South Africa-based insurance startup Sugar has launched its niche product which targets homes in townships, rural villages, and informal settlements, the media reported.
Sugar’s insurance policies cover the structure and contents of a home such as electronical equipment. It also provides home assistance in case of a customer needing a plumber, electrician, locksmith, or any such service.
Sugar provides home insurance of up to $109,000 for the structure and up to $27,000 for the contents.
Ntando Kubheka, founder and chief executive officer (CEO) of Sugar told the media, “Traditional insurers shy away from this market because they don’t understand it. Typically the underwriting process requires valuation data which these homes don’t have in the valuation roll or the deeds office, and these homes are located in areas which are called “unstructured”, with no formal addresses.”
“There are no municipal approvals when building these homes, there are no engineering certificates, and the builders are typically not NHBRC approved. Traditional insurers also shy away from this market because there is no available actuarial data that describes this market and its behaviour.”
“We cover all risks including theft and accidental damage. Our customers are covered for likely events – South Africa for example is not prone to earthquakes so we do not automatically cover earthquakes unless the customer specifically adds this risk cover. Our shack product is designed to be a prepaid voucher that is paid for at the point of purchase and provides cover to the customer for 12 months. The customer determines their own risk.”
The startup, which was established in 2018, operates throughout the country. Reportedly, it is also in the process of raising around $1 million in a fresh funding round. The funding will be used to help the startup grow in its home market.