The FSCA has published a three-year rolling financial education plan. One of the objectives of the FSCA under section 57 of the Financial Sector Regulation Act is to provide financial customers and potential financial customers “with financial education programs, and otherwise promoting financial literacy”. It is an area where everyone connected with the world of insurance needs to get involved.

The plan includes proposed strategic and operational developments to educate the public through traditional media, but the plan shifts focus to digital financial literacy, consumer education, and more complicated ideas like the “use of behavioural economics principles”.

What the plan overlooks is that the best way to get informed about any seemingly complex subject is through personal experience. You have to ride a bicycle, not read about it, in order to keep your balance. There are probably more people amongst what the plan calls “the most vulnerable” who better understand stokvels as part of their daily life than they understand non-life insurance. The availability of affordable, plain language and much-needed insurance cover is the best way to achieve financial inclusion and, as a result, financial literacy. For instance, when the Minister of Finance surrendered primary health insurance and day-to-day medical insurance to the Minister of Health in 2017, millions of people amongst the vulnerable were unable to obtain affordable health insurance in a competitive market. The new definition of what is group insurance in the Insurance Act added to the difficulty in spreading basic insurance as wide as possible.

The answer is not to close down insurance opportunities but to make them accessible, understandable and affordable. Those selling consumer insurance can be encouraged by regulation to do what the treating customers fairly principles requires, namely giving policyholders clear information before, during and after the time of entering into a policy.

The place to start is with insurance that is relatively straightforward and widely demanded. This includes, for example, health insurance, cellphone insurance and, at the top end of the spectrum, motor insurance. Health insurance is a good example because many of the available policies that were outlawed, and the few that were not, were worded in terms that were readily understandable as to what the policyholder would get for their money. Equally important for this kind of insurance is that the policyholder and family was frequently engaged at the point where insurance really matters, namely claims stage. The available primary and daily health benefits meant that many insured were interacting with their insurers to claim their benefits a number of times in every year. Despite this advantage for consumer education, the latest recommendations from the Council for Medical Schemes is to phase out all health insurance provided by the insurance industry. Whatever the outcome of the NHI Bill, and the universally accepted need to provide comprehensive healthcare sometime in the future, there is no reason why those who cannot afford to be members of medical schemes should not in the meantime be given their Constitutional right of access to healthcare services and, consequently, financial inclusion and literacy. Accessible insurance does not mean taking the old tried and trusted Multimark wording and turning it into better English. Nor does it consist of the overload of statutes, rules and regulations we have at the moment. It means starting from the involvement of the consumer by giving each of them a notional bicycle so that they can learn to ride for themselves.

Patrick Bracher
Norton Rose Fulbright South Africa
June 2025