Dominique Taylor, Deputy Editor, COVER

Yesterday saw the premier of the South African Funeral Industry Summit (SAFIS). Hosted by 360 Administration and Systems, the summit was a huge success with 300 in-person and over a 1000 online registered attendees. The day saw industry leaders, compliance experts, and technology specialists gather to explore the evolving landscape of funeral insurance in South Africa. The discussions addressed key issues such as regulatory compliance, fraud prevention, digital transformation, and the future of payment solutions. This article highlights some of the critical takeaways from the summit.

Compliance: A Cornerstone of Industry Sustainability

Regulatory compliance is no longer a mere legal obligation but a fundamental aspect of business sustainability. Many funeral service providers continue to operate without proper licensing, exposing themselves to significant regulatory risks, including penalties and reputational damage.

The Financial Sector Conduct Authority (FSCA) and Prudential Authority have intensified their enforcement efforts, with 12 funeral parlours fined and multiple directors debarred in the past year. Key recommendations included:

• Obtaining an FSP license or becoming a juristic representative to operate legally.

• Ensuring proper underwriting through collaboration with licensed insurers.

• Implementing robust risk management frameworks to mitigate regulatory risks.  

To facilitate compliance, the FSCA will host workshops in early 2025, providing a crucial platform for industry engagement.

Fraud Mitigation: Addressing a Persistent Threat

Fraud remains a significant concern within the funeral insurance sector, directly impacting claim ratios, premium pricing, and overall industry stability. Fraudulent activities, including fake policies, duplicate claims, and unauthorised premium collections, were identified as major challenges.

To combat these issues, experts emphasised the need for:

• Robust KYC (Know Your Customer) protocols to verify client identities.

• Biometric verification technologies to enhance policy authentication and fraud prevention.

• AI-driven fraud detection systems capable of identifying suspicious transactions in real time.  

Investing in these measures will enhance trust and financial integrity within the industry. ‍

Digital Transformation: A New Era for Funeral Insurance

The industry is shifting from traditional, paper-based processes to automated, AI-driven solutions, enhancing operational efficiency and reducing administrative costs. Notable innovations discussed included:

• Biometric authentication for seamless onboarding and claims processing.

• AI-powered claims assessments, reducing processing times from days to minutes.

• Integrated policy management systems, minimising manual data entry and errors  

These advancements present a unique opportunity for funeral insurers—both large and small—to enhance customer experience and streamline operations.

Innovative Payment Solutions: Meeting Consumer Demands

With the rise of digital wallets, mobile payments, and real-time transactions, funeral insurers must adopt flexible and secure payment solutions to accommodate diverse consumer preferences.

Key strategies include:

• Multi-channel payment options (debit orders, EFTs, mobile payments, and cash alternatives).

• AI-driven payment automation to improve collection rates and reduce non-payments.

• Tokenised payments and embedded finance, ensuring seamless policy renewals and improved premium collections.

Embracing these innovations will enhance payment security and customer convenience while reducing administrative burdens.

In conclusion

The summit underscored the critical role funeral insurance plays in South African society, providing financial security and dignity in times of loss. However, the industry must navigate challenges such as fraud, increasing regulation, and digital disruption.

To ensure long-term sustainability, funeral insurers should:

• Prioritise compliance and ethical business practices.

• Invest in fraud detection and prevention technologies.

• Leverage digital transformation to drive efficiency.

• Offer customer-friendly payment options to enhance accessibility.

• Collaborate with industry stakeholders to promote growth and stability.  

The Funeral Industry Summit provided a vital forum for discussion, but the real challenge lies in implementing these insights to future-proof the sector. The industry must now take proactive steps to build a more secure, efficient, and accessible funeral insurance market for all South Africans.

Are you prepared for the future of funeral insurance? Now is the time to evolve, innovate, and lead.

‍