Know Your Money with Bronwyn Waner and Craig Finch
Know Your Money with Bronwyn Waner and Craig Finch
150. Reinventing Life Insurance: How BrightRock Matches Policies to Individual Needs
Sean Hanlon, the visionary founder of BrightRock, takes us on a journey through the transformation of life insurance in South Africa. Drawing from 36 years of industry experience, Sean reveals how questioning traditional approaches led him to create a revolutionary product that matches coverage precisely to each client's unique needs.
The conversation delves into BrightRock's three-pillar philosophy that has disrupted the insurance landscape. First, efficiency—designing coverage that aligns with specific time-bound needs rather than forcing clients into whole-of-life solutions. Second, flexibility—allowing premiums to be reallocated as life circumstances change, like transferring childcare coverage to estate planning when children become independent. Third, certainty—providing predictable premium increases at fixed percentages, eliminating the guesswork that plagues traditional policies.
Sean candidly shares the challenging experience BrightRock endured during COVID-19, when they paid out 1.48 billion Rand in claims over 24 months—exceeding their entire previous decade of payouts combined. This unprecedented challenge tested their business model but ultimately validated their approach to risk assessment. The discussion also highlights BrightRock's client-centered innovations, like paying dread disease claims upon diagnosis rather than waiting for end-stage symptoms, and how their partnership with Sanlam has provided stability while preserving their unique market position.
For anyone interested in understanding how financial products can truly serve individual needs rather than forcing customers into standardized solutions, this conversation offers valuable insights into creating insurance coverage "as unique as your fingerprint." Visit www.growthfp.co.za to learn more about our approach to financial planning that puts your specific needs first.
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Hello everybody, welcome to Know Your Money. I'm Bronwyn Wayner.
SPEAKER_02:And I'm Craig Finch, and we are from Growth Financial Planning. We hope you enjoy our podcast. Hello, everybody. We're very, very privileged to have Sean Hannon in here. Sean, thank you so much for coming, taking your time on your busy schedule. Sean is the executive director and founder of Bright Rock. And Sean, maybe our clients and our friends don't know who Bright Rock is. They've heard of them. They see that you support the wrong rugby team, or maybe the right one in Western province. They are doing well, I must say. But can you tell us more about Bright Rock and your journey? Because I think you and I come back together a long way from the Liberty Days and how it's become a great company called Bright Rock. If you can give us more insight.
SPEAKER_00:So if something happens to me today, I get ill or God forbid I die, you know, do I have a bond that I have to protect for my family for? You know, what kind of a state duty do I have? You know, so my I've I have various needs that are short, medium, and long-term needs. But the policies that are used then to structure the solution to those needs, okay, is really quite one-dimensional. So in other words, okay, I buy a whole of life policy. And that means that, and I started in the industry as a quotes clock. So I worked out that when you work out your RAND cost per melee, so your RAND cost per 10,000, it's based on your summer shirt over duration and over the shape of the cover. Okay, so if you've I put all my needs into a one-dimensional block of cover, costing it to whole of life, which could be 108, 103, 104, 5, 110, whichever the company chooses, then I effectively am paying more today, okay, for cover that I potentially will not use in the future. And so our view was to why could we not design a life assurance policy that could actually platform advice and match each need? So my bond is 20 years, so we match those 20 years, okay? My income needs, okay, my number of paychecks I'm I'm I need to protect. If I'm 40, if I'm gonna retire at age 65, it's 25 years. My last year of work, I've got one year's worth of paychecks to protect. And bringing that uh to the marketplace provides our very first pillar of of our design behind the product, which was efficiency. So you can create a far more efficient product if you can match each need precisely. The second thing is what if I outlive that need? In other words, I've paid off my bond now. Our second pillar of our product was flexibility. So you have the ability to take your premium, okay, which which in our case grows at a fixed percentage, okay, and it's not an it's not an illustrative premium, it's a fixed percentage. You can use that premium to go and buy other cover if you want. Um, so I'll give you an example. Okay, my oldest son has turned 24, so my childcare need for him is no longer needed, okay?
SPEAKER_01:Hopefully. You're lucky.
