Forget Silicon Valley and Tel Aviv; if you are looking for mobile insurance innovation, take a look at Africa.
Technology organizations call it ‘leapfrogging’ – when a country or region skips an entire generation of technology to become a world-leader. And so it has been with Africa and telecommunications. Landlines are rare – just two percent of African homes have one, yet mobile penetration is among the highest in the world in many markets. In Egypt and South Africa, mobile phone penetration tops 100 percent; Nigeria and Algeria are above 90 percent.
Interestingly, the rapid adoption of mobile has allowed the continent to achieve another ‘leapfrog’ maneuver, this time in banking. The launch of Safaricom’s Mpesa mobile money transfer service in 2007 has utterly transformed the way people buy and sell items in Kenya; around half of the country’s GDP now funnels through the Safaricom network each year. The initiative’s success has catalyzed dozens of similar systems around the world.
With mobile penetration and usage rates rising everywhere, a small but growing number of insurers are now looking to leverage Africa’s mobile leadership to achieve their own ‘leapfrog’ maneuver by partnering with leading mobile organizations and local innovators to create entirely new products and services. Much of the activity has been in three key areas:
Besides the ability to share resources, R&D budgets and risks, these innovative partnerships also leverage the core value proposition of each party to create a new idea or concept. For insurers, partnering with a trusted brand is also critical, particularly in markets where the public remains skeptical about the benefits of insurance.
Ultimately, by creating partnerships with non-traditional players, insurers operating in Africa have been able to expand their market reach, improve their reputation, drive growth and inspire world-leading innovation.
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