A ocal insurer has taken advantage of opportunities presented by the mobile money transfer service to take insurance services to the masses.
Prime Life Assurance, a life insurance services provider, has partnered with MTN Rwanda in a venture that is expected to benefit mostly the lower market segment. The move is a huge boost to Rwanda’s insurance sector, which is grappling with poor levels of policy uptake.
Gregoire Minani, the Prime Life Assurance boss, said the mobile money facility could give the insurance sector a breakthrough if it employs local insurers to sell policies to the masses, who are mostly not targeted by most firms.
He said his company was inspired to exploit the potential of the mobile money service by the growing number of mobile phone owners in the country.
Rwanda’s insurance penetration is one of the lowest in Africa.
Norman Munyampundu, general manager of MTN business, said subscribers would access life insurance policies through the firm’s mobile money platform.
“The service will initially focus on MTN LifeCare, which enables a registered MTN Mobile Money customer to get life insurance cover. In the event the policy owner dies, their beneficiaries will receive a lumpsum payment,” he said during the launch of the service on Friday.
Minani said subscribers will be able to buy policies ranging from Rwf4,525 to Rwf21,625 per year, which qualify them for benefits of between Rwf250,000 and Rwf1,250,000, respectively.
“The claims process is simple; payout upon the death of an insured person is processed through the mobile money facility within 48 hours of receiving completed claim documents,” he said.
Over 6.8 million people or 64.8 per cent of Rwanda’s population had mobile phones in February, according to figures.
MTN Rwanda was ranked second in terms of number of active mobile money customer accounts in the world by the Global Mobile Money Adoption 2012 survey.
Over 1.3 million of the telecom’s 3.5 million subscribers are registered on the platform.
Financial experts say the initiative will contribute greatly to the country’s financial sector, especially in helping Rwanda attain its objective of financial inclusion under the second phase of the Economic Development and Poverty Reduction Strategy.
“This insurance cover is secure and is designed to meet the needs of Rwandans at an affordable price.
“There is no need for medical checkups or filling ‘complicated’ application forms,” explained Providence Kazintwari, the director general of Ascoma, an insurance brokerage firm.
He said the premium gives customers freedom to choose to renew or not.
In Kenya, Safaricom mobile money subscribers can access soft loans using the platform after the telecom firm partnered with a bank to facilitate the service.