SPEAKER_00:I've got four of them, and that's bank draining. Anyway, but nonetheless, okay, so I've taken that premium of his and I've transferred that premium into your into whole of life cover for my stay. So that's the second pillar. And then I think very importantly is this the third pillar, which is the issue around certainty. You know, so if you ask a person what will, if your benefits go up next year, what will your premium go up? Okay, they can't tell you for with in certainty what it will. You know, with us, it's a fixed percentage. Um, and that's very important because sustainable life assurance is important. Because if I'm overcharging you for cover today, you're not going to use in the future. But I'm creating a premium that you can't predict and that's unsustainable. Okay, I'll kick you out of the system when you're older and a bigger risk. Okay, so so so yeah, so that so we wanted it to bring those three pillars to the marketplace. Um, and it was a fundamentally different um shift. You know, I've been Craig Not in this industry as long as you, but I I think I've been in the game uh no, it's not showing, but uh 36 years. Um and and I and I've loved the industry. You know, it's it's it's it's it's a passion of mine. Um and I wanted to provide a product that could that could work with advice giving.
SPEAKER_02:So your journey started where? You left Liberty and then what happened?
SPEAKER_00:Yeah, so as I said, I started at Liberty as a quotes clock. Um I applied to be a broker consultant, but in those days we had to write uh uh psychometric tests and I and I and I failed. Um you can imagine. So then I said, I'll take anything. So this was a great grounding for me, right?
SPEAKER_01:And then uh and and I just shows how these tests are so obscured.
SPEAKER_00:But anyway, nonetheless, we wrote it on the day. But um, but yeah, so then then uh then I um I I I had a great career at Liberty and I and I I met amazing people. Um and those same amazing people uh started an amazing organization called Discovery. Um and uh I was very, very privileged uh in 2002 to to work with them and join them and uh and and to be part of what is in my opinion, um sounds like I'm selling them, aren't they? Um an international success, let's be frank. Yeah, and South Africa should be proud of the amazing business that Adrian Gore built, you know. Um and it was it was actually it was actually when I was privileged to to do do work in the UK for for discovery, which is for what is today vitality, that I actually started to question, you know, this whole phase act came out, and in the phase act, if we if if uh when I wrote my RE exam, there's six uh twice, uh there's six uh steps, okay, in in the in the financial planning process. In the financial planning process. And I only wrote it twice, not because I'm stupid, it's just very enthusiastic. But um but uh but step two says you must understand your client's needs. Step three says you must find an appropriate solution. And and and it was like uh it was on a plane flying back, you know, talking to a young actor called Scott Malone, um, that uh that the idea was born.
SPEAKER_01:Amazing.
SPEAKER_00:Then how did you find it though? I mean you know that was hard. Okay, so so we obviously we we went around the marketplace and and um and and and we I actually met Miles Jaffitt, um who uh is an incredible guy, you know, he's uh unassuming person. Uh he was one of the founders of Hollot. Uh and uh and he obviously ran a business, him and Johnny uh Simmons, fantastic people. Um and I put together Skullkin output, Suzanne, uh also one of the founders, Suzanne Stevens. We put we we we pitched our our our our dream of what we wanted to do. We wanted to really, really bring a product that could platform advice giving, you know, um is so important because you know if you look at uh at the at the world, it's it's moved away from institutionalization to individualization. So so if you look at our product, if you look at our our product uh structure, our our grid, if each of us around the table fills out that grid properly, we've got different incompanies. You know, you certainly don't have as many children as I've, okay. Um I hope not. Okay, but um, you know, we have I have a bond, you might not have a bond, you know, uh, and we all generate a solution as unique as our fingerprint. And that is that individualization was so core. Uh if you look at where the whole world is moving, it it really is moving into a world of individualization. And why should life assurance?
SPEAKER_02:Did Miles have the money to back you or did you do? And uh And the life license was yeah, because that's not easy to get in South Africa. Yeah, so they had a life license.
SPEAKER_00:They had a life license called Pin Africa, which we then eventually bought uh and and opened our own life license. Um we also um we we were we we were also looking to expand quite rapidly and uh and uh and and uh about eight or eight years ago we sold 51% of the business to Sunlam. Okay. Um who've been a fantastic, fantastic backer of Bright Rock.
SPEAKER_02:So they're the big daddy in the room.
