Capitec Bank introduced its funeral cover product in 2018 (in partnership with Sanlam’s Centriq) as an extension of its Global One offering, capitecbank.co.za. The product gained rapid traction, contributing significantly to Capitec’s non-interest income. Below is a summary of year-by-year key metrics—mortgage plan income (after-tax profit from the policies), policies sold during each year, and active funeral policies at year-end—based on Capitec’s official reports:
Table: Capitec funeral plan income (after-tax profit), new policies issued, and active policies by financial year. Note: “Active policies” refers to the number of in-force funeral cover policies on Capitec’s books at the end of each financial year.
Year-on-Year Growth Overview
Capitec’s funeral cover business grew exponentially from its 2018 launch through 2024. Funeral plan income rose from essentially zero in 2017–2018 to R1.29 billion by 2024. This growth was driven by the rapid uptake of policies each year and improving policy retention. Key points by year:
FY2019: First partial year of funeral plan sales (from May 2018) saw over 360,000 active policies by Feb 2019 capitecbank.co.za. Capitec recognized R54 million in net income from the new funeral product in this startup period capitecbank.co.za. The product’s early success indicated strong market acceptance, aided by competitive pricing and features (e.g. waiver of waiting periods when switching from other insurers) capitecbank.co.za.
FY2020: First full year saw >1.1 million new policies sold capitecbank.co.za, bringing active policies to roughly 900,000 by Feb 2020 capitecbank.co.za. Funeral plan net income jumped to R413 million capitecbank.co.za . By this time, Capitec noted that transaction fees + funeral income covered 93% of operating expenses capitecbank.co.za, underlining the importance of the funeral plan. Distribution was heavily branch-based – about 80% of policies were sold in-branch (the rest via digital channels) during the initial launch period capitecbank.co.za.
FY2021: Despite the pandemic, funeral cover income grew 57% to R650 million capitecbank.co.za. Active policies reached 1.2 million by Feb 2021 (up from 0.9m) capitecbank.co.za. Capitec averaged about 85,000 new policies per month in this year capitecbank.co.za (total ~1.0m new). Digital sales began rising modestly – 16% of new policies were sold via the banking app (up from 15% in prior year) capitecbank.co.za. Policy persistency (the ratio of policies still active 3 months after inception) was 41% for the FY2021 cohort (vs 48% for FY2020) capitecbank.co.za, reflecting some COVID-era lapse impact.
FY2022: Funeral plan income soared 39% to R906 million techfinancials.co.za. Active policies jumped to 1.7 million (+42% year-on-year) techfinancials.co.za. Capitec was issuing ~97,000 new policies per month on average techfinancials.co.za – over 1.1 million sold in the year. Importantly, policy persistency improved to about 58% techfinancials.co.za (from 49% prior year), meaning a greater proportion of policies stayed in force. Due to the larger in-force book, premium income (gross) grew 54% (from R2.8bn to R4.3bn) techfinancials.co.za and claims paid also rose (93,878 claims paid totaling R2.0bn in FY2022) techfinancials.co.za. By Feb 2022, Capitec’s funeral plans covered an estimated 8.9 million lives (including family members) across South Africa moonstone.co.za.
FY2023: Continued expansion with funeral plan profit up 58% to R1.431 billion capitecbank.co.za (Capitec’s integrated report figure for the year). Active policies reached 2.2 million by Feb 2023 capitecbank.co.za. Capitec captured a sizable chunk of the market – by 2021 it already had 37% of all new funeral policies sold in the country (by sum assured) capitecbank.co.za, and around 16% of the total active funeral policy market capitecbank.co.za, and its share likely grew by 2023. The average cover per policy was ~R96,000, noted as one of the highest in the industry capitecbank.co.za. Capitec’s funeral book by 2023 covered approximately 9.9 million lives (policyholders + dependents) moonstone.co.za, underlining its reach in the mass market.
FY2024: As of Feb 2024, Capitec had 2.7 million active funeral policies moonstone.co.za – a 23% increase year-on-year – covering about 12.1 million lives moonstone.co.za. Funeral plan net income rose to R1.29 billion (27% higher than the ~R1.0bn net in 2023) moonstone.co.za. Growth in FY2024 was somewhat moderated by an industry transition to new accounting (IFRS 17) and the anticipation of Capitec moving the business onto its own insurance license. Still, policy sales remained robust (~1.3m new covers). By mid-2023, Capitec already had 2.4 million active policies (4% of the bank’s total income came from funeral insurance at that point) moonstone.co.za. In late 2023, Capitec announced it would end the Sanlam partnership and start writing new funeral policies on its own life insurance licence from Nov 2024 moonstone.co.zamoonstone.co.za, indicating confidence in the product’s maturity.
Overall, from 2018 to 2024 Capitec’s funeral cover business grew from zero to a multi-billion rand franchise, highlighting strong customer demand and effective cross-selling to its banking client base.
Product Features and Pricing
Capitec Funeral Plan is a single, flexible funeral policy that clients can tailor to their needs. Key features include:
Coverage Amount: Up to R100,000 funeral cover for the main insured (client) capitecbank.co.za. Clients choose the cover amount based on their budget and needs.
Family Members: Ability to add up to 21 family members on one plan (spouse, children, parents, etc.) under one premium capitecbank.co.za, capitecbank.co.za. This high number of covered dependents was a differentiator in the market.
Premiums (Cost): Premiums are affordable, starting from R25 per month capitecbank.co.za for basic cover. Uniquely, Capitec’s plan has no automatic annual premium increases capitecbank.co.za – premiums don’t rise each year by default, which improves long-term affordability for clients.
