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The Biggest Global Trends In The Insurtech Space Currently…

The potential is huge, and insurers who offer world-class end-to-end ecosystems with the latest in insurtech solutions will be well-positioned to be the chosen provider to a market that’s currently relatively untapped.





Emerging market insurtech companies are set to play a major role in the predicted rise of premium growth across the global insurance industry – an expectation which has motivated Sanlam to become the first South African insurtech partner to Plug and Play, the largest global innovation platform, based in Silicon Valley.

Munich Re’s prediction that the insurance industry’s growth will outperform the global economy in 2018/19 with global premium growth of over €460-billion, has therefore resulted in the potential creation of an African hub for Plug and Play, which is set to see ripple benefits with win-win scenarios for global start-ups and African insurtech companies.

“The market landscape in South Africa is in a unique position to embrace startup solutions in providing innovative products and services to customers,” said Plug and Play Founder and CEO, Saeed Amidi. “We’re delighted to be partnering with Sanlam and feel we have much to learn from one another.”

As part of it’s anchor partnership, Sanlam and Plug and Play are hosting an inaugural Innovation Conference on 23-24 October 2018 in Cape Town, attracting speakers such as tech expert Arthur Goldstuck as well as Sanlam’s Head of Design, Jack Kruger and Peter Castleden, CEO at Indie.

Sanlam has received strong recognition for its backing of first-of-its-kind solutions like Go Cover, which offers on-demand accidental injury and death cover, and Indie Fin – a digital-first insurer which simplifies life insurance for ‘the mobile generation’. Both provide quick, easy offerings with slick user interfaces. They demonstrate an iterative, agile approach to product development, with fast execution and performance-aligned revisions. Agility is a buzzword in business currently, and it’s one of the predominant benefits of insurtech solutions.

The conference will cover key insights into how to harness these solutions to deliver a cohesive client journey. Ahmed Banderker, Chief Executive of Sanlam Business Development, is convinced that Sanlam’s sustained market relevance is the result of its ongoing ability to innovate. “This year Sanlam turned 100. You don’t become a centenarian by being complacent.”  He says Plug and Play gives the company access to an extensive ecosystem of strategically-aligned start-ups who will play a pivotal role in boosting Sanlam’s digital transformation journey.

Related: Trends To Fast Track Your Business In 2018

Banderker lists some of the biggest global trends in the insurtech space currently: 

  1. The evolution of ecosystems: An ecosystem is defined by McKinsey as ‘an interconnected set of services that allow users to fulfil multiple needs from one, integrated experience’. In its report, McKinsey predicts that by 2025, ecosystems will be responsible for 30% of global revenues. Insurtech start-ups are pivotal partners for insurers looking to move to the ecosystem space – a space Sanlam already operates in, especially in conjunction with short-term insurer Santam.
  2. The Internet of Things: The IoT refers to Internet-connected devices, vehicles and so forth, that can ‘connect, collect and exchange data’. For insurers, the IoT offers phenomenal potential in terms of product and user-experience personalisation, streamlined client interactions and data collection. According to Deloitte, 80-million smart home devices were delivered worldwide in 2016, with over 600-million expected to be in use by 2021.
  3. Changing customer expectations: With the rise of the IoT, robotics, artificial intelligence and automation, customers are expecting more. People expect an omni-channel communication approach via the channels (like WhatsApp, email) they naturally gravitate towards. They expect immediacy. They are starting to respond positively to robo-advice. They’re motivated by gamification – especially in the financial education space. From a gamification perspective, there’s much work to be done in the consumer education space around financial literacy, in the South African market especially. In terms of immediacy, it may soon be a case of simply sending a ‘selfie’ to an insurer, who’ll have the facial recognition software required to assess a client’s longevity just from a photo.
  4. Advanced analytics: In the insurance space, big data and analytics are particularly important. Everything is based on data so a focus of insurtech is not just how to capture it, but how to intelligently use strategic insights to streamline underwriting, lower costs and enable online distribution capacity.
  5. Microinsurance: Insurtech has positive implications for micro-insurance, which aims to offer affordable cover to low-income households. Automation and robo-advice, for example, are helping to bring down insurance costs, potentially making products more accessible.
  6. Personalisation: Data and analytics are driving mass policy personalisation at an increasingly granular level. Sanlam’s acquisition of BrightRock– a personalised, needs-matched life insurance provider – is testament to its belief in personalisation as an upcoming necessity. Personalisation of user experience is another focal point.

