The Insurance Company of East Africa (ICEA) has launched a mobile money premium payment option with MTN Uganda that is targeted at its existing customers who make regular payments for both life and motor vehicle insurance.
The MTN mobile money premium payment service is coupled with a home delivery service as customers will receive their car stickers and receipts at home, in the office or wherever they may be within a radius of 10 kilometres of Kampala at the moment. Today, clients pay insurance premiums through bank standing orders, direct debits, and salary deductions or through insurance agents and have got to pick up their stickers and accompanying documents at the ICEA offices.
“For those customers that have been making cash payments, we have decided to introduce mobile money transactions to make life easy for them and it gives us and our clients the comfort of accountability,” said ICEA chief executive officer John Karionji.
ICEA accepts premium payment in cash but it is always the client’s responsibility to ensure that the funds reach ICEA and an official receipt is issued in acknowledgement.
The mobile money payment mode will remove cash loss risks which can hurt the client and the company as well. It ia also convenient to the busy policy holder who wants quick and efficient service. According to ICEA, the insurance sector is being impacted by advances in technology and survival requires that companies embrace technology. “Indeed at ICEA we see the information technology sector as the next business frontier and we are filling our sand bags in readiness to concur,” says Karionji.
Clients who pay their premiums through mobile money will have the following advantages; home delivery service of motor stickers within 10km radius of Kampala, up to two installment payments, convenience and security of their money and avoid bank charges and penalties. Uganda has the lowest insurance penetration rate standing at 0.6 percent of GDP in the region.
According to Karionji, mobile technology will help enhance distribution of insurance products among low-income earners. “Lack of insurance awareness and its benefits is the biggest challenge facing the insurance industry in Uganda,” said Karionji. He however noted that the low-income market has limited education, experience with insurance and little trust of companies or their agents and these characteristics make selling insurance to the low-income market extremely challenging.
“We need a collective effort to sensitize the business sector on the invaluable benefits of insurance protection,” he said. In the Kenya insurance industry, premium payment through mobile money is a common practice. The ICEA Lion Group in Kenya has partnered with Safaricom to offer this service on the Kenyan market and so far the up-take has been good.
Going forward ICEA Uganda envisages a situation where this partnership will be developed further to reach out to a large section of the Uganda population with different insurance products and thus enhance Insurance penetration. ICEA is the first local insurance company to use the mobile money platform to collect premiums.
According to the Global System for Mobile (GSM) Association 2012 Global Mobile Money adoption survey, MTN Uganda ranks 2nd in terms of number of active mobile money customer accounts. Today, about 20 million transactions are carried out daily on the MTN mobile money platform.
Credit: The CEO Magazine
