The funeral industry trend is characterized by exorbitant costs, informality, non-compliance and corruption and many funeral parlours are operating without certificates of compliance.

Combined Funeral Holdings Limited (CFH), a public company that acquires and operate businesses within the funeral industry plans to change that.

These are some of the identified market failures and abuses in the funeral services market that the company wants to tackle to create value to customers: 

1. Monetary benefits: existing provisions in the Long-term Insurance Act require funeral insurers to offer policyholders the option of a monetary benefit. This is however not enforced, and evidence collected through focus groups and the survey of funeral parlours suggests that very few funeral parlours (with the general exception of parlours affiliated to formal insurers) offer clients the option of a monetary benefit. Where they do offer this option, it is not made clear to the client, or the package is structured in such a manner to make it seem better to take benefits in kind. 
   
   
2. Price behaviour: funeral parlours define their benefits in terms of the funeral service, to which a nominal value is attached. The value applies to the whole package and is not broken down by the separate items included in the package. This makes it very difficult for the consumer to know and compare the true value of offerings amongst the various potential providers. 
   
   
3. Set funeral package: at the time of death, individual components of the funeral package are not negotiable downward, and the client can only upgrade to more expensive options (usually at substantial cost). If unhappy with a particular component, the client cannot opt to exclude the component in question in favour of money. If the client wishes to replace a component with one that was bought elsewhere (e.g. a different coffin), they are allowed to do so, but the funeral parlour will not refund money on the coffin that will no longer be used. 
   
   
4. Lack of competition: the effect of the product structure and the absence of a monetary benefit option results in severely restricted competition in this market. Funeral parlours only compete in terms of how impressive the funeral display is, but not on the value or cost to the client. The way in which products are structured prevents consumers from reducing the cost of the funeral by a more careful selection of components, and marketing of products exploits cultural vulnerabilities with regard to the need for “dignified” funerals. The combination of the above dynamics results in a substantial welfare loss to consumers and the maintenance of artificially high funeral costs. 
   
   
5. Forfeiting of benefits: in some cases market structure results in consumers simply forfeiting their benefits. For example, one of our research respondent contributed to a funeral parlour in Carletonville for 20 years. When she left the area, the funeral parlour refused to continue covering her, as they would not do a funeral service outside of Carletonville. As a result, she was forced to forfeit the policy she had and find a new parlour. Another participant in our research was covered under each of her three children’s policies with separate funeral parlours. As the parlours only offered benefits in the form of services, two of the children’s policies will be forfeited with no cash alternative.

According to Fischer Khambule, CEO of CFH Limited, “CFH considers the following 5 aspects as key to our business proposition;”

• High costs of funeral services and goods
• Set (bundled) funeral packages that are not negotiable downward
• Exploitation of grief for profit by funeral homes.
• Underserviced funeral homes in townships and rural areas.
• Fiduciary risk – the abuse in both the informal and formal funeral insurance market.

“Through our economic resources, talent and skills of our people and our service capability, our customers can expect to benefit from;

Added innovative products and services that enhance quality.

Our branch network, services capability, distribution centres, storage and handling facilities.

Reduced costs of funeral services and goods and our prudential oversight of their funeral policies”.

easiPol, the market leading insurance administration solution from RubiBlue, has officially recorded six million policies as of August 2018.

The web-based subscription management platform has played a pivotal role in the effective management and control of policies and subscriptions in the South African space and continues to show growth in the current economic climate. “It is an incredible achievement to have reached six million policies with our easiPol platform,” says Chris Ogden, CEO, RubiBlue. “The platform continues to grow in reach and capability and is the only product of its kind that services this market.”

easiPol is designed to support the needs of funeral administrators, insurance underwriters and subscriber-based service administrators. It’s rich feature set minimises risk while maximising efficiency. The secure platform prevents theft and fraud while the customisable framework assures customers of a tailored solution that fits their unique requirements. easiPol’s functionality is crafted to make policy management, control and collection seamless and effective, giving both the industry and its customers peace of mind.

“easiPol is a simple and effective tool that reliably serves the needs of funeral administrators, insurance underwriters and a variety of subscriber-based service administrators,” says Ogden. “It allows for these markets to effectively manage their clients and their business operations with secure administration and payment across multiple platforms within a proven business model using proven market-leading technology.”

To find out more about easiPol and how it can work with your business visit www.rubiblue.com, call27 (0) 861 48 48 99, or email This email address is being protected from spambots. You need JavaScript enabled to view it..

Signing on average 20 new contracts per month with insurance providers and funeral homes across southern Africa, RubiBlue is experiencing rapid growth through its EasiPol product alone.  

"The finance sector is closing in on fraudulent activity, and consumers want peace of mind that their investment is secure," remarks RubiBlue MD, Chris Ogden. “EasiPol is a solution for both scenarios, and as a result, our clients are getting improved customer loyalty, and their policy holders are getting better service."  

This growth equates to an additional 100,000 new policies running through its system per month, bringing the total to 4.3 million and R320 million in monthly collections. “This growth is all in addition to the organic growth from our existing clients, an addition 52,000 policies per month are organically secured and processed using EasiPol,” adds Ogden.  

The rapid increase in data collected through the policy management system is also proving valuable in better product structure for clients and places RubiBlue in a position to diversify into the data sector. "Few South African data companies exist, most have merged into larger firms in the UK and US," says Ogden. "Being able to analyse the anonymous data we have current insight into the average age policies are taken out, the male/female ratio, the number of dependents and the average age of death as an example."  

With the diverse cultures throughout Africa and the EasiPol presence across the continent, it is working with potential partners to enhance product offerings, encouraging financial literacy and making it easier for the unbanked to access financial services.