Related: 3 Tech Trends Your Franchise Should To Keep Up With During The 2018 Restaurant Revolution

Banderker says, “Our Plug and Play partnership means we can present a problem statement and start-ups across multiple verticals will pitch solutions. So a problem that may seem to sit in the insurtech space could be solved in the Fintech or Retail vertical. Access to this kind of ecosystem is invaluable. The beauty of startups is the agility they offer in creating intelligent solutions to specialised problems. This modular approach catalyses speedy solves. Then you put all the solves together and you have something truly unique to offer clients. Which is what our client-centric approach is all about.”

In terms of South Africa and Africa at large, there’s incredible opportunity for insurtech innovations. Goliaths like Google are working hard to cheaply solve connectivity access issues and it’s inevitable that data costs will come down. This has big ramifications in a country like SA, where more than half the population own smartphones. The potential is huge, and insurers who offer world-class end-to-end ecosystems with the latest in insurtech solutions will be well-positioned to be the chosen provider to a market that’s currently relatively untapped.

For more information on Plug and Play and Sanlam, visit

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Entrepreneur Today

3 Stealthy Tax Hikes Payroll Managers And Employees Need To Take Note Of

By Rob Cooper, tax expert at Sage, and chairman of the Payroll Authors Group of South Africa





“Dammed if you do and dammed if you don’t.” 

The adage summarises the difficult decisions government and the Finance Minister faced when balancing the country’s books, rescuing state-owned enterprises, and reviving the growth of our economy. Given the economic pressure that most taxpayers are facing, government ideally needed to achieve all of that without direct increases to personal income tax in the most recent Budget Speech.

Personal income tax has comprised at least a third of South Africa’s total tax revenue in recent tax years, despite growing unemployment. The 2019 Budget, presented in February, forecasts that personal income tax will account for nearly 39% of tax collected during the upcoming (2019/20) tax year. Given that we are in an election year and that the tax base is fragile, it’s not surprising that the Finance Minister and the National Treasury avoided direct increases to the statutory tax tables used to calculate PAYE for employees in the budget.

Nonetheless, government has made inflation work in its favour to impose some tax increases by stealth. Here are three ways government is raising more revenue without direct tax increases:

1. Bracket creep

The statutory tax tables used by payrolls and employers have not been changed for 2019/20, nor have the brackets been adjusted for inflation. This effectively amounts to an indirect tax increase that will yield a revenue saving of approximately R12.8 billion for government’s coffers.

It is not unusual for government to use ‘bracket creep’ to effectively raise more revenue. But unlike previous tax years, even low- and middle-income earners are not getting much relief. Rebates and the tax threshold are being increased by small amounts to allow some relief, but many people this year will feel the pain as inflationary salary increases push them into a higher tax bracket.

2. Medical aid credit not adjusted for inflation 

As proposed in the 2018 Budget, the Finance Minister did not apply an inflationary increase to the Medical Tax Credit, which allowed him to raise an extra R1 billion in revenue for the year. Surprisingly, these funds will be allocated to general tax revenue rather than ring-fenced for healthcare. In previous tax years, revenue generated from below-inflation increases on medical scheme credits was used to fund National Health Insurance (NHI) pilot projects.

There is still no clarity on how the NHI is going to be funded except for a general statement that the funding model is a problem for the National Treasury to solve, and that the principles of cross-subsidisation will apply. One wonders if any real progress will be made soon, given the fiscal constraints government faces.

3. Business travel deduction left untouched

The Budget leaves the per-kilometre cost rates used to determine tax deductions for business travel untouched. By not increasing travel rates to account for inflation, government effectively increases income tax collection at the cost of the taxpayer. This will be a blow for people who need to claim from their employers for business travel in their personal vehicles. This change has slipped through largely unnoticed and the budget does not provide numbers for the expected increase in tax revenue.

Closing words

Amid political turmoil and uncertainty, the Finance Minister presented a balanced budget for 2019/20 that offers hope for the future along with some tough love. With government taking steps to accelerate economic growth and improve revenue collection, we should hopefully see a steady improvement in government finances, which will translate into less pressure on the taxpayer in future years.

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Entrepreneur Today

SMEs: Staying On The Right Side Of The Taxman

Remaining SARS compliant can be a constant challenge for small- to medium-enterprises (SMEs), especially when they are trying to focus on growing their businesses and streamlining their operations.





EasyBiz Managing Director, Gary Epstein, says submitting taxes can be a seamless process that does not have to take up more time than is necessary. “If business owners understand what is required of them and they put a few processes into place to deal with their tax submissions properly, their lives will be so much easier.”

What are the top three considerations for SMEs when submitting tax returns?

“Firstly,” says Epstein, “SARS returns must be accurate and submitted in terms of the relevant Act. Secondly, returns should be submitted and paid on time to avoid unnecessary penalties and interest, and thirdly, business owners must follow up on queries issued by SARS. “Do not ignore these queries, act on them as soon as possible”.

