Emerging practices of consumer financial education (CFE) in the microinsurance industry: a case of South Africa

Abstract

Improving insurance education has been the goal by the National Treasury of South Africa to promote financial inclusion of the low-income households and enable them to make informed decisions so they can better manage risks. The objective of the study is to identify existing gaps and highlight some areas where investment in insurance education is needed. Questionnaires were distributed to 203 respondents from outreach places in South Africa. Nearly all the participants reported that the populations they work with were not only uninsured but alarmingly uninformed about the concept of insurance. Most of the respondents mentioned a need for more literacy methods and although traditionally, face-to-face meetings were preferred, there is a need to scale up microinsurance education efforts to reach a wider uninsured audience more cost-effectively. It is difficult for face-to-face meetings to achieve this broad reach easily or cheaply. An exploratory factor analysis was conducted and findings reveal that adding mass media activities and group discussions, blended learning and other promotional activities, can reach more low-income households and improve the cost-efficiency of their campaigns.