Republic Life – Making peace of mind digital

What do you do when the worst happens? What do you do in the case of the death of a relative, one who may be the sole breadwinner of the home?

What can you do for your family if the worst happens to you? How can you take care of the people who are left behind?

This is the purpose of life-insurance policies – to provide an answer to these hard questions.

While some may think insurance only benefits companies and not their customers, insurance is actually a plan that would benefit the ones you care about most, by allowing you to trade the risk of a disastrous loss in the future against an investment made today.

But for many, insurance is out of reach. Expensive plans with high premiums and the perceived pressure to buy from agents, common in traditional insurance models, may deter prospects.

Republic Life Insurance was established in 2021 and went live on its online platform in February this year.

Its main goal is to bring the peace of mind that comes with insurance coverage to those who are in need, but may not be able to access it.

Speaking to Business Day at its office on Murray Street, Woodbrook, Robert Soverall, managing director of Republic Life Insurance, said it is the first of its kind, providing a full, direct-to-customer insurance experience with an end-to-end distribution model to Republic Bank customers and non-Republic Bank customers alike. With no agents, low premiums and simple, easy, applications, made on its digital platform, Soverall said Republic Life is expanding the reach of the insurance sector to cover those it could not cover before.

“Because of the simple way we are bringing it across, we think people will understand what they are getting, the need for life insurance – and hopefully it will encourage people,” he said. “People who think it is too expensive or it is not for them, we are expanding to make sure we reach them.”

Making insurance easy

Sabrina Nath, manager - life insurance expansion and implementation, said Republic Life sought to find out the "pain points" for potential insurance customers through focus groups held a few years ago.

“Across all the cohorts, one of the main pain points was that agents keep coming to push business on to them that may not necessarily be what is best for them, but sometimes would be best for commissions,” she said. “A lot of the cohorts also wanted that digital interaction; but they also wanted the flexibility to reach out to someone and talk to someone before they make a lifelong financial commitment.”

She said while Republic Life has several channels, including live calls, e-mail or a chatbot, the digital platform, republiclifett.com, is its main portal.

When customers go onto the site, they can select their plan and the website will provide a list of questions including age, gender and smoker's status.

An underwriting algorithm calculates your premium based on your responses in real time, and provides you with a quote.

“Typically, in other insurance companies, an agent will ask you these questions, and when you get back into the office, underwriters will assess and bring back a premium,” she said.

With this model, if the customer is interested, they will click the button that says “full quote” and the algorithm will make a more accurate assessment based on medical questions which may include their family’s medical history, height, weight etc.

The website will also require you to upload a photo ID and a copy of a utility bill, and a biometric app will scan your face to ensure that you are who you say you are. You can then make your first payment by credit card or debit card through any bank account.

What's on offer

Republic Life has two products on offer. The first is the Term To 100 product, which protects loved ones in the event of one’s untimely passing by providing a tax-free lump sum to help pay for mortgages, tuition, funeral bills and everyday living expenses.

The Whole Life product is described as a permanent life insurance policy that gives coverage for the duration of the customer’s life. Customers can choose to pay premiums until the age of 65, 75 or 100 for life-time coverage.

The Whole Life product also has a savings feature with a guaranteed annual rate of return of four per cent. This cash value can be accessed while still alive if you surrender your policy after three years.

Manager Jihann Miller said the whole life product has become the more popular of the two products because of its savings feature and guaranteed cash value rate.

“No one is doing guaranteed rate of returns any more,” she said. “Other insurance companies have savings components and they have a cash value to it but it is not a guaranteed rate of return.”

She added that paying premiums over a shorter period could be beneficial to some because the cash value accumulates faster.

“The rate of return could be significant, especially if you are saving for a number of years,” she said.

The digital difference

Thanks to its digital platform, Republic Life Insurance has been able to eliminate significant costs that would increase the premiums in other insurance companies. Republic Life has no medical exams to pay for, no agents, no commissions and no monthly fees.

Soverall said Republic Life Insurance’s distribution method allows it to be accessible to lower- and middle-income customers who need it most.

“There is a notion out there that insurance is only for a certain class of people, but it is not,” he said. “I believe middle-income and lower-income earners need insurance more than high-income earners. For higher-income earners, as much as families will be devastated, many would have money saved so their family could continue to send their children to school, so they could pay rent, so they could eat.

“Very often middle- and lower-income earners do not have that level of savings to give them a buffer when their primary breadwinner is no longer there.We are trying to make insurance accessible and affordable to everyone, and it could be a game-changer.”

Minimum coverage for the whole life product, Business Day was told, amounts to $150,000 and the maximum amount is $750,000 for people ages 18-45 and $500,000 for ages 46-60. However, Soverall said in one quote for a 20-year-old person, the premium was “cheaper than a box of KFC.”

Soverall added that data protection is key to the company’s operations.

“As part of the RFHL group, which has been around for just over 190 years, we have a robust cyber security plan and provisions. We adhere to group standards and we are a regulated company under the Central Bank, which has certain requirements. We have and maintain very high standards for cyber security."

Enriching the insurance industry

Banks entering into insurance is not something new. Up to 30 years ago, banks with significant capital and backing would either search for an insurance company to act as a subsidiary, or create their own policies through bancassurance – an arrangement between a bank and an insurance company which allowed the insurance company to sell its products to the bank’s client base.

However Paul Traboulay, immediate past president of the Association of TT Insurance Companies (ATTIC), said banks such as Republic and Scotiabank are establishing insurance companies fully registered with the Central Bank.

He said the introduction of these companies can enrich the industry, making more people aware of the value of insurance and accessibility of affordable coverage.

“The difference between traditional insurance companies (such as Guardian Life, Maritime etc) is that with traditional insurance, the distribution offerings were large.

“The distribution model was also different – traditional companies use career distribution, which involves insurance agents.”

He said banks use technology for distributions, which proposes to be cheaper, more convenient and facilitates ease of payment.

Soverall said expanding the reach of the insurance industry is part of the intention of Republic Life.

Guardian Group, in correspondence with Business Day, said the introduction of these products is welcomed as it brings greater appreciation for and understanding of the industry.

“Insurance is a continuous journey and partnership with our clients,” the group said through its official channels. “While digital offerings may cater to simpler products with limited coverage and streamlined underwriting processes, clients seeking comprehensive coverage and personalised protection often prefer consulting with our qualified financial advisors.”

The group said studies have shown that in the US market, bank-based insurance saw modest growth last year, but exclusive agent models have grown substantially. Guardian Group said this may have a similar effect locally.

“The introduction of non-traditional players is expected to provide consumers seeking straightforward products with additional choices. This diversification ultimately fosters greater competitiveness within the industry, recognising that different service offerings will appeal to different segments of the market.”

Business Day spoke to Republic bank customers, some of whom were just finding out about the new products provided by Republic Life.

One Port of Spain customer said he would not try the product, as he was sceptical about online products overall.

“From my experience, once you are doing those things, there are some loopholes,” he said.

Another customer, from St James, said she had just heard about the insurance products, but thought it was an interesting opportunity for people comfortable with technology.

“I am a little old-school, so I like to walk into offices and go to the bank. I am not lucky with the modern technology.

"But it may be for a betterment, because people don’t like walking around with cash any more."

One adventurous customer, from Cocorite, said, “I saw the product last week and I tried them. I tried other people and they still gave me some issues, so I will try this one and see.”