Knowledge is power: why South African youth need an insurance education

Share this News Post.

Franklin D Roosevelt wisely said: "We cannot always build the future for the youth, but we can build our youth for the future." Our technological and digital landscape is evolving incredibly fast. This has radically changed the nature of the risk landscape, specifically for the youth of South Africa.
Bringing Roosevelt’s words to life: our youth are the drivers of technological movements in the country. They need to be educated about insurance and how it works as a crucial life skill.

This education involves understanding how to reduce risks by integrating insurance into their financial planning as early as possible. This is a crucial part of developing financial literacy and nurturing a sense of responsibility, which will ultimately set up our youth for a financially stable future.

The risk that stands out in today’s insurance landscape are cyber incidents (or cybercrime), which are a direct result of our technological and digital evolution, and is deemed the top risk for South African businesses in 2022.

Karen Rimmer, Head of Distribution at PSG Insure, details how the rise of digitisation goes hand in hand with a significant rise in cybercrime, with South Africa now ranking as the third-highest cybercrime destination in the world.
“The most common cyber-attacks involve ransomware, identity fraud and the theft and sale of data” Rimmer explains.
The rise of digital industries such as eSports and virtual reality (VR) as well as their associated risks, has emphasised the need to educate young people about how to mitigate their unique risks with a combination of cyber insurance and risk management practices.
These fraud and data theft risks also apply to the online shopping sector in South Africa, which has boomed in the wake of the Covid-19 pandemic. According to Payfast’s latest reports, the fastest growing group of online shoppers are South Africans between the ages of 18 and 24, with 100% increase in traffic. This means that high quantities of import data (such as personal information and payment details) are being shared online, exposing online shoppers to many different cyber risks.

“Cyber-hygiene” is the term that most accurately describes the principles and practices that young people will become more dependent on as their lives become more and more digital. Rimmer mentions the key component to maintaining cyber-hygiene:
Cyber insurance is a key component of effective risk management and provides individuals with a way to protect data and ensure that the integrity of digital and computing assets is maintained.
A good place to start educating our youth about the role of short-term insurance, is to make sure they have their facts straight. “This can be done by contacting an advisor to assist in any insurance processes. Thereafter, it is key for parents to help their children understand what a risk profile is. A risk profile is unique to each individual and a number of factors such as age, claims behaviour, daily travel habits, where they live and how they store their valuables are taken into account to determine their level of risk, and ultimately their insurance premium,” concludes Rimmer.

It’s a natural part of youth to think “this is a future me problem” – to say to yourself that you can start doing this later. But the reality is that time is the single most important thing in our control. South Africa’s youth need to be educated on how to lessen cyber risks by incorporating insurance into their financial planning as soon as possible – their future self will thank them for it.

Related Articles

Cutting costs to survive a recession: leave business insurance for last

It seems as if 99.9% of South Africans are having the same conversation – on repeat – with friends, partners and colleagues. It centers around our collective anxiety about whispers of an upcoming recession, rising petrol and food prices, and what the uncertainty regarding global financial markets means for our standard of living, our jobs, and our business.

KZN floods: how the insurance industry can better prepare for the next one

The devastating floods that rocked KwaZulu-Natal (KZN) in April 2022 were some of the worst experienced in recent history. Over 450 people lost their lives, hundreds of homes were destroyed, and businesses experienced monstrous losses across the board. Small and medium-sized enterprises (SMEs) were the hardest hit because of insufficient insurance coverage and preparedness.

    How do brokers decide if Premium Finance is right for their clients?
    Brokers should consider Premium Financing for all their clients that have sizeable or complex insurance policies.