Pay@ and Moneyweb brought together a panel of insurance industry voices to unpack the real reasons behind policy lapses in South Africa's funeral insurance market. The discussion shared what experts are seeing across product design, payments, and the day to day running of a funeral business.

• Luke Nel, Head of Protection Solutions at Metropolitan
• Marius Brits, Co-founder and Chief Information Officer at 360 Administration
• Namhla Gysman, Business Development Lead at Pay@
• Obey Ndebele of Kings & Queens Funeral Services

South Africa's funeral insurance market is growing fast. One in four South African adults holds at least one funeral policy, and by 2030, the market is projected to approach R1 billion in value. But signing up new policyholders is only half the job. Keeping policies active matters just as much, and insurers put significant effort into preventing lapses.

Seemingly, the systems designed to prevent lapses are often part of the problem. Strict payment policies and compliance requirements can often have the opposite effect, ultimately increasing payment friction rather than reducing it.

Affordability is not the real issue

Luke Nel of Metropolitan challenged a long-held industry assumption, that affordability is what causes policies to lapse, when in fact most affordability challenges are temporary. “Whether the customer has unexpected expenses during the month, earns weekly wages as opposed to a fixed salary, or has payment delays of their own, insurers can’t assume polices lapses disqualify a customer as a policyholder,” when the real issue is payment inflexibility said Nel.

Metropolitan built its No-lapse Funeral Growth Plan around this. It's an innovative digital insurance product where customers contribute what they can, when they can, building cover over time. No failed debit orders, no bank penalties, no unnecessary lapses.

Marius Brits, Co-founder of 360 Administration and Systems, agreed, emphasising that a blanket approach inevitably overlooks individual needs. By interpreting consumer data the correct way, payment behaviour and trends can enable insurers to provide the right support at the right time, “instead of unfairly categorising people based on traditional payment models” Brits said.

Where customers can pay matters as much as when

Namhla Gysman form Pay@ picked up the discussion from the payments side, highlighting that a lack of payment options is one of the biggest challenges facing insurers. “Customers need to pay in the way that is most practical for them, throughout the life of the policy, and that changes as their circumstances do” she said.

“In practice this means meeting people where they already are. At a retail till or spaza shop, in a banking app, through a QR code or a mobile wallet, all connected through a single payment platform. Cash and digital sit side by side rather than competing.”

What it looks like in practice

“Before Pay@, around 50% of our policies lapsed every month. Today that figure sits at 20% and lower.”

Obey Ndebele of Kings & Queens shared the notable changes at the funeral service. “Before Pay@, around 50% of our policies lapsed every month. Today that figure sits at 20% and lower.” He also pointed to a benefit beyond retention, noting that a strong collection method reduces the security and operational risks that come with running a cash-based business.

More payment options, not more complexity

Insurers often worry that adding more payment channels means rebuilding systems. It does not. With the right payments partner, additional channels connect to existing infrastructure through a single integration, which keeps the work off internal teams while widening the ways customers can pay.

Funeral cover only does its job if it is still in place when a family needs it. Giving customers more ways to pay is one of the simplest ways insurers can make sure it is.

Watch full webinar here: