THE Insurance Institute of Zimbabwe (IIZ) says funeral assurers need to embrace strategies to reduce the impact of social media on the sector amid fears that social media could undermine the traditional business model of firms.
The call comes after the insurance and pensions regulator recently flagged the continued concentration in the funeral business by life companies saying they were also ignoring the glaring risk social media had on this business.
For example, people can easily form a WhatsApp group when someone dies and make contributions to bury the deceased instead of going through the funeral assurer’s route.
The same applies to crowdfunding platform GoFundMe and other social media channels.
IIZ general manager Davison Choeni told NewsDay Business that social media has transformed how people approach financial support for funerals.
“Platforms like GoFundMe and WhatsApp enable quick, community-based fundraising, making traditional funeral assurance less appealing for some. The ease of access and immediacy provided by social media can undermine the traditional business model of funeral assurance. To stay relevant, funeral assurers need among other things to integrate digital services and consider incorporating social media into their service offerings, by creating platforms for community support or facilitating crowdfunding for clients,” he said.
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Choeni added that developing flexible funeral plans that adapts to changing consumer needs and preferences would help maintain relevance.
He said funeral assurers should also engage in outreach programmes to educate potential customers about the benefits of funeral assurance compared to social fundraising.
Insurance and Pensions Commission director for Insurance and Micro insurance, Sibongile Siwela recently said these social media platforms were going to take up these big businesses and this should jolt insurers into action.
“There’s concentration in the funeral business by life companies, just in the same way that short-term companies’ business is concentrated in motor vehicle insurance. So, if tomorrow people are not taking funeral insurance, it means there’s no business, there’s very little business. What I’ve seen is that those things replace insurance. People just form a group where they contribute when there’s a need. After that, we don’t contribute and you are no longer in business,” she said.
“So, if more and more people use social media it’s not good. I’ve seen it in the funeral business, people contribute. And this is driven by technology and its moving very fast. So it’s now just a matter of time.”
Disrupt Media chief executive officer Ryan Thogmartin is on record as saying that funeral directors needed to set goals that their social media outreach should achieve to see the value of social media.
“Funeral homes struggle with seeing the value of social media marketing and that’s understandable. Too many ‘automated’ approach options exist in this profession that fail to show the value social media offers. Instead, these automated options are designed to distribute content for the sake of content distribution. For funeral directors to see the value of social media, they must set goals that their social media outreach should achieve,” he said.