South African startup Sugar, introduces insurance for rural area settlements.

South African startup Sugar introduces insurance product for rural area settlements

Sugar, a South African startup has introduced an insurance product that focuses on homes in townships, rural villages, and informal settlements.

Sugar’s insurance policy covers the structure and contents of a home. Its services also include geysers and home assistance in case of services like plumbing, electrician, locksmith, and others.

Ntando Kubheka, founder and Chief Executive Officer (CEO) of Sugar, said “Traditional insurers shy away from this market because they don’t understand it. Typically the underwriting process requires valuation data which these homes don’t have in the valuation roll or the deeds office, and these homes are located in areas which are called “unstructured”, with no formal addresses”.

“There are no municipal approvals when building these homes, there are no engineering certificates, and the builders are typically not NHBRC approved. Traditional insurers also shy away from this market because there is no available actuarial data that describes this market and its behavior”, Ntando added.

Sugar home insurance costs US$109,000 for the structure and US$27,000 for the contents.

“We cover all risks including theft and accidental damage. Our customers are covered for likely events. South Africa, for example, is not prone to earthquakes so we do not automatically cover earthquakes unless the customer specifically adds this risk cover,” Kubheka said.

The startup offers vouchers at prices of wide variety of denominations to suit different budgets.

“Our shack product is designed to be a prepaid voucher which is paid for at the point of purchase and provides cover to the customer for 12 months. The customer determines their own risk.”

The startup is self-funded right now but is in the hope of acquiring a seed round with $1 million to scale its growth.

“We are a national company right now and we are able to provide cover for any customers with homes that fall within our cover limits”, the founder said.

Sugar has been in development since 2018 and is a product of GENRIC Insurance Company Limited.