Encouraging financial inclusion through technology-led microinsurance services

By Dipak Patel - Senior Manager Presales, Panamax 

The insurance industry constantly needs to evolve and address the critical needs of their existing and potential customers. As such, tailored services are the talk of the town and are highly attractive to customers. In order to encourage financial inclusion in regions such as Africa, insurance companies need to adapt and introduce an insurance that people can afford. This is where the microinsurance model can be hugely beneficial.


Understanding microinsurance
Microinsurance is an insurance that is tailored to suit the specific needs of low-income groups or the urban poor in developing economies. Saying that microinsurance will reduce poverty might sound like an overstatement, yet it's not erroneous to suggest that microinsurance would undoubtedly help those with a limited income cope with unforeseen expenses in the areas of health, property, automobiles and agriculture, amongst others. It will also aid in including more people in developing countries into the financial ecosystem.


The ramifications for businesses

First of all, businesses need to understand that this is not a CSR activity or a charity model. On the contrary, there are many business benefits tagged to microinsurance. Introducing microinsurance will help insurance services penetrate more deeply into the market and cover all those potential customers who cannot afford huge premium payments. This, in turn, generates profits for insurance companies. In addition to profits, the insurance providers can tap into a larger, more diversified risk pool and also earn a more solid reputation. Additionally, these insurance providers enjoy the 'first mover' advantage and can fortify a sustained growth in developing markets.



Driving microinsurance deep into the ecosystem using mobile finance technology

In order to facilitate sustainable growth, to include more people who actually need microinsurance into the fabric, and to tap into the emerging opportunities on the continent - innovation, agility, and collaboration are important. These should be applied to see how microinsurance can be distributed across Africa.

Distribution drives microinsurance and without it, even a high quality product is rendered irrelevant. Therefore, it is important to select a distribution channel that is appropriate for your target market. When there is the lack of proper mass distribution channels, then reaching out to people who need microinsurance can be a huge struggle.

Mobile microinsurance (MMI) is the savior in this instance. MMI is successfully used by agent-led models, bank-led models, MNO-led models and business models to run successful insurance services. While agent-led models are popular in Asia Pacific, and bank-led models in emerged markets, in Africa we have seen a surge in the popularity and success of an MNO-led model. 

The MNO-led model - A success story in Africa

MNOs in Africa lead the way to the mass adoption of microinsurance. According to The Landscape of Microinsurance in Africa report (2015), mass market channels (specifically MNOs) are common for microinsurance distribution. The report indicates that more than 200 providers from 36 countries, out of the total 52 countries in Africa, reported some kind of microinsurance activity. A total of USD 647 million was spent on microinsurance premiums. Around 5.4% of the total population was covered and about 61.9 million people were insured.

Today MNOs are not merely providing a delivery channel, they are driving MMI development. Previously, MMI was used by insurers only as a tool to expand their customer base, but today mobile microinsurance is largely used by MNOs to build customer loyalty and reduce churn in an increasingly competitive voice market.

Mobile network operators (MNOs) are taking charge, as often as the insurers. Around one-third of deployment (equal to insurers) is led by MNOs. The remaining is driven by banks, governments and third parties. Today, MNOs are actively involved in the branding, marketing and development of MMI products and establishing a front-end relationship with customers, thus playing a role that is more etched and evolved than simply being a distribution channel.

Clearly, mobile finance technology is the driving force behind deep penetration of microinsurance amongst the low-income and urban poor population. Mobile microinsurance solutions enable insurance companies to offer a wide range of services and products over mobile, with or without agent intervention. This also offers customers the convenience to choose options that will cover them, yet still not force them to pay for deductibles they will probably never use.


About Dipak Patel:



Dipak has been in the telecommunications sector for more than 10 years. He currently serves as Sr. Manager Pre-sales at Panamax. Panamax is a leading technology company offering innovative & market-proven telecom switching, carrier business automation and mobile financial solutions. Dipak has shouldered various responsibilities, in Support, Operations, Training, & Pre-sales departments in the organisation.

