Old Mutual Life Botswana intends to shake up the local insurance industry

Old Mutual has officially launched its subsidiary Old Mutual Botswana Life Insurance Company with a goal to participate more meaningfully in growing the local economy and improve the lives of Batswana.

Headed by the youthful Thebe Modikwa as its Managing Director, Old Mutual Botswana Life will work to shift public perception of life insurance from a simple funeral policy and short-term goal, to a holistic tool that can be used to preserve wealth and give the next generation a better start in life.

During the company launch at the Phakalane Golf Estate this past week Modikwa put questions before the   press and stakeholders. “Does Botswana need another life insurance company? With a population of as little as over 2million served by the current eight life insurance companies, can that be more than enough?”  According to Modikwa the numbers can be deceiving.

Modikwe further elaborated that the life insurance market today, can be described as an oligopoly. “Oligopoly is a market structure in which a small number of firms has the large majority of market share. An oligopoly is similar to a monopoly, except that rather than one firm, two or more firms dominate the market.”

According to the insurance industry regulators’ latest annual report, NBFIRA of the eight life insurers the top two life insurers share a chunk of 87.5 percent of the market share. Looking at this, Modikwa said clearly there is no real competition.

It is in backdrop of these statistics that, Old Mutual Life Botswana believes life insurance is not just about funeral expenses and the elaborate sending off of a loved one.

As he explained and shared his life experience during University days, Modikwa said, ”Life insurance is a tool for preserving wealth and giving the next generation a better start in life than the previous one. “When I was at university I had a friend who stayed in his own flat. I stayed in a flat too. I paid rent.

He owned his flat! Given that we were both young and none of us were working, how did he get to own his own flat and avoid paying rent?” On closer inspection it was revealed that this flat was made possible by funds arising from a life insurance policy for one of his grandparents. “This friend of mine clearly had a leg up in life over me.”