Business and philanthropy can co-exist and brothers Atholl and Philip Tomlinson, co-founders of internet-based life insurance company Different Life, have incorporated this dual business model.
Different Life. PTY (Ltd) is the “business engine” that sustains their online crowdfunding philanthropy platform Different.org, explains CEO Philip Tomlinson. “The non-profit side is the focus. You can’t do anything without resources. The resources come from the for-profit side,” he says.
Recognising that NGOs cannot scale to address the magnitude of social problems, combined with the technology gap in the life insurance industry, they decided to launch a technology-driven company that focuses on maximising impact over profit. “The offering is a chance to get a top quality insurance product and at the same time to have a very material impact on South Africa,” Philip told Finweek.
Different Life is structured along the lines of internet start-ups like Whatsapp or Uber as opposed to traditional financial services businesses, says Philip. It is a registered intermediary and is underwritten by Old Mutual Alternative Risk Transfer Limited and reinsured by Hannover Re. Life insurance policies started being sold in November 2014 and the company was officially launched on 12 March 2015.
Different Life takes advantage of the cost efficiencies of technology by offering a digital experience to the customer to engage online and buy financial services products, says Philip. There is also a call centre for customers to contact consultants who provide information about the product, but not advice. However there is potential in the market to incorporate technology-supported advice in future, he says.
The product is competitive with industry players, says CTO Atholl Tomlinson. The pricing is competitive and the process is seamless, simple and quick. “It literally takes you 10 seconds to get a quote and 10-15 minutes later you have your policy, which nobody else can do,” he says.
Life insurance with a difference
The Different Donation is the idea where the first premium and subsequent annual anniversary premiums of a policyholder is allocated to a project of their choice on Different.org. Unlike other platforms which take a percentage of money donated to a cause as commission, Atholl explains the total of the proceeds go to the cause.
Clients are given feedback about the projects via social media, this includes mini-documentaries. This serves as a “cost-effective” way of life insurance marketing which will raise more capital for Different.org projects by recruiting more clients through “shares” on social media.
Life insurance is a necessity. Something everyone should have regardless of what the economy looks like.
“We think it’s a very nice model in terms of the synergy of the for-profit and the non-profit working together, to both make a difference in South Africa and hopefully be a successful business,” says Atholl.
Current, turbulent economic times didn’t deter them from launching the product which includes life and disability cover up to R10m, monthly salary protection up to R90000 and critical illness cover up to R5m. According to Philip, there I still opportunity for growth, especially with an “efficient business model”. “It’s not a luxury purchase. Life insurance is a necessity. Something everyone should have regardless of what the economy looks like,” he adds.
There are future plans to expand adjacently to other financial services beyond life insurance. As for Different.org, they hope it will grow from a “crowd-funding philanthropy platform” to an “expertise hub for philanthropy”, says Philip.
*This article was featured in Finweek magazine.