Life insurer Clientèle says banks, telecom companies and retail chains are stepping up efforts to sell insurance to low-income customers, gaining an edge from their vast consumer data.
Clientèle chair Gavin Quentin Routledge told the R6.3bn group’s shareholders there was growing competition from other insurance companies that have identified the company’s target market segment as a growth area, as well as from banks, retail stores and telecom groups.
He said these groups were marketing insurance products as an add-on to their core offerings to clients.
“To complicate things further, many of these newer entrants to the insurance market have access to detailed information about the financial health of their clients which the traditional insurers do not have, creating an uneven playing field,” Routledge said in an annual letter to shareholders published in the group’s annual report.
“The challenge is to try and educate the market that price is not the best determinant of value and that service and a deep understanding of the entry level insurance market is of longer term value.”
Clientèle’s primary lines of business include long-term (Life) insurance and short-term (Nonlife) insurance, in the lower income SA demographic.
The group has ramped up its acquisitive growth over the past two years, looking to defend its market share as competition in the life insurance sector intensifies.
Clientèle recently concluded multimillion-rand deal to buy Emerald Life, giving it access to more than 350,000 policy holders, with a sizable book linked to SA Social Security Agency (Sassa) grant recipients and public servants.
Emerald, whose distribution model is based on a national network of about 2,500 internal sales representatives, has over the years built a strong presence in underserved communities through its access to Sassa-linked debit orders and loyal policyholder base.
These metrics caused the JSE-listed Clientèle to acquire Emerald in a R641m deal, funded through free cash and the issuance of preference shares by Clientèle Life.
The company last year completed the R1.9bn acquisition of 1Life, creating a group with 1.5-million policies with an estimated embedded value of more than R8bn.
1Life was owned by Telesure Investment Holdings (TIH), which owns Auto & General Insurance, Budget Insurance, Dialdirect Insurance and First for Women Insurance.
Clientèle settled the acquisition by issuing scrip to TIH. The group said 1Life successfully moved and transitioned operations to the Clientèle Campus during the first half of the financial year.
SA’s big banks have increasingly exploited cross-selling opportunities in their ecosystem with life insurance, low-hanging fruit lenders have pursued.
The biggest disruptor in the life insurance space has been Capitec. The Stellenbosch-based lender made its foray in the life insurance sector in 2017 through a funeral product co-operation agreement with Sanlam.
However, Capitec with its 25-million client base in October 2024 terminated the agreement after it received its own insurance licence.
Capitec’s insurance business under its own licence grew well during the 2025 financial year, with the total funeral book increasing to 3.2-million active policies, while the number of lives insured grew to 14.7-million from 12.1-million in the prior year.
The mass market has also appealed to Sanlam, which has been underweight in the segment for years. To this end, the group in 2023 bought Assupol for R6.5bn, integrating the business into the Sanlam Retail Mass unit, under the leadership of CEO Bongani Madikiza.
The integration has been described by Sanlam as one of the most consequential consolidations in the mass-market insurance space in recent years, bringing together more than 5-million policyholders under a single umbrella.
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