Greg Becker looks at how Ghana is leading the way in providing insurance - through mobile phones
The Treasury's recent Simplified Products consultation has nudged the UK insurance market into considering this space as a new sector. Meanwhile, Ghana is leading the way with the recent launch of a life insurance policy where the distribution and administration centres around a mobile phone.
Will the future regulatory environment stimulate this type of innovative response in the UK, or prevent it? While we decide, the developing world continues to come up with innovations and solutions for distributing insurance products.
Some foreign innovation may not be transferable to the UK, but this initiative certainly shows the scope for mobile-based distribution. Many providers here are looking at smartphone applications - for example, iPhone apps - with some having concluded that there is a need to wait for a winner to emerge from the platform race.
This interesting initiative in Ghana shows what can be done with the type of phones we owned ten years ago.
Innovation station
MTN, one of the largest cellular operators in Africa, has been an innovator, and is recognised for being a global leader in pre-paid airtime. It has made significant strides into financial services with its mobile banking offering, which currently comprises MTN's MobileMoney account and related credit cards.
MTN has looked to extend this success with a move into insurance with the launch of mi-Life in Ghana, dubbed "the world's first mobile money m-insurance service".
In order to create this insurance, MTN has partnered with three key players: Mobile Financial Services (MFS) Africa, Hollard Insurance and Golden Life Assurance Company.
MFS see itself as having skills in bringing value-added services to providers of ‘mobile wallets', while Hollard has had a proven track record of innovations across Africa, where it regularly develops new partnerships with distributors that have a well-known and trusted brand.
They have to date generated more than $190m of premium income from the low income market, and these products are currently underwritten by the Golden Life Assurance Company of Ghana.
The mi-Life initiative uses mobile phones in all customer communication - whether it be the application process, the collection of premiums from the policyholders' mobile wallet, responding to customer service questions or claim reporting. Mobile phones also facilitate alternative forms of customer communication, including SMS-based premium reminders and the use of interactive menus, which all combine to empower the customer.
