Insurance with real rewards


While participating in an innovation competition run by Hannover Reinsurance in 2016, Matthew Elan, Ndabenhle Ngulube and Marnus van Heerden came up with the idea of starting a true “community-based” service to restore faith in insurance products.   

“There is a perceived conflict of interest in the traditional insurance business model, because insurers both decide whether claims should be paid and profit from low pay-outs. 

To remove this conflict, we developed a business model based on the traditional stokvel savings model, whereby contributors are the ones who benefit when pay-outs are low,” Van Heerden says. 

The company was named Pineapple because of this community-centred approach. 

A pineapple is not an individual fruit, but a collection of berries that together form a structure that protects each and every one, explains Van Heerden.

With Pineapple they wanted to create a platform where clients come together as a community and look out for one another.  

How it works

Claims are paid out of the pockets of a member’s community. 

By default, customers join the general community but can choose with whom they want to share their risks by forming independent communities with members they know or trust. 

This strengthens fraud prevention, “as participants behave better when they know they are impacting real people,” Van Heerden explains.   

A community needs at least 150 to 200 members to be viable. 

A contributor’s exposure might be divided between the general and an independent community. 

The price of the insurance is market related. “We would rather give people better rewards for claiming responsibly than skimp on the contribution side and then be unable to provide a good service,” he says.  

Pineapple charges a fee to cover running costs, while a percentage of contributions is diverted to a fully underwritten central fund to ensure there will always be enough money to pay claims (even when a community’s pockets run dry). 

At the end of each year, contributors receive what is left after these costs and claims in the community have been settled. 

The solution is completely digitised.

Clients take out insurance via Pineapple’s mobile app by taking a snapshot and answering a few questions about the product they want to insure. 

The system uses big data and artificial intelligence to generate a quote in a matter of seconds. 

Claims are submitted online.

“The majority of our claims are settled within two days, but may take longer if more information or evidence is required.” 

Clients can phone Pineapple, but the company prefers communicating through their online messaging system, as this allows them to better track queries and generate well-informed feedback. 

“Our online messaging system is semi-automated, switching to a person if the chat bot is unable to help,” Van Heerden says.   

According to him, up to a third of non-life claims in South Africa are fraudulent: 

“While the communities tend to become self-regulatory, we also use artificial intelligence to protect the communities against fraud. Suspicious claims are flagged and investigated by an assessor.” 

The team

Lireas, a subsidiary of Hannover Reinsurance, was so impressed with the Pineapple business model that it invested R5.2m in the start-up in return for a 25% stake in the business. 

Pineapple is in the process of closing another round of funding to grow the business. 

“Getting funding turned out to be much harder and tiring than I anticipated,” Van Heerden says, mentioning that it is important to “match your interests”.

One of their greatest initial challenges was to develop a platform that was user-friendly and efficient, yet complied with the rigorous security, performance and access control standards governing the insurance industry. 

“Hannover Reinsurance, together with its primary insurer, Compass Insure, really helped us navigate around some of the challenges during the development phase,” he says.

Prior to the Hannover competition, the founders did not know one another. 

They were grouped together as one of the two SA teams that participated. 

Their diverse backgrounds – Ngulube being in software engineering, Elan in actuarial sciences and Van Heerden in law and accounting – meant that each contributed different strengths and perspectives. 


Pineapple took on over 1 000 early-access users in 2018 and used their feedback to refine the system.

The platform was officially launched in July 2018, now boasting over 13 000 members. 

“Not all these members are active, but our conversion rate is about ten times higher than that of traditional online platforms,” Van Heerden says. 

More than 80% of clients are between the ages of 18 and 25; an age group traditionally seen as averse to taking out insurance. 

The company initially created awareness via social media and Google Ads. 

“It allowed us to create awareness at a fraction of what it would have cost to do so through traditional channels,” he says. 

Plans for the future

Pineapple is in negotiations to expand its footprint into the US and is partnering with a well-established insurer to expand into car insurance in SA by July. 

They are also looking into other opportunities to expand the product offering, but this will be guided by customer feedback. 

“We have received requests for travel, health and building insurance and will, over time, look into these opportunities.” 

This article originally appeared in the 23 May edition of finweek. Buy and download the magazine here or subscribe to our newsletter here.

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