According to South African Savings Institute there is a need for a strong savings culture. The argument is that this would boost the economic growth of our country. Household Savings as a percentage of GDP is at 1.7%. The problem is that households are not saving enough to fund needs, whether it is consumption or investment.
Banks strategies has been has been on lending to low-income which does not solve the problem. This always results into huge borrowing. Banks strategies encourage consumption as opposed.
The question is whether insurance companies can come to the party with products that encourage savings.Funeral insurance products are such a products that assist households during bereavement in the family. It is clear that there is some understanding of insurance products. There is a need to educate households on saving products where policyholders benefit from investment profits.
There is a case for savings linked products (insurance) meant for the mass market