What are the major SARS submission deadlines for SMEs?

Epstein points out that small business owners need to adhere to various tax deadlines, each with their own particular dates for submission. “It is important that business owners diarise the dates (and set advance reminders for themselves) and/or enlist the services of an accountant or financial adviser to help them keep abreast of requirements.”

Value-added tax (VAT)

VAT payments need to be submitted in the VAT period allocated to the business, according to various categories and ending on the last day of a calendar month. This may mean making payments once a month, once every two months, once every six months or annually, depending on the category.

Provisional taxes

Provisional tax should be submitted at the end of August (first provisional) and at the end of February (second provisional) – for February year-end companies.

Employee taxes

In addition to submitting an annual reconciliation (EMP501) for the period 1 March to end of February for Pay-As-You-Earn (PAYE), Skills Development Levy (SDL) and Unemployment Insurance Fund (UIF), employee tax, in the form of an EMP201 return, needs to be submitted by the seventh of every month.

When can SMEs get extensions and is it worth it?

Epstein says SMEs can apply for various extensions, but these are subject to the Income Tax Act and Tax Administration Act.

“It is best for SMEs to consult their tax professionals to get advice regarding extensions for their businesses.”

What is SARS not flexible about?

SARS is not flexible when it comes to late returns and late payments.

“I cannot stress enough how important it is for SME owners to ensure their tax returns are submitted on time. In this way, they will avoid the inconvenience and expense of additional fines and interest,” notes Epstein.

What skills do SMEs need in their organisations to be able to submit to SARS efficiently?

Business owners often don’t have the time or expertise to deal with tax submissions throughout the year. If the business cannot afford to employ a full-time accountant or financial services expert, it would do well to outsource its tax requirements to a registered tax practitioner.

“I would recommend that even if they are not submitting the tax returns themselves, business owners should have a broad understanding of the tax regulations and what is expected of them. There is a lot of helpful information on the various Acts and tax requirements on SARS’ website,” says Epstein.

How does the right software help SMEs remain SARS compliant?

SME’s (and their accountants’) jobs can be made easier by using reliable accounting software to calculate accurate VAT reports. These reports are only as accurate as the data entered into them, which means care needs to be taken when inputting data into the accounting programme. Epstein says a good accounting software package must be reliable, easy to use and functional.

“SMEs need to check that the software has thorough reporting capabilities and can interface with other software solutions. Of course, it is also important to find out whether the software is locally supported by the vendor or not.”

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Entrepreneur Today

4 Dangers Of Business Under-insurance

A common short-term insurance peril that many SMEs face when submitting a claim following an insured event is the risk of being underinsured.





Malesela Maupa, Head of Products and Insurer Relationships at FNB Insurance Brokers says, many small business owners mistakenly believe that by merely having a short-term insurance policy in place they are adequately protected against unforeseen events.

“This is technically correct provided that the business is covered for the full replacement value of the items insured. However, in circumstances where the sum insured does not cover the full replacement value or material loss of the item insured, the business is underinsured,” explains Maupa, as he unpacks the dangers of business underinsurance:

1. Financial loss

The most common risk is financial loss on the part of the business. If the business is underinsured or the indemnity period understated, the short-term insurance policy will only pay out the sum insured for the stated indemnity period as stated in the schedule, with the business owner having to provide for the shortfall. This often leads to cash flow challenges, impacting profit margins or rendering it difficult for the business to recover following the financial loss.

2. Reputational damage

Should an underinsured business not have sufficient funds to replace a key business activity or critical component following a loss, this may impact its ability to fulfil its contractual obligations, leading to a loss of business or market share, and irreparable reputational damage in the worst-case scenario.

3. Legal action

A small business also faces the risk of customers or clients taking legal action against it, should it fail to deliver on goods and services following a loss or be unable to honour its financial commitments that they committed to prior to the loss.

4. Survival of the business

A catastrophic event such as fire, which could result in the loss of stock or company equipment and documentation, could threaten the survival of a small business that is not yet fully established, if the business assets are not adequately insured.

Working with an experienced short-term insurance broker or insurer is essential when taking up short-term insurance to ensure that business contents are covered for their full replacement value.

Furthermore, depending on the nature of the business or item insured, the policy should be reviewed on a regular basis to avoid underinsurance as the value of items often change overtime due to fluctuations in economic activity. Where it’s necessary, evaluation certificates need to be kept up to date.

“Lastly, SMEs should ensure that the sum insured does not exceed the replacement value, which would lead to over insurance. Should a business submit a claim following a loss, the insurer would only pay out the replacement value, regardless of the higher sum insured,” concludes Maupa.

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