The sharp rise in the cost of living is yet to deter consumers who are in need of funeral cover, even though the gloomy economic outlook might impact future demand, says Lee Bromfield, CEO of FNB Life, the administrative and insurance distribution arm of First National Bank.
Since the beginning of the year, consumers have had to contend with rising food prices and successive interest rates increases in the first quarter. In spite of the SARB’s decision to keep interest rates unchanged in its recent review, economists expect an imminent rise in petrol price, further constraining household budgets.
“Our customer data shows relatively stable demand for funeral cover despite consumers experiencing a tough first-half of the year. One of the plausible assumptions is that consumers are becoming wary of accumulating debt for eventualities such as funerals. Not only is this a smart financial decision, but it also contributes to slowing the rate of people who get into debt for unforeseen occurrences such as losing a loved-one,” says Bromfield.
FNB Life says over the last nine months, it has sold over 400 000 funeral policies. Though partly attributing the growth to the value consumers place on funeral cover, the business unit has been aggressively making its funeral plans available across FNB’s banking platforms such as ATMs and Cellphone Banking.
Bromfield says improved accessibility to funeral plans remains a key contributor to financial security. However, he emphasises that consumers should remain vigilant against unscrupulous industry practices. He says people who are looking for cover must approach reputable providers to avoid financial losses.
“People need to choose a provider they can trust, because among the many players in funeral insurance, you still get some that do not have the interests of the consumer at heart. This is why consumers need to pay attention to which insurance providers they choose,” he says.