Should we expect more insurance purchases from mobile phones?
Earlier this month we featured a story titled “MTN and Hollard partner in first mobile money life insurance service in Ghana”. This news release focused on the announcement that Africa’s leading telecoms provider MTN Group and international insurance group Hollard Insurance have partnered to pilot mi-Life, the world’s first mobile money life insurance service which is initially being made available via MTN Mobile Money in Accra, Ghana.
We would like to quote from this story:
“mi-Life provides MTN MobileMoney customers the opportunity to buy affordable life insurance with the convenience of being able to manage that insurance via their handsets. Customers will be able to submit claims, queries and make their premium payments using their handset,”said Bruno Akpaka General Manager Mobile Money in Ghana…The partnership between a major mobile operator and insurer will also ensure that the cost of insurance is dramatically reduced.”
This partnership is designed to meet the growing demand for insurance services across developing markets. According to a Lloyds study in 2009 the market for efficient, cheap and simple insurance in developing countries is estimated to be between 1.5 and three billion policies. The ubiquity of mobile and strength of the MTN brand makes Mobile Money the ideal platform to deliver financial services in Africa.”
Insurance and mobile banking
In this Blog Post we would like to discuss the impact that mobile banking might have on insurance purchases via mobile phones.
It is to be expected that as more and more smart phones become available, so too will the opportunities to extend mobile banking activities to purchasing a variety of insurance products. More and more South Africans are comfortable with financial transactions done through their mobile phones – and will more readily perform a greater variety of transactions.
How big is the mobile banking market in South Africa?
Every six months, the Reserve Bank releases a consolidated industry payment report, and the latest report reveals some interesting findings on mobile banking – and especially the inroads that FNB has made in the mobile banking industry.
In a statement, FNB says it has in excess of 42% of the cellphone banking customers and processed 82% of volumes and 44% of the value within the mobile banking market.
In December 2010, FNB’s 2.6 million cellphone banking customers processed in excess of 15 million transactions with a transaction value in excess of R1.7 billion.
Benefits of Mobile Banking
Ravesh Ramlakan, CEO of FNB Cellphone Banking Solutions, says the uptake of the service is proof it is becoming the preferred alternative as people are driven by the “anytime, anywhere” concept of banking.
“Of interest is that our predominant customer base resides within the mainstream market: 72% of our 2.6 million customer base earns less than R100 000 per annum, making cellphone banking an ideal channel of accessing financial services for those who need it most,” says Ramlakan.
In June last year, FNB reached the two million mobile banking customers milestone. The bank recorded over 2.5 million registered customers in October and added another 100 000 customers over November and December alone.
Responding to what could have driven the increase in customers, FNB says: “People have overcome their security concerns with this channel and are now confident to transact using their cellphones.
“We have also simplified the registration process so customers can register using online banking, ATMs or branches.”
Conclusion and Impact on Insurance
We should expect that the leading insurers in South Africa will follow these trends closely – and that new technology will allow easier access to insurance purchases from mobile phones. We could expect more applications to be developed for smart phones and that these apps might open the door of increased access to insurance.
Purchasing insurance for many of us might soon extend beyond the telephone call to purchases through the touch of a button!!
