Mobile makes insurance work in Africa – and we’re just getting started

Before 2007, transferring money in Africa was a nightmare of money orders, long trips to towns and trusting bus passengers to carry money for you. Fast forward to 2021, and there are more than 1 billion registered mobile money accounts, with around $2 billion dollars processed daily by the mobile money industry.

We’re starting to see the same thing happen with insurance on the continent. aYo started operations in 2017, and four years later, we’re about to break through the 12 million customer mark, without even scratching the surface.

The common denominator between mobile money and microinsurance? Mobile telecommunications networks, which are the real drivers of financial inclusion on the African continent, by creating direct distribution channels to billions of people who were largely off the financial services radar a couple of decades ago.

Mobile networks don’t just provide the reach, though. They play a key role in an insurer’s ability to manage customer data, and provide rich geographic and demographic insights that help insurers tailor their offerings to their potential markets. They also reduce the marginal costs of accessing information and participating in financial activities, which makes insurance affordable.

Our challenge right now is that many customers still want to engage with physical channels. Insurance is a brand-new concept, and people want to be able to see and interact with it. They want to know who to come to if they have a problem, or if they want to claim.

Much like the early days of mobile money, there’s a vast education job to be done around the how and why of engaging with insurance digitally before it goes mainstream. This requires some face-to-face interaction. If we get this right, though, we’ll reach a state where the customer fully understands their insurance needs, and uses their mobile wallets and airtime top-ups to buy cover. That’s real customer empowerment.

Ultimately, partnering with a mobile network enables a vision of becoming a platform business for any number of financial services. It’s all about creating a marketplace that didn’t exist before, and giving the customer greater choice. Now that’s true financial inclusion.