There are three major Mobile Network Operators (MNO) in Kenya namely Safaricom, Airtel an2d Telkom. Kenya has a 91% penetration of mobile subscriptions compared to Africa’s 80%, according to business today. With a population of about 51.58 million, a total of 43.3 million Kenyans has access to the internet in the country. However, insurance penetration in Kenya still lies at 3% as at the end of 2018. Accessibility to a customer base, lack of trust, lack of awareness and affordability of insurance policies are among the main reasons for this low uptake of insurance in the country. Some of these challenges that traditional insurers have failed to address can find their eureka moments in engagements and partnerships with some of the leading MNOs in the country.
Expounding on the affordability challenge you will find that most of the insurance sold to the common mwananchi is expensive. This can be explained by the fact that there is a long chain of intermediaries involved between the direct insurer and the insured. Some of these intermediaries are the insurance agents and brokers involved in the business of selling insurance. Furthermore, the coverage of these intermediaries is limited and most of the time only in urban areas, therefore, failing to reach out to a larger number of potential consumers. The larger population remains inaccessible.
In this digital era, insurance still sounds like a foreign term for most people in the country. Consumer ignorance will still haunt us if we chose to stick to the conventional insurance process and fail to adopt change in the process.
Through partnerships with MNOs, innovative insurance companies will have access to new customers leveraging on their massive customer base, unique distribution channels, emerging payment mechanisms (airtime, mobile money) and trusted brands to widen their market.
Talking about policy subscriptions, a request can be made through USSD codes or call centers which a larger population is conversant with from daily interactions with their mobile phones. Helpline calls for claim requests could also be implemented.
MNOs can positively impact medical insurance with regards to the accessibility and lack of awareness among the consumers in many ways. Daily family health tips and wellbeing tips could be shared with the policyholders via SMS, follow up calls from doctors, e-prescription sent to policyholders and electronic consultation records provided via their phones.
A good example of a firm that has adopted this kind of partnership is MicroEnsure Insurance Company Inc in the Philippines. MicroEnsure launched a freemium life insurance product with Telenor and Airtel where the policy was free given minimum monthly airtime spend. Through this product, consumers learned about insurance observed its benefits and become comfortable with the product, eventually paying to upgrade their coverage.
Emerging consumers face the highest level of risk, but have the least access to insurance. Partnerships with MNOs will ensure that those people around the world that need insurance the most should bad things happen to them get affordable policies.