2013-03-01 – Johannesburg
Mobile insurance in Africa – leading the way
Africa continues to play a strengthening role in emerging markets, and in the global economy. BIMA’s introduction of paying for insurance through mobile phone credit can be viewed as an initiative to ensure that more and more people can access insurance products through their phones and can actually pay for them without the need for a bank account.
The advantages to consumers quickly become apparent: the price of insurance products such as health and life insurance becomes affordable to low-income customers in emerging markets. It also removes constraints such as not having a bank account or living in a remote location.
Low-income consumers can take advantage of the benefits that insurance products offer and can plan their future knowing that they have minimised the ever-present risks in everyday life. Traditionally, healthcare and funerals can be very expensive to low-income earners and such affordable insurance products can relieve some of the anxieties faced by these consumers.
The idea of introducing more affordable insurance to people in emerging markets through mobile phones is a noble one. Early indications are that this will also be profitable, considering that the mobile telephone customer base is very large and constantly growing. The low monthly payments (€0.20 to €7 per month) should eventually be highly profitable, with large numbers of consumers purchasing the products.
BIMA has been able to take advantage of the mobile technology revolution to provide cheap insurance and fused the insurance and mobile phone industries together. As a result potential gains are realised by both industries. Insurers have access to a large and diversified customer base, while the mobile operators increase their revenues.
However, despite all these positives, one wonders how the position of Africa as an emerging market is defined in today’s world. BIMA led the way in the introduction of mobile phone banking and payments across the emerging economies, an idea that was embraced by banks and all industries in the developed world. This could quite easily apply to the area of mobile insurance.
Essentially, Africa leads the way in pioneering such revolutionary technological applications which are then fine-tuned before being rolled out across developed economies.
In developed economies, these ideas will meet the cutting edge advancements in mobile phone technologies, which are accessible even to low income consumers, making it extremely conducive for such a business to thrive. Unfortunately, low-income earners in Africa cannot yet afford smartphones as easily as their counterparts in developed economies.
In our opinion Africa, is still at the forefront of revolutionising the way financial products can be delivered and accessed by a wider spectrum of consumers. Just like African companies revolutionised the world of mobile payments and banking, it may be set to do the same with insurance.
Africa will continue to lead the way when it comes to the application of mobile technologies in the real world – with developed markets in Europe and North America lagging a few years behind.
The challenge now lies in complementing the ideas emerging from Africa with the provisions of wider up-to-date technology for all income groups.
