Thesis (MBA)--Stellenbosch University, 2006. / ENGLISH ABSTRACT: This paper proposes broad guidelines that the formal insurance companies in South Africa should follow when entering the low-income market, specifically LSM 1-5. The guidelines follow on a SWOT analysis of the formal insurance providers present in the informal market. After discussing the risks that the poor face and the riskmitigating strategies that they employ, we identify the opportunities and threats of this market segment. The strengths and weaknesses of the formal institutions are deduced from observations of how the informal institutions supply the credit, savings on which the poor rely. Important lessons and principles that are conducive to servicing the needs of the poor are discussed. To break into this market requires new distribution channels, new products and premium collection methods. The guidelines therefore suggest that strategic alliances be established with informal institutions to enable leverage of their networks and knowledge and to streamline the process. New products designed should incorporate the social features of the informal institutions concerned. New technology, such as prepaid vouchers and vending machines, should be investigated as possible ways of collecting premiums through bank accounts. / AFRIKAANSE OPSOMMING: Hierdie dokument stel voor 'n wye gids wat die formele sektor van versekeraars in Suid-Afrika moet volg binne die lae-inkomste mark, spesifiek LSM 1-5. Hierdie riglyne is baseer op 'n SWOT-analise van formele versekerings verskaffers binne die informele mark. Eers moet die risiko en strategie wat die lae-inkomste sektor volg bespreek word, daarna moet die geleenthede en bedreigings van hierdie deel van die mark ge'identifiseer word. Die sterk- en swakhede van die formele en informele instellings moet waargeneem word, spesifiek hoe hulle krediet en versekerings produkte verskaf. 'n Baie belangrike aspek hiervan is hoe dienstig dit is vir die lae inkomste groepe. Om binne hierdie mark te breek, benodig dit nuwe verspreidings kanale, nuwe produkte en premium kollektiewe metodes. Hierdie riglyne benodig 'n strategiese bondgenootskap met informele instansies sodat dit die kennis en netwerke kan versterk in 'n vaartbelynde proses. Nuwe produkte wat ontwerp word moet sosiale aspekte van die informele sektor in ag neem. Nuwe tegnologie soos vooruitbetaalde kwitansie en muntautomaat masjiene moet ondersoek word as moontlike maniere om premies te kollekteer deur bank rekenings.