The Sub-Saharan African region is set to see the number of unique mobile subscribers surge from 456m in 2018 to 600m by 2025, according to data from Global System for Mobile Communications (GSMA), a non-profit organisation that represents the interests of more than 750 mobile operators across the world.
With the young expected to be the majority of the new mobile subscribers, there is a general consensus that this will significantly influence mobile usage patterns in the near future, particularly in insurance.
Experts say that this means insurers need to introduce tech-enabled microinsurance products which consumers can subscribe to using simple mobile phones; send claims documentation using WhatsApp and receive pay-outs via mobile money services. The increased mobile usage also calls for insurance firms to seek partnerships with telecom firms to reach a wide clientele easily at a low cost, reported The Independent.
It is also essential for decision makers in the region to implement policies and best practices that enable sustainable growth for microinsurance.
Currently, many institutions in the region seem to be already positioning themselves to expand their business through the provision of tech-enabled microinsurance services, related to personal life, funeral covers, pension plans, credit life, saving plans, health or medical bills, crop destruction, agricultural inputs, burglary and property destruction, to cater to the low-income market segment.
For instance, in Uganda, the Insurance Institute of Uganda has partnered with the International Labour Organisation (ILO) and Financial Sector Deepening Uganda to train local insurers to help them create microinsurance services.
The Institute has also partnered with the aBi Trust to design a digital platform that will link insurance firms and other financial service providers including savings and credit cooperative societies to facilitate the distribution of microinsurance products, said the Institute’s head of training and research, Jonan Kisakye. aBi Trust was set up in 2010 by the governments of Uganda and Denmark to support agribusiness initiatives, with a focus on the private sector, to increase productivity and reduce poverty.
Regulator plays a part
Ms Mariam Nalunkuuma, the senior communication officer at the Insurance Regulatory Authority (IRA) of Uganda, told The Independent that the regulator, like the other industry regulators in the region, is making efforts to ensure that the local insurance industry does not miss out on the on-going digital transformation.
She said that the IRA has also submitted Mobile Network Operators guidelines to the finance and information communication ministries to protect the interest of policyholders who buy any tech-enabled micro-insurance products.