SPEAKER_00:They've Yeah, you know, they've and and I I think quite cleverly on their part, you know, they they're partaking in something that there's not you know they're not doing, you know. Yeah, they haven't got the products. Correct, and and we we and we're reaching markets that they they're not in. So I think collectively for them it's a it's it's a very clever move, you know. Um also also good to have a a big daddy, as you say, Craig, you know, in the corner. Um and yeah, and I and I mean we're 15 years into the game now, you know, um we're seeing the claims pat, you know. We You were saying in COVID off air, you were telling us about that shock, okay? Yeah, I know. I mean anybody who tells you COVID, uh if I had to ever write a book, but I can't write, okay, I can't spell, but uh but nonetheless. There's AI though.
SPEAKER_01:Yeah.
SPEAKER_00:Oh, what's that? Yeah, if ever if I ever had to write a book, there would be a special chapter called COVID. Um, it was it's it it it was fascinating, right? Because um in in 2021, people you know, when Delta when Delta came around, um, you know um people started to die and and uh and I mean our claims went through the roof. In a matter of 24 months, we paid out 1.48 billion Rand in claims versus you know, which is nothing compared to what the other you know other big companies with big books paid out. But you know, for us in our 10 years into the game, to get hit with a with the hit with a pandemic, um, you know, it was it was devastating.
SPEAKER_02:It was much more than the years before.
SPEAKER_00:Well, I mean it was uh in 24 months we paid out more than we did in the previous ten years. So that just gives you a sort of a quantification of of how big uh COVID was. You know, uh I think we talk it down a lot, you know. Um a lot of people, uh you know, it was it was spectacular, you know. You know, I mean the vaccination and the anti-vaccination and the lockdown and you know, did this thing come from Mars? And you know, was it a conspiracy? And I mean it's you know, the uh the one I I mean I'd I would travel around the country and and people would and so we we we we built in covert loadings. So if you didn't, if you weren't vaccinated, we built the loading into your new business premium. And it was met with such anger. Um and people were saying, oh it was it was uh us trying to uh rip the market off and and all of that. I mean, and and and people said you know they came up with a vaccine too quickly. But I mean epidemiologists have been working on this for 150 years. Yeah, yeah. You know, so it was I I promise you, I I you're gonna have some of your podcasters um uh start stoning uh stoning me again on this tissue. But it was a fascinating time.
SPEAKER_02:Must be scary as well, because as a live company, you're not sure if you're gonna be surviving this whole thing.
SPEAKER_00:Oh Greg, you remind me of my next to Nobi. And I was running up and down the driveway because we were all locked up, right? And he used to put his head over the wall and saying, you know, owning a life company in a pandemic is not clever. You know. We still have a drink together every now and then.
SPEAKER_01:Yeah.
SPEAKER_00:No, no, it was it was an interesting time.
SPEAKER_01:And what would you say is your like why behind it? I know it is like client-based and needs. Is that the why, or is there more to the why?
SPEAKER_00:Very much the the the why is designing a product that can uh uh accurately and efficiently meet the different needs in a person's risk exposure. Okay, so that is distinctly our why. But we did other things, you know. If if you look at the issue around certainty, we we also look, you know, if you if you look at how our dread disease evolved over the years, how disability evolved over the years. And and and I have to say, you've got to give a lot of credit to discovery, you know, for a lot of that innovation.
SPEAKER_01:Um you were a part of most of that.
SPEAKER_00:I was very privileged. You know, I was I played small part, but I was privileged. But uh, but the reality is that is that you know, we looked at the amazing claims definition sets and there were still some flaws. You know, so for example, you know, why do you use activities of daily living to assess your claim, your first claim? Look, if I'm a Parkinson sufferer, why do I have to be at the end stage of that disease before my dread disease pays out? So we removed ADLs as first pass assessments, okay, and we pay on confirmed diagnosis. Now, no one else in the industry does that. Now, tell a Parkinson sufferer who's been confirmed the diagnostic, okay, that's sorry, you've got to be at the late stage of your disease before you get paid out. Pretty difficult from a consumer point of view.
SPEAKER_01:Yeah.
SPEAKER_02:So we'd like to unpack those distinguishing in the next episode. Okay. So sure, good to have you here. Thanks, Greg. So good to see you again. You too, man. Thank you. Cheers. Thank you for listening. If you have enjoyed this podcast or like to subscribe, please visit our website www.growth.co.za. The information we have provided in this podcast is our personal opinion. For more detailed information, please discuss your financial situation with a financial planner.