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Profile: David O’Brien of Meerkat

Profile:

 

MANAGING DIRECTOR AT MEERKAT
DAVID O’BRIEN

 

 

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Can you tell us a little about yourself (your background) and how you came to found Meerkat?

I had been a product designer for Old Mutual for nearly 20 years, leading the team that delivered the Old Mutual products to the market. I felt that there was an opportunity for a business to be more client-centric and to help customers do more with their money. Meerkat will deliver a range of simple new products to the market to fulfill that vision. The credit protection product offering is the first insurance product. We are keen to partner with debt counsellors to enhance the debt review process. We feel that there is an opportunity to add value through insurance expertise and enhanced DC support such as reporting etc.

‘I felt that there was an opportunity for a business to be more client-centric and to help customers do more with their money’

Why do consumers need insurance cover while under debt review?

The NCA allows Credit Providers to insist that the obligation is covered by credit life insurance, as a condition of the loan. Some credit providers persist with their credit life through the debt counselling process, some do not. This will cause uncertainty for the customer. Meerkat believes that insurance is important as it gives the client peace of mind that all their debts will be settled. This is especially important for “living” benefits, such as retrenchment or being diagnosed with an illness such as cancer. If the client is unable to meet the monthly payment, through illness, then the CPs will terminate the plan, and that will add to the problems of the already ill client.

What is Credit Protection and Life Cover?

Life Cover is an insurance policy that pays out on your life. This might be for death, or a living benefit, as I said a moment ago. Credit Protection is an insurance policy that is linked to a loan. Most loans in South Africa are sold with credit protection insurance, and the customers are often not aware of the amount that they are paying, as they think it is just the loan repayment. If the customer is not aware of the product, then they will not benefit when they need it. Meerkat will proactively look for reasons to pay the claim.

Can debt review consumers afford it? Where do the funds come from?

The Meerkat Credit Protection plan has been designed to replace existing credit life policies from the multiple credit providers that are involved in the debt review process. We generally find that the Meerkat premium is lower than the total of the existing credit provider premiums, and we can, therefore, save the customer money. We have a unique product and advice model that allows us to selectively replace the insurance products in the plan. Therefore, if the Meerkat product is not competitive, then we will leave the existing CP insurance in place.

If the product saves the consumer money each month what can be done with those funds?

We see debt review as a step on the journey to financial wellness. The premium savings can go back into the customer’s plan. This can increase the likelihood of a DCRS solve, and can also reduce the time that the customer is under debt review. It can also be used to reduce the total monthly payment if the customer is particularly over indebted. The Debt Counsellor will control the process as to where to deploy any savings in the monthly plan.

Who is underwriting this product? Can consumers trust the product to pay out?

The Meerkat Credit Protection plan is underwritten by Old Mutual Alternative Risk Transfer. Old Mutual has been paying customer claims for over 172 years. There is no more secure company in South Africa. Consumers often forget the importance of choosing a big company that will pay their claims. Some insurance companies have gone bust leaving consumers high
and dry, damaging the reputations and businesses of intermediaries and other stakeholders that were recommending the products.

Some credit providers complain that their in-house cover has the best benefits and don’t want to accept other cover. They say it is inferior. Will this be a problem with your product?

The Meerkat product has been specifically designed to replace the full range of offerings from credit providers. We cover critical illness, compulsory unpaid leave, short time, as well as the more usual benefits like death, disability and retrenchment. We have an independent actuarial opinion confirming the superiority of the Meerkat benefits. Most credit providers are comfortable to accept the Meerkat policy. We are still in discussions with some. We have also been discussing the industry dynamics with the FSB, the insurance regulator, and believe that the customer interests will win through.

‘Meerkat will make the debt review payments for all the obligations that are covered, for up to 12 months, and the customer can enjoy peace of mind, and focus on finding employment’

What happens if consumers under debt review lose their jobs and can’t make their regular monthly debt review repayment?

If the consumer has let the credit provider insurance lapse, then, unfortunately, the credit provider will pursue them and their family in the normal legal collections process. However, if the customer has the Meerkat credit protection plan and it is a valid retrenchment claim, then Meerkat will make the debt review payments for all the obligations that are covered, for up to 12 months, and the customer can enjoy peace of mind, and focus on finding employment. An important aspect for the DC, is that we pay the claim via Hyphen, thereby ensuring that the Aftercare fees are also maintained.

What happens if a consumer under debt review gets injured and cannot earn income (for a short or longer time)?

If the customer is injured and has a valid temporary disability claim, then Meerkat will pay their debt review obligations until they are able to return to work, or for up to 6 months. If the injury persists and the customer cannot return to work, then the disability is considered permanent, and then Meerkat will settle the outstanding obligations at that time. And, again, the DC continues to receive their Aftercare fees.

‘The Meerkat team have collectively over 75 years of senior insurance expertise, it is our core skill’

Is it easy to stay in touch and make claims for clients?

Meerkat offers a dedicated call centre for customers. We can be accessed through email, telephone, whatsapp and live chat. We also offer an app, where the customer can submit their claim, and any required documentation. We also have a dedicated support model for debt counsellor partners, who can submit claims on behalf of clients, if required.

If a Debt Counsellor is not a FAIS complaint agent what can they do for their clients?

The Meerkat team have collectively over 75 years of senior insurance expertise, it is our core skill. We believe that parts of the debt counselling industry are unknowingly creating significant insurance regulatory risk for themselves, through the inappropriate provision of advice from unregistered agents. Transgressions of the FAIS Act come with severe penalties for non-compliance. We have designed the Meerkat model to deal with this. Meerkat carries 100% of the insurance process, product and advice risk. We are an authorized FSP, and know the business and are comfortable with the risk. So, once we have an agreement in place with the DC, then all they do is follow a very simple one-click process, and we do all the rest with the customer. This allows the DC to focus on their core business while knowing that their clients have security.

‘We can get a DC up and running in 24 hours if needed’

Is it labour intensive to use your product?

We have spent a lot of time designing a simple model for all parties involved – the DC, the customer, and the credit provider. We can get a DC up and running in 24 hours, if needed. We can also work in tandem with any insurance provider that the DC may already have, if the DC would like to explore alternatives.

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CONTACT INFO:

T | 021 003 4534
E | INSURANCE@MEERKAT.CO.ZA
WWW.MEERKAT.CO.ZA

 

 

 

 

 

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