Greg Becker looks at how Ghana is leading the way in providing insurance - through mobile phones
This administration platform allows them to offer a cost-effective product. This solution – with premiums as low as 50p – is 50-70% cheaper than competitor products, partly because it is able to benefit from these mobile-based administrative cost savings, and also potential scale advantages.
It may surprise some that this initiative has been first launched in Ghana. This is likely to be a combination of a strategic decision to pilot this initiative in a smaller country in the MTN stable, and in one that also has low HIV rates. If the scheme is a success, then the combination of MTN’s infrastructure and Hollard’s track record of rolling out initiatives around the continent suggest that it will soon be seen in many other African countries.
Penetrating new markets
Many have looked to develop direct-to-customer propositions. In the UK, most of these have been built around the internet. Internet penetration, including broadband, is very low in Africa, and thus alternative routes to customers are needed. This product shows the scope for insurance sales that are done without a bank branch or a computer connected to the net. While necessity may be the mother of all invention, is a profitable opportunity the father?
Nevertheless, this is not Ghana and anyone looking at ‘m-insurance’ strategies in the UK would be advised to reconsider the role that smartphones will play. Smartphone penetration is continually increasing and some platforms are rapidly gaining prominence – most notably Google Android.
The recent introduction of tablet computers offers another intriguing opportunity – which has already been picked up by those in the Lloyd’s market – with many commentators debating as to whether this is the perfect piece of hardware to facilitate a discussion between a financial adviser and a customer.
New ways to interact with customers will continue to emerge, and the low-cost characteristics and scale arguments should be equally applicable in the UK as they are in Ghana. So will the UK regulatory framework assist with the delivery of these initiatives? Let’s hope so.
Greg Becker is product development actuary at RGA
