African mobile phone users will soon get free life insurance cover when they load airtime onto their cellphones. This is the plan of Namibia-based microfinance and micro-insurance provider, Trustco Group Holdings, which is preparing to partner with African cellular companies to provide this offering.
Trustco Mobile affords free life cover to cellphone users who purchase airtime from a mobile operator under the Trustco Mobile brand.
According to Trustco MD Quinton van Rooyen, the Trustco Mobile concept works through a cellular company's network. “When a subscriber loads airtime onto their cellphones they get an SMS notification to inform them that they qualify for a certain amount of life insurance. They can then opt to take the insurance cover and register via the cellphone or ignore it,” he explains.
The life cover is 100 times the value of the amount of airtime purchased and valid for a period of 30 days, adds Van Rooyen. “Underwriting of pre-existing conditions will be extended for a further period of 30 days subject thereto that the subscriber renews his or her subscription for that period.” As long as consumers keep buying airtime, they are insured, he adds.
Van Rooyen says the reason they believe this solution is viable for the African market is because mobile penetration is growing more than any other form of communications on the continent. “Cellphones are easy to use and many people in the continent know how to use them and they are slowly bridging the digital divide in the continent,” he adds.
The offering has already been trialled and rolled out in Namibia in partnership with Powercom, which trades as Cell One. Since its introduction in March 2008, 250 000 users have subscribed to the offering.
Trustco says this solution will be available in Zimbabwe this month in partnership with Econet Wireless and First Mutual Life Assurance Company. “Trustco