InsureTech: Digital Disruption Beyond Mobile Money

Danielle Treharne is Business Development Manager for Africa at BIMA, and will be a speaker at the ATBN Forum in London on Wednesday 21st June. Visit atbnforum.com

Below, she discusses the rise of BIMA’s InsureTech partnership with Tigo.

According to the National Insurance Commission of Ghana, the country’s top insurance scheme is run by – not an underwriter or a broker – but by local telecoms player, Tigo.

In just six years, Tigo has displaced well-known insurance companies that have worked in Africa for over half a century. The mobile operator now covers 1.8 million lives, insuring 1 in 10 adult Ghanaians.

How has this happened?

This rapid ascendancy represents a wave of digital disruption that traditional companies cannot stop. It also showcases an emerging trend in which the power of mobile financial services moves far beyond just mobile money.

A recent report by Deloitte recognises that Africa has entered a second wave of digital disruption. Here we see the financial services industry leveraging the mobile payment ecosystem to bring a wider range of services to the mass-market. The revolutionary change in the insurance industry in Ghana is a prime example of this trend, where innovative technology providers and mobile partners threaten the dominance of incumbents. The order is rapidly changing.

Tigo insurance is a partnership between the operator and BIMA, a global insurance provider focussed on delivering access to the underserved. BIMA provides technology for registration and payment, as well as expertise in design, distribution and service delivery. Meanwhile, Tigo provides reach to the mass-market consumer, as well as a trusted brand. BIMA replicates this model in 16 other countries across Africa, Asia and Latin America to reach 30 million subscribers worldwide.

The success of this scheme is a direct result of the enabling environment in Ghana – a real pioneer in the region. Local regulators recognise the unique power of digital solutions to close the protection gap and actively embrace responsible innovation. For example: Approving the use of electronic identification, such as a customer’s phone number – this step represents a paradigm shift in access for unbanked consumers

Also, unlocking a range of payment channels, from mobile money through to deduction of airtime credit – this creates a digital payment channel that gives lower-income consumers choice and convenience.

Ghanaian regulators couple this forward-thinking approach with investment in education and the robust scrutiny of providers. This approach creates an environment in which digital services can flourish.

Regulatory support for digital services has a huge impact on the consumer who can now access services they couldn’t before (eg. over 75 per cent of Tigo Insurance customers are trying insurance for the first time). It also drives financial inclusion at the macro level; in Ghana insurance penetration rates have grown to 1.2 per cent (the third highest in Sub-Saharan Africa).

This Ghanaian success story proves the disruptive potential for mobile financial services beyond mobile money. The model leverages the opportunity that the mobile payment ecosystem reveals; to unlock access to the mass-market overnight. Using these channels to deliver a new and needed service will usher in the next phase of the mobile services revolution across the continent.