Dipak is passionate about mobile finance solutions, and providing expert guidance to team members, customers and partners has always been his expertise. His penchant for cutting edge technologies, together with his passion in delivering outstanding solutions, is what drives him forward.

Dipak is visiting East Africa Com as a representative of Panamax Inc. Meet him at booth number 9. You can also send him an email at sales@panamaxil.com to schedule a meeting at the event.


Webisite: www.panamaxil.com
Twitter: www.twitter.com/panamax_inc
LinkedIn: www.linkedin.com/in/dipak1432003


East Africa Com will be taking place in Nairobi between 18 -19 May, 2016.

Regional Telecom Leaders Prepare to Set Strategies for Capitalising on New Networks and Services at East Africa Com Conference in Nairobi Tomorrow

Tomorrow, over 650 telecom leaders from across East Africa will gather in Nairobi at East Africa Com conference (www.comworldseries.com/eafrica).  Their agenda for the 2 days is to establish strategies, set best practice benchmarks and find innovative ways of capitalising on the new networks and services in the fiercely competitive East African market.

Subscription growth remains high in East Africa, but this is not driven by an increase in customers, rather multiple SIM usage as a result of fierce price wars amongst the operators.  This has had a negative impact on ARPU which has declined to reach just US$7.13.  New players, the imminent introduction of mobile number portability and improved connectivity has forced operators to look beyond price as a winning competitive tool. 

New opportunities for operators now lie in the provision of value added services and mobile broadband but services are still evolving and an optimum business model is still to be established.  It is for this purpose that 650 telecom leaders will meet tomorrow at East Africa Com conference, 5-6 April.  Representatives will include mobile, fixed, satellite and WiMAX operators, ISPs, MVNOs, regulators, ministers, solutions and technology providers, investors and consultants to ensure a truly 360 degree perspective of the market.  Attendees will pool their different perspectives, ideas and experiences to set strategies around convergence, broadband, LTE, value added services, telecoms Fraud and connecting rural areas. 

The 2 days of discussions will be led by a panel of 45+ speakers representing leaders of the region’s most dynamic operators, from pan-regional investors (Pan-regional players Orange France-Telecom and Airtel Africa, represented by Vice President Michel Barré and Group Director of Networks Bayan Moadjem respectively), incumbent operators (such as Telkom Kenya and their CEO Mikhail Ghossein), competitive mobile operators (with CxOs from Safaricom, Vivacell Southern Sudan, Zantel Tanzania, Airtel Kenya, amongst others), the self proclaimed original triple play provider in Africa, Wananchi (represented by Group CEO Richard Bell, and Kenya’s Country Manager Peter Reinartz), alternative service providers (Jamii Telecom, Roke Telkom Uganda) and more.

For more information on East Africa Com and to attend please visit www.comworldseries.com/eafrica

Kenyan Operators Unlikely to Meet Deadline to Launch Mobile Number Portability

Operator price wars in East Africa have blighted operators’ efforts to ensure quality of service, meet customers’ expectations and retain their loyalty.  As consumers buy up multiple SIM cards to take advantage of the best deals, subscription rates have been artificially increased 19% year-on-year whilst ARPU has declined to a mere 12% to reach just US$7.13 at the end of 2010. 
 
All of this is set to change with the impending introduction of Mobile Number Portability in East Africa.  It’s well accepted that consumers elsewhere are loyal to their mobile number, not their operator, so for the first time East African consumers will benefit.  It is likely the consumer will now look to network quality and value added service offerings when choosing their service provider, triggering fresh competition between the operators on quality, and away from the dirty price wars.  As the artificial buffer of multiple SIM cards is knocked back, Safaricom - as the dominant incumbent so far - is expected to be the biggest loser, and competition will heat up further.

But there has been disappointing news in local press reports this week, that mobile operators in Kenya may not be ready for the adoption of the Mobile Number Portability which is scheduled to take effect from 1 April 2011. The four operators are yet to start test-runs on the switch platform dubbed, the ‘All Call Query System’ and insist that they need at least four weeks to perform the tests. The industry regulator, CCK has reiterated that the deadline for the switch-over will not be extended.  For the sake of the consumer, we hope this doesn’t end in deadlock.

