilization. 

Once stabilized, critical medical procedures have been performed and out of 

danger (meaning the member only requires observation), the medical stuff can 

either refer the member to public hospital for observation or release the member 

to continue healing from home. The manner in which the services will be provided 

is a matter of design by medical specialist, i.e., the right time to release a patient 

and much more of this nature. 

5.14.4. Marketing’s 5Ps 

• Product 

Customer value: making quality health care available at a time critical 

health emergency.  

Provided product: quality health care at an affordable rate/premium. 

Augmented product: each member can select their benefit level. 

Product decision - Benefits and feature: 

• Access to quality health care. 

• Peace of mind knowing there help in time of critical 

health emergencies.  

Product lifecycle: 



  53 

 

▪ Development – this is a learning point and a lot innovation will 

be required in order to allow flexibility. The voice of the 

customer will be critical at this stage. 

▪ Growth – having listened to the customer, AE Insurance can 

now grow into new heights with products that serve their target 

market. 

▪ Maturity – at this stage, the company has reached its peak 

and is consistently running at high level.  

▪ Declining – to protect against losses, the innovation leg of the 

organisation will always be funded and voice of the customer 

will be critical. 

• Price 

The pricing for AE Insurance was determined by the responses from the 

online survey conducted through Qualtrics. Market entry price will be R500 

per member.  

• Promotion 

Online marketing will be conducted to promote AE Insurance. In these 

platforms, the benefits of low-cost insurance will be the focus of the market 

strategy. The business will use the following platforms:  

 

− Electronic media:  convenient, accessible by many in South Africa 

− Social media: available for all to access 

− Adverts (bill boards, flyers) 

− Promotions 

− Targeted campaigns  

• Place 

The market entry locations are in Mpumalanga. This area has been targeted 

for its industrialized economy through the mines and power generation 

plants, petrochemical giant.  

 



  54 

 

• People 

AE Insurance will have workers whose focus is on marketing, product 

development and registering new member. 

5.15. Operational Strategy 

5.15.1. Key partner 

For AE Insurance, key partners are employers of the targeted customers. The 

banks are also critical in allowing for members to pay their medical insurance on 

debit orders. Government is critical as they set policy positions. 

5.15.1.1. Government 

The government of South Africa is in the process of establishing a NHI that is 

aimed at providing universal health care for all. Policy positions may change the 

way AE Insurance get operated in this future. The business model may have to 

change to adapt to the new norm when it happens. 

5.15.1.2. Technology companies 

For continuous improvement and to stay in touch with the customer, AE Insurance 

will need to be innovative in the use of technology. Technology can be used to 

assess hits that potential members are searching for on the internet and use their 

search history to provide campaigns related to the insurance business.  

5.15.1.3. Employers 

Employers are critical in allowing for face-to-face marketing of the product. They 

can allow for mass gatherings of target members for the physical marketing of the 

product. 

5.15.1.4. Banks 

A relationship with all South African banks is critical. This will be the means in 

which monies are paid from members to AE Insurance and vice versa.  



  55 

 

5.15.2. Key resources 

5.15.2.1. Physical resources 

AE Insurance will consist of two types of physical resources: 

− Head office: this is the physical management center of the company. 

Strategic decisions about the direction of the company will be made here. 

This includes marketing, growth, modelling etc. 

− Call center: this will be an outsourced service but AE Insurance will still be 

managing. They are responsible for marketing or for the execution of the 

marketing strategy.  

5.15.2.2. Human capital 

Head office stuff will form the bulk of permanently employed employees of AE 

Insurance. Other services will be outsourced. Included in the head office stuff will 

be: Training and development, Marketing, Strategy development, Executive 

leadership (CEO, CFO, HR Director etc) 

5.15.2.3. Intellectual resources 

Management of intellectual property or protection of information of members is a 

critical matter for AE Insurance to manage.  

5.16. Key activities 

− Provision of training: all call center employees need to be trained on 

understanding the product. 

− Vetting and validation of members: once a person has decided that they 

want to join, a process of insuring that they are who they say they are gets 

under way. This is done through basic security checks. 

− Attracting customers: development campaigns targeted at bringing in more 

customers. 



  56 

 

− Innovation and technology improvements: allowing the business to grow 

through innovation and creating products that customers are asking for. 

− Payment of claims: ensure payment of claims is done timeously.  

 

5.17. Organizational Strategy



  57 

 

  

 

 

Figure 5: African Excellence Insurance Organizational Structure



  58 

 

5.18. Financial strategy 

5.18.1. Revenue stream 

AE Insurance’s source of revenue will come through its membership. The details 

of the company’s inputs are calculated in the forthcoming session. This will be a 

month premium paid by members to maintain their membership and ability to 

claim.  

5.18.2. Cost structure  

- Variable cost: this portion is dependent on claims. Based on behaviors of 

members, this can be projected on seasonal basis. 

- Fixed cost: these are overhead costs incurred on regular basis. These 

includes rentals, utilities, telephones, marketing 

5.18.3.  Financial projections 

This section of the study analyzes the financial viability of an insurance of its kind. 

Financial projections will be conducted on assumption made. 

5.18.3.1. Income statement  

Financial information found in the income statement details the business’s 

profitability which a difference between income and cost incurred in the running of 

the business (operational costs). 

5.18.3.2. Sales 

At the initial stage of attracting customers, AE Insurance will form partnership with 

employers of the target employees. Most of the employees are based in major 

industry that employ the services of contractors. The major provider of this clientele 

will be the major petrol making company based in Secunda with contracted 

employee in the region of 10 000 consistently. The next target employer is South 

Africa’s electricity giant that is spread across South Africa with up to 15 power 

generating asserts and multiple other support businesses in their value chain. The 



  59 

 

number of contracted employees per generating assert ranges between 1500 to 

2000 per generating unit. This means there are approximately 22000 to 30000 

contracted employees in the generating units. Around the same number is spread 

across other businesses in the value chain. Working with the lower number and 

result of the survey. It needs to be noted that further studies that are focused 

estimating potential entrants may arrive at different numbers. For the purposes of 

this study, the estimated number are based on the following: 

- Number of contracted employees: this is an estimate based on actual 

number of contactors in each of these businesses. 

- Potential clients: this is an assumption based on the survey response 

where 56% of the respondents were certain they would join this kind of a 

scheme. There is another 37% of the respondents that was on the fence. 

These have a potential to join but for the purpose of this analysis and in an 

effort not to be too optimistic, have been left out of potential clients. For this 

study 18 000 members are going to be assumed to be joining the scheme 

at its inception period (within the first 36 months to 60 months).  

It is also important to note that these numbers are only based on two companies. 

There is still the airline industry, the food sector, manufacturing sector etc.  

Table 11: AE Insurance estimated number of clients 

 
Responses 

Percentage 

distribution 

Estimated 

number of 

contracted 

workers 

Estimated 

number of 

potential clients 

Yes 30 56% 32500 18055 

Maybe 20 37% 32500 12037 

No 4 7% 32500 2407 

 
54 

   

 



  60 

 

 

F