Waiting Period Waiver: If a new client switches from another insurer and has already served waiting periods, Capitec waives its waiting period for equivalent cover capitecbank.co.za. This means immediate full cover when transferring from a qualifying existing policy – a strong incentive to switch.
Accidental Death Benefit: The plan pays double the cover amount for accidental death from day one of the policy capitecbank.co.za (subject to legal limits for minors). This provides extra benefit at no extra cost if death is due to an accident.
Claims and Service: Simple claims process – claims can be made in-branch, via email, or even on WhatsApp for convenience capitecbank.co.za. Capitec emphasizes a quick payout. In FY2022, for example, it settled ~94k claims totaling R2.0bn, versus ~55k claims (R1.2bn) the year before techfinancials.co.za, demonstrating its capacity to handle claims efficiently at scale.
These features, combined with transparent terms and integration into Capitec’s banking app, made the product attractive to Capitec’s client base. The value-for-money proposition (high cover per rand of premium) is evidenced by an average of R530 of cover per R1 premium paid, about 38% better than the market average capitecbank.co.za.
Comparing funeral premiums for R50,000 cover for 30 year old with spouse dependent
Distribution Channels and Sales Mix
Capitec sells its funeral plans through both physical branches and digital channels (primarily its mobile app):
Branch Sales: At launch, the vast majority of funeral policies were sold in Capitec’s branches. In the first year, about 80% of all Capitec funeral plan policies were issued in-branch (with only 20% via the app) capitecbank.co.za. Even as of Aug 2019, around 85% of recent policies were coming from branches capitecbank.co.za. Capitec leveraged its 800+ branch network and face-to-face consultants to educate customers and rapidly grow policy sales.
Digital/App Sales: Capitec integrated the funeral cover offering into its banking app for convenient self-service signups. Initially uptake was modest – e.g. 15–16% of new policies in 2020–2021 were sold via the app capitecbank.co.za – but this share has grown over time as customers become more comfortable buying insurance online. By 2022 and 2023, the volume of app-based sales was climbing (Capitec hasn’t disclosed the exact percentage, but the trend is upward). The bank incentivized digital uptake by offering slightly lower premiums on policies purchased through the app capitecbank.co.za (passing on cost savings).
Marketing/Partnerships: The funeral plan was a joint venture with Sanlam, with Sanlam providing underwriting through a cell captive (Centriq) and Capitec handling distribution. Capitec marketed the product heavily to its existing banking clients (e.g. promoting in branches, in-app banners, etc.), which drove the fast adoption. There were no third-party brokers; the product is sold direct by Capitec, keeping it simple and low-cost.
Over the years, Capitec’s strategy has been to migrate sales to digital channels for efficiency. However, the strong branch sales indicate that many customers still preferred face-to-face interaction for funeral insurance – likely due to its emotional nature and need to understand benefits. Capitec’s omni-channel approach (offering both digital and branch options) has been effective in reaching a wide client base. By 2024, with over 2.7 million active policies, Capitec has proven it can distribute insurance at scale through its banking infrastructure.
Market Share and Competitive Position
Capitec’s entry into funeral insurance was very successful, making it a major player in South Africa’s funeral cover market within just a few years:
Market Share of New Sales: By 2019–2020, Capitec already captured an estimated 37% of all new funeral policies sold in the market (by sum assured) capitecbank.co.za. This is a remarkable share for a new entrant, reflecting Capitec’s strong brand and branch network. Essentially, 1 in 3 new funeral policies in South Africa was being written by Capitec by 2020. This rapid gain was highlighted by a Swiss Re survey of the industry capitecbank.co.za.
Share of In-Force Market: By 2021, Capitec’s policies in force constituted about 16% of the total active funeral policy book in South Africa capitecbank.co.za. This percentage would only have grown in 2022–2024 as Capitec continued to add policies faster than many competitors. The active book grew 27% in 2024 alone (to 2.7 million policies) while the broader market growth is likely lower.
Lives Covered: Thanks to the ability to add many dependents per policy, Capitec’s funeral plans cover an enormous number of South Africans. By Feb 2023, about 9.9 million lives were covered under Capitec funeral policies (either as primary insured or dependents) moonstone.co.za. By Feb 2024, this jumped to 12.1 million lives covered moonstone.co.za – a significant portion of the population. This indicates Capitec has likely become one of the top funeral insurers in SA by lives insured, in line with traditional insurers that have operated for decades.
Revenue Contribution: In Capitec’s own financials, funeral insurance moved the needle. By 2022, net funeral plan income made up about 6% of Capitec’s total earnings (906m of 15.6bn net income) and about 4% of total income by 2023 moonstone.co.za. This is notable for a product only a few years old. It also provided diversification: Capitec’s retail banking model benefits from this non-interest income stream alongside transaction fees capitecbank.co.za.
Competitive Advantages: Capitec’s huge client base (20+ million and growing) and low-cost model gave it an edge. The simplicity and value of its funeral plan (low premium, high cover, no annual increases) likely attracted customers away from traditional funeral policies which often have escalating premiums. Capitec also tapped into the need for affordable family cover, which aligned with the South African funeral culture where people often insure multiple relatives. By partnering with an established insurer (Sanlam) for underwriting, Capitec could focus on distribution and service, playing to its strengths.
In summary, Capitec’s funeral cover business from 2017–2024 shows impressive year-on-year growth in both financial outcomes and scale. The bank leveraged its distribution network and customer trust to achieve over 2.7 million active policies in six years, generating over R1.3 billion in annual revenue by 2024. The product’s standardized features (one plan for all), transparent pricing, and integration into Capitec’s banking platform resonated strongly in the mass market. Going forward, with Capitec now moving the policies to its own insurance license moonstone.co.za, the funeral cover portfolio has become an important standalone arm of Capitec’s business, likely to continue its growth trajectory in coming years.
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