East African operator leaders will be meeting in Nairobi, 5-6 April to discuss implementation of new networks and services across the region at East Africa Com conference.  Find out more online www.comworldseries.com/eafrica   

Airtel Africa & East African Operators Ensure against Fraud and Revenue Loss in Telecoms Business

Risk of fraud & revenue loss in telecoms continues to be a major priority for big businesses in East Africa.  Whilst the region’s telecommunications industry has seen a quantum leap in the past decade – with markets like Kenya, Tanzania and Uganda being some of the most competitive & lucrative in the whole continent – there remains this shadowy side of telecoms in Africa. 

Operators often compete at a cut-throat level when it comes to pricing, OPEX, CAPEX, distribution models, etc.  But service providers like Airtel realise that there is money to be saved by committing to fraud and risk avoidance as well.

In Nairobi on the 6^th April, the Kenyatta International Conference Centre will provide a hub and platform for learning, debating and networking around this important issue of Fraud.  In particular, 2 exclusive Master Classes will take place.  The first to be run by Airtel Africa’s Group Revenue Assurance & Fraud Manager, Hawas Garba Matta.  The second by an international expert – Patrick Gitau of Globacom Nigeria.  The whole session will be opened and chaired by Ade Banjoko, Chair of the GSM Africa Fraud Forum.

Topics and discussions in these classes will include:

• effectively integrating risk, fraud & revenue assurance into your corporate strategy
• telecoms enterprise risk management
• optimizing end-to-end fraud & revenue assurance strategies
• implementing risk based fraud & revenue assurance framework with essential “from the top policy”
• bridging the GAPs by assessing & monitoring product life-cycle processes to identify the sources of fraud & revenue loss
• focus on optimised fraud detection through real-time capabilities
• how to tackle telecom fraud typologies in East Africa - bad debt management, process flows and inefficiencies, and capacity deficiencies problems in your network
• how to get value from RAMS and FMS
• vendor valuation criteria and considerations, and working closely with suppliers to minimise revenue leakages

“The market has responded very positively to this brand new feature to East Africa Com conference and exhibition,” says Emily Cottam, Senior Conference Producer, East Africa Com “Fraud is a topic that East African operators can’t afford to overlook if they are to remain profitable in this increasingly competitive market.  These master classes are a one-stop-shop for operators looking to understand and implement effective fraud prevention strategies.”

What’s more, these master classes form just one segment of the East Africa Com 2011 conference & exhibition, now in its 7^th year.

For more information about East Africa Com, and the Fraud & Revenue Assurance master classes visit www.comworldseries.com/eafrica or contact Emily Cottam on emily.cottam@informa.com or call on +44 (0)207 017 5610

Director General of the Communications Commission in Kenya confirmed for East Africa Com

Whilst the multitudes gathered for Mobile World Congress in Barcelona, there was - it could be said - a very low representation from emerging markets, and in particular from Africa. 

However, anyone interested in doing business in the lucrative African markets can rest assured that all of the leading lights of the East African telecoms industry will be in attendance at East Africa Com, Nairobi, 5-6 April 2011.

Last week the Director General of the Communications Commission in Kenya, Mr Charles J. K. Njoroge, confirmed he will give a speech on Wednesday 6^th April.  This is the 7^th annual East Africa Com conference and exhibition, and yet again there is unparalleled regional industry support.

See you there! www.comworldseries.com/eafrica

About Mr. Charles J.K. Njoroge

Mr. Charles J.K. Njoroge is the Director - General and CEO of the Communications Commission of Kenya (CCK).  He was appointed to the position in July 2008. He was recently recognized as an Elder of the Burning Spear (EBS) by the President of Kenya.

Until his appointment, Mr. Njoroge, an Economist, was the Director in charge of Competition, Tariffs and Market Analysis.  In that position, he was responsible for economic regulation, which entails policy formulation; competition and market analysis; price regulation which includes tariffs and interconnection issues; universal access and funding and statistics.

