SA’s Sugar launches to insure homes in informal settlements, rural villages


South African startup Sugar has launched its niche insurance product that targets homes in townships, rural villages and informal settlements, which it says is a market size of 20 million homes across the country.

Rolled out in January having been in development since 2018, Sugar provides insurance that covers the structure and contents of a home. It also covers geysers and provides home assistance in case of a customer needing a plumber, electrician, locksmith or any such service.

Ntando Kubheka, founder and chief executive officer (CEO) of Sugar, said the startup is filling a vital gap.

“Traditional insurers shy away from this market because they don’t understand it. Typically the underwriting process requires valuation data which these homes don’t have in the valuation roll or the deeds office, and these homes are located in areas which are called “unstructured”, with no formal addresses,” he said.

“There are no municipal approvals when building these homes, there are no engineering certificates, and the builders are typically not NHBRC approved. Traditional insurers also shy away from this market because there is no available actuarial data that describes this market and its behaviour.” 

Kubheka, however, says he does understand the market and customer demands. Sugar provides home insurance of up to ZAR2 million (US$109,000) for the structure and ZAR500,000 (US$27,000) for the contents. 

“We cover all risks including theft and accidental damage. Our customers are covered for likely events – South Africa for example is not prone to earthquakes so we do not automatically cover earthquakes unless the customer specifically adds this risk cover,” Kubheka said. 

“Our shack product is designed to be a prepaid voucher which is paid for at the point of purchase and provides cover to the customer for 12 months. The customer determines their own risk.”

The startup provides vouchers at competitive prices at various denominations to suit many different budgets. Self-funded right now, Sugar is in the process of raising a seed round Kubheka hopes will bring in as much as US$1 million to quicken growth.

“The uptake has been great. We have premium paying customers and we are hoping to grow and scale pretty quick,” he said.

“We are a national company right now and we are able to provide cover for any customers with homes that fall within our cover limits.”


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Passionate about the vibrant tech startups scene in Africa, Tom can usually be found sniffing out the continent's most exciting new companies and entrepreneurs, funding rounds and any other developments within the growing ecosystem.

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