Cutting corners at a most vulnerable time: The customer's perspective on abuses in the informal funeral parlour market in South Africa

With the details of the South African microinsurance regulatory framework soon to be finalised, questions still remain as to how best to approach formalisation and enforcement of informal funeral parlours. Previous research showed that enforcement will not be an easy task, as it is a fragmented industry where informal insurance is key to many parlours’ operations. Understanding the nature and extent of abuse is important in informing the enforcement response.

This study investigated the nature of abuse in the informal funeral parlour market by talking to consumers themselves. It applied a multi-pronged qualitative methodology including focus group discussions, in-depth interviews with burial society management and intercept interviews with various community members (such as police officers and pastors) in four locations across three provinces, to get to the bottom of what abuses consumers are exposed to and what options they have to respond to abusive practices.

The study highlights three key findings:

  • Funeral parlours and burial societies deliver value to consumers by meeting essential functional needs, but also by meeting social and cultural needs.
  • Funeral parlours have a powerful position in the funeral value chain. This exposes consumers to abuse. Such abuses are common and cut across different spheres, such as health services, labour practices and the financial service rendered. As soon as a person purchases a funeral policy from a parlour, it creates the expectation of a certain level of service. This means that service abuses on the health or labour side become relevant from a financial services point of view.
  • Consumers are largely unaware of their rights and have limited effective recourse options. This is especially so in a time of mourning, when they do not have the emotional capacity for complaints against poor or sub-standard service.

The research confirms that there is a strong imperative for regulatory and supervisory action, but it is clear that there is no easy solution.

Additional Info

  • Country: South Africa
  • Institution: Cenfri, FinMark Trust
  • Date Published: 2016
  • Document Type: Focus Notes
  • Author/s: Christine Hougaard, Louise de Villiers, Albert van der Linden

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Cutting corners at a most vulnerable time: The customer's perspective on abuses in the informal funeral parlour market in South Africa

With the details of the South African microinsurance regulatory framework soon to be finalised, questions still remain as to how best to approach formalisation and enforcement of informal funeral parlours. Previous research showed that enforcement will not be an easy task, as it is a fragmented industry where informal insurance is key to many parlours’ operations. Understanding the nature and extent of abuse is important in informing the enforcement response.

This study investigated the nature of abuse in the informal funeral parlour market by talking to consumers themselves. It applied a multi-pronged qualitative methodology including focus group discussions, in-depth interviews with burial society management and intercept interviews with various community members (such as police officers and pastors) in four locations across three provinces, to get to the bottom of what abuses consumers are exposed to and what options they have to respond to abusive practices.

The study highlights three key findings:

  • Funeral parlours and burial societies deliver value to consumers by meeting essential functional needs, but also by meeting social and cultural needs.
  • Funeral parlours have a powerful position in the funeral value chain. This exposes consumers to abuse. Such abuses are common and cut across different spheres, such as health services, labour practices and the financial service rendered. As soon as a person purchases a funeral policy from a parlour, it creates the expectation of a certain level of service. This means that service abuses on the health or labour side become relevant from a financial services point of view.
  • Consumers are largely unaware of their rights and have limited effective recourse options. This is especially so in a time of mourning, when they do not have the emotional capacity for complaints against poor or sub-standard service.

The research confirms that there is a strong imperative for regulatory and supervisory action, but it is clear that there is no easy solution.

Additional Info

  • Country: South Africa
  • Institution: Cenfri, FinMark Trust
  • Date Published: 2016
  • Document Type: Focus Notes
  • Author/s: Christine Hougaard, Louise de Villiers, Albert van der Linden

Search news, publications and events