The mobile phone might present the key solution to the microinsurance dilemma: not only could it serve as cheaper alternative to traditional distribution channels, it can also be leveraged as a payment collection device and landing tool for intuitive customer service or claims management applications.

According to the 2014 GSMA report, the mobile microinsurance industry has issued more than 17 million policies across 100 live programs in 30 countries:

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The mobile phone: a win-win solution

1. For insurance companies

  • Push existing products to new customers: access to large concentration of new customers
  • Acquisition strategy: tap up-sell potential as these segments move up the economic ladder
  • Multi-purpose platform: access mobile infrastructure for sales, premium collection & claims settlement
  • Alternative payment mechanisms: use airtime, mobile money or loyalty wallets for premium collection

2. For mobile network operators

  • Boost in acquisition and retention strategy: insurance offerings for new and existing customers to differentiate versus competition
  • Increase in Average Revenue per User (ARPU): incentivize customers to top up more and frequently in order to keep insurance policy active
  • Churn reduction: retain customers by offering an additional incentive to stick to existing operator
  • Increase in customer engagement: link billing mechanism to core revenue strategy (airtime, mobile money or loyalty wallets)
  • Revenue diversification: gain and retain stable and strong revenue streams from insurance sales