INSTANT Life, an online insurer, is SA's first direct insurer to function without the expense of an interactive call centre, using an automated administrative system.

The company claims to represent a sea change in the way insurers do business - 100 years ago saw the emergence of the broker-driven insurance business; about 50 years later call centre technology changed the industry, while the online, low-cost system of Instant Life represents the kind of do-it-yourself change similar to that of buying airline tickets .

"The new generation of insurers will shift the focus from the old model of push-selling by a commissioned intermediary, to life products that internet savvy and informed clients will want to buy," said Jan Kotze, CEO of Instant Life. He said life cover could become more affordable - including to the 50% of South Africans who were underinsured - by the life industry engaging directly with clients online and by shedding "its top-heavy layers".

Instant Life started operating in August but was officially launched only last week because it needed time to refine the business models and technology. Nonetheless, it had already received about 8000 applications from 40000 hits, said Kotze.

Cutting out intermediaries, call centres and overheads such as excessive management layers and office parks had given it a cost advantage over competitors.

Kotze said the South African life insurance market was far from saturated, in spite of the high number of competitors. "Traditionally, life insurance has been 'sold' not 'bought'. Products have been complex and client needs not always clearly defined. We think Instant Life can change that," he said. The company was offering up to R6m life cover without a full medical, at about half the cost of its competitors.

Asked how reliable self-assessing for life assurance was, Kotze said research showed by far the majority of clients were truthful when assessing their own risk, especially if the online prompts were clear and to the point.

He said every life policy issued by the firm was reinsured by Hannover Life Re, a subsidiary of Hannover Life Re Africa.

Kotze was a former director of Deloitte Consulting and ran its innovation unit before setting up VentureCapitalworks; an independent alternative asset management company that holds the majority share in Instant Life.

He said Instant Life's target market was educated internet users between the ages of 20 and 65, accounting for about 5-million people in SA.