FNB has launched new motor vehicle and home insurance offerings as well as free risk cover for purchases made with its branded virtual cards, which it says are part of efforts to become a more integrated financial services provider.
The lender’s foray into short-term insurance will bolster its existing life cover offering, which it launched in 2015, and enable it to disrupt an insurance market where it faces stiff competition from rivals such as Standard Bank and Discovery.
“Insurance is a vital cog in meeting the needs of our retail and commercial customers ... through a digital platform that they already trust,” said FNB CEO Jacques Celliers. “The rollout of short-term insurance solutions complements our strong transactional and lending businesses as well as our maturing investment and life insurance businesses. We believe that the short-term insurance sector is ripe for platform disruption and innovation.”
FNB, which sits alongside other FirstRand-owned companies like RMB, Ashburton Investments and WesBank, is integrating more financial services products for clients by leveraging its technology platforms. The bank has also said it is specifically targeting the roughly 27-million people in SA who earn less than R450,000 a year as a key growth segment.
Raj Makanjee, CEO of retail and private banking at FNB and RMB, told Business Day on February 2 that it regards customers earning between R36,000 and R450,000 a year as the sweet spot in an SA retail banking market of about 30-million bankable adults.
“Insurance premiums, especially car and home insurance, account for a significant percentage of financial commitments among FNB’s individual customers,” Makanjee said of the new short-term insurance product offerings. “Our new solutions will go a long way towards ensuring that we offer holistic money management support to customers.”
The new insurance offering will allow FNB and RMB Private Bank customers to get as much as 15% of their premiums back in the form of eBucks, the banking group’s rewards programme, while those who work from home can get up to 20% off their car insurance premiums. FNB will also offer customers who buy products using its branded virtual cards free purchase cover for the first 30 days after a transaction.
The new car and home insurance offerings will be accessible on FNB’s app.
“FNB has been rolling out its short-term insurance solutions in phases, with over 250,000 customers on its books across retail and commercial products,” said Lee Bromfield, CEO of FNB Insurance. “The depth and breadth of FNB’s relationships with millions of customers provides a unique opportunity to make significant inroads in short-term insurance.”
theunisseng@businesslive.co.za
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