South African Banks that Do Insurance

Which South African banks offer insurance, and how does the insurance you can get from your bank work? We look at a current breakdown of all the cover options available at South African banks.

Do All South African Banks Offer Insurance?

Most South African banks offer some form of insurance, but not all banks offer insurance products directly. Many institutions partner with insurance brokers or financial institutions that already offer insurance. The South African insurance industry is highly competitive, and the products on offer can often be fine-tuned to the consumer’s needs.

For example, Mercantile Bank has a joint venture with Commrisk Insurance Brokers. Their insurance products are not directly from the bank but offered through a brokerage. This means the company covering you will be another insurance company selected by the brokers.

What Types of Insurance Are Typically on Offer?

The most common insurance type that banks offer is life insurance, specifically credit life insurance and cover for loans. This makes sense, as credit life insurance is designed to cover your debt should you pass away. Since your debt is to the bank, having this product is logical for them.

How Does Insurance from Banks Work?

How your cover works depends on the bank. Essentially, insurance companies need significant capital to back their ability to pay claims. Some newer companies lack this and are underwritten by larger firms.

Discovery is a prime example. Discovery Bank does not offer insurance as a standalone bank entity, but it is part of the Discovery Group, which includes dedicated insurance arms. When you bank with them, you access cover through the group's specific insurance division.

Is Insurance from My Bank Better?

When you get a credit card or loan, banks may include coverage that sounds obligatory. It isn’t. You could get insurance for your personal loan online by comparing different providers. Insurance from your bank is not inherently superior to standalone insurance.

Benefits of Insurance from Your Bank

The primary benefit is administration. Consolidating your car, home, and credit life insurance with the same bank where you hold your mortgage and savings allows you to manage everything on a single platform.

However, while having one point of contact is simpler, you will often find better benefits and lower premiums by shopping around and comparing expert insurers who focus solely on risk products.