Have you heard how telecommunication provider Tigo has affected the outreach of microinsurance in Ghana over the past three years?
The microfinance portal CGAP (Consultative Group to Assist the Poor) published two articles on 15 and 19 February 2013 by Peter Zetterli titled ‘Can Phones Drive Insurance Markets? Initial Results From Ghana‘ and ‘Freemium: Spawning An Insurance Market In Ghana‘. These two articles literally blew me away to an extent where I flooded my personal facebook profile with the articles’ link so intensely and repetitively that three people unfriended me – still worth it.
Consider these facts:
- Speed: Tigo Family Care Insurance was launched in 2010 = 3 years duration.
- Outreach: Provides insurance cover for nearly 1,000,000 clients, an estimated 93% of whom have no other insurance cover.
- Coverage and idea: Tigo customers receive free life insurance for themselves and one family member, ranging from $104 to $520 depending on how much airtime they use in a month. They can also choose to double it by paying a fee of $0.68 per month for what is called Xtra-Life, giving them up to $1,040 of insurance cover.
- Perceived satisfaction: In a GIZ (German development organisation) study on the Ghanaian microinsurance sector, 61% of subscribers were satisfied with the product, 33% said “somewhat satisfied” and only 4% were “not satisfied”.
- Recognition: In 2012, Ghanaian National Insurance Commission (NIC) awarded Tigo Family Care Insurance as the most successful microinsurance product in Ghana.
… But now you might be thinking “well, all that doesn’t really matter unless they actually pay out premiums, does it?”
But according to Abdul-Nasser Alidu, Head of Solutions Category at Tigo Ghana, the company has so far paid out over 600 claims in the amount of more than GHS 500,000 (~EUR 200,000). Technically, Tigo Family Care Insurance was developed in partnership with Bima, underwritten by Vanguard Life and administered by MicroEnsure – a pool of competencies which has most definitely contributed to the success of the product.
And if you read my previous blog post ‘Microinsurance on the roll‘, you’ll definitely notice that these same companies were also on the spot during the recent (and unfortunately, continuously on-going) market fires in Ghana.
So what’s in it for Tigo? Loyalty. In a hectic telecom market characterized by clients who continuously switch providers in search for the best deals, the creation of increased loyalty through additional products, can be key.
If you want to know more about microinsurance in general, I can recommend the book ‘Promoting Microinsurance in Ghana‘ (2012), which can be downloaded for free from Microfinancegateway.org. If 200 pages of microinsurance literature is a bit too intense for your taste, I have a vague feeling that a summary of interesting details will most likely be presented to you on this very blog in the near future.
– Now call your cell phone provider and ask if they cover you in the same way. If not, tell them about Tigo.