Microinsurance Cell Captives in South Africa

The Financial Sector Prudential Authority of South Africa has brought to life the much awaited microinsurance cell captive licensing. Microinsurance cell captives are expected to rapidly increase the pace of transformation in the insurance sector at large. The microinsurance cell captive license is issued as a composite license which features both long- and short-term products.

Zanele Mswela, Technical Broker: Risk Financing & Captive Management at Maksure Risk Solutions explained that microinsurance cell captives brings the advantage that it requires minimal capital at R250 000 to incorporate a cell.  The minimum capital of microinsurance cell captives can be compared to ‘traditional’ cell captive minimum capital of R 1 000 000. Microinsurance cell captive generally attracts a management fee of between 3.5% to 5% depending of premium volume.

Microinsurance cell captive license allows for the following maximum limits to be written:

Short-term products       –  R300 000

Life Products                    –  R100 000

The short-term insurance products include Motor, Property, Agriculture, Legal Expenses, Consumer Credit, Accidental Health and Reinsurance. The Life classes cater for Risk (death and disability), Credit Life, Funeral and Reinsurance.

The microinsurance cell captive insurer provides the following services to the cell owners:

  • Risk and Compliance Services
  • Actuarial Services
  • Product Underwriting including sign off of policy wordings
  • Access to reinsurance capacity

Microinsurance license is praised for its ability to propel innovation and condense specific insurance market needs.

Maksure Risk Solutions brings a very unique skill and capability that assist microinsurance cell captive owners to run a legitimate insurance facility whilst also benefiting from the incubation efforts to equip all fledgling license holders into fully functional cells through an intensive skills development and knowledge dissemination program.

Maksure Risk Solutions provides the following services to the microinsurance cell captive owners:

  • Conceptualization of the microinsurance cell captive, that is building the case and business plan
  • Product design and pricing
  • Collating and collecting the legal documents required to incorporate a cell
  • Due diligence and domiciling to the cell captive
  • Negotiations with Cell Captive insurers on capital and management fees
  • Cell Captive administration
  • Reinsurance placements

For more info regarding our Risk Financing and Cell Captive solutions, contact our Risk Financing specialist team – Zanele Mswela on Tel +27 11 805 0086 or Email: info@maksure.co.za.

About Maksure Risk Solutions

Maksure Risk Solutions is an Afro-Global independent specialist insurance and reinsurance broker with business footprint in Africa, Asia, East & Western Europe, South America and the Caribbean. We provide innovative and tailor-made risk solutions in Insurance and Reinsurance as well as Risk Financing and Actuarial Consulting geared towards capital management and strengthening our client’s balance sheet. Maksure is also one of the major players in Captive Management (Establishment & Management) in South Africa, Mauritius, Bermuda and various other jurisdictions. We have access into the Lloyds of London with a deep understanding of African markets. Our global nature ensures that our clients access quality capacity as well as some of the world’s latest thinking and solutions