Case Study Shoprite

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Case Study: Shoprite
Part of the FinMark Trust series of case studies on innovative microinsurance models and products in South Africa Authors: Anja Smith and Herman Smit Date: 16 July 2010

The Centre for Financial Regulation and Inclusion USB Bellville Park Campus, Carl Cronje Drive, Bellville, 7530, South Africa +27 21 918 4390 www.cenfri.org

Table of Contents
1. 2. 3. Introduction ........................................................................................................................1 About the institution ..........................................................................................................1 About the products and channel ........................................................................................2 Bibliography ..................................................................................................................... 10

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1.

Introduction
This case study forms part of a series of case studies completed for the FinMark Trust by the Centre for Financial Regulation and Inclusion (Cenfri), as part of a larger study titled “Update on innovative microinsurance models and products in South Africa”. The purpose of the case studies is to review the success and development of various microinsurance models that have been launched during the last few years in South Africa. This allows for the identification of success factors and obstacles and challenges to the distribution innovation process, contributing to a better understanding of how to make insurance products work for the low-income market. The main focus of the case studies is on distribution, an area that has seen particular innovation. Nevertheless by reviewing both the distribution model and the products provided through a particular channel, product innovation is also considered. Methodology. The project draws on information gathered during a number of interviews with innovative microinsurance providers, as well as new organisations entering into the insurance distribution space such as retailers or retail payment providers. The information from interviews is supplemented by publicly available information on these providers and their distribution channels, such as newspaper reports, websites and annual reports. Since this report builds on a series of earlier FinMark Trust research reports, the report also draws on earlier information and insights from this research. Availability of data. Given that the case studies will all be placed in the public domain, data that provide a true reflection of the success and value of different models and products, for example the number of policies sold, claims ratios, policy persistence, total premiums generated, profit, etc, are often not disclosed by the providers on the basis of its being commercially sensitive. Where companies were willing to share this data, it is included in the case studies. Given that we obtained different types and levels of information for the different case studies, the length of case studies also vary. This case study highlights the Shoprite experience in the microinsurance market. It illustrates how a retailer can fulfil a role similar to that of an insurance broker by selling the same category of insurance product, funeral insurance, of more than one insurance company.

2.

About the institution
Shoprite Holdings (Ltd), the holding company of the retail group that includes well-known South African supermarket chains Shoprite and Checkers, started operations in 1979. Today, the Shoprite group has 1,068 corporate and 275 franchise stores in 16 African1 countries and India. In South Africa, the company’s store network is as follows:

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African countries include: Angola, Botswana, Ghana, Lesotho, Madagascar, Malawi, Mauritius, Mozambique, Namibia, Nigeria, South Africa, Swaziland, Tanzania, Uganda, Zambia, Zimbabwe and the Democratic Republic of the Congo.

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Trade name Shoprite stores Checkers Checkers Hyper U-Save...
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