Mr. Njoroge joined CCK on 1999 at its inception.  He previously worked for the defunct Kenya Posts and Telecommunications Corporation as a Senior Telecommunications Economist.  His experience in the sector spans over 25 years.

Mr. Njoroge has spearheaded a number of seminal studies at CCK.  These include the Universal Access study which gave birth to the CCK’s Universal Access strategy in 2005, and set the foundation for the country’s international (TEAMs) and national (FONN) fibre optic connectivity.  He coordinated the carrying out of the Telecommunications Network Cost Study that saw the reduction of retail and interconnect rates for mobile telecommunications charges in the country.  He also oversaw the carrying out of an Internet Market study, which among others identified factors hindering the development of the Internet subsector in Kenya.  In addition he was instrumental in the set up of KENIC, the ccTLD, the KENET project and other initiatives such as the digitization of secondary education among others.

Mr. Njoroge holds an MA in Development Economics from Dalhousie University, Canada, a BA in Economics from the University of Nairobi, Kenya, and a Postgraduate Certificate in Telecommunications Regulation from University of Westminster, UK.  He holds a number of certificates from some of the leading training institutions from the US in the area of ICT Regulation and Management.

East African Operator CxOs Plan to Meet in Nairobi to Discuss Strategies for Healthy Competition in the Region

The East African telecoms markets, and in particular the Kenyan & Ugandan markets, have seen stiff competition – especially around price.  With ARPU decreasing to just US$7.13, operators are left wondering how they can improve their bottom line, despite having to diminish their prime source of income from customers. 

In response to this, convergence, broadband and value added services are becoming an increasing part of operator strategies, with Informa Telecoms & Media reporting that mobile broadband subscriptions in East Africa grew by 105% in 2010 to reach 690,707.  A mix of technologies are being deployed to offer these broadband services as  mobile, satellite and fixed-line operators and ISPs compete with bundle prepaid options.

With this array of challenges and growth opportunities, East Africa Com is the perfect forum for operators needing to get together, discuss, and learn.  15 CxOs from East African operators have so far confirmed their participation at East Africa Com – the region’s leading executive-level telecoms conference & exhibition – which will take place in the Kenyatta International Conference Centre, Nairobi, on the 5^th and 6^th April www.comworldseries.com/eafrica

These Operator CxO speakers include; Richard Bell, Group CEO, Wananchi Group; Atul Chaturvedi, CEO, Yu Kenya; Bhaskar Chakraborty, Chief Supply Chain Officer, Airtel Africa; Mickael Ghossein, CEO, Orange Telkom Kenya; Michel Barré, VP East Africa & Islands Region, Orange France-Telecom Group; John Barorot, CTO, Safaricom; Peter Arina, CCO, Safaricom; Norman Moyo, CEO, Zantel Tanzania; Peter Reinartz, CEO, Zuku Kenya; Julius Kinyua, CEO, Flashcom, Kenya; Khalil Nassar, CTIO, Vivacell, Southern Sudan; James Byraruhanga, CTO, Roke Telkom, Uganda, amongst others.

They will offer expert observations and best practice advice on issues like: mergers and acquisitions in the region; Airtel Africa’s arrival; competing in the converging East African arena; connecting East Africa - strategies to leverage greater network capacity & drive access to communications; network evolution & the leap to LTE; VAS - delivering real value to customers; operator competitive strategies - ensure prime positioning to thrive in East African markets; strategies for a fair playing field & customer centricity; intelligent and cost-effective extension of networks for rural access to communications; rural telecoms - reaching out with services for new growth; and how to defeat telecoms fraud to discover lost revenue.

East Africa Com is the only annual event dedicated to the communications industry of East Africa where 850 operators (fixed, mobile, wireless), ISPs, regulators, investors and vendors from the region gather to debate the opportunities and challenges facing their markets. The conference will be co-located with an exhibition that showcases the latest innovations from over 30 telecoms companies in East Africa and across the globe. Find out more online: www.comworldseries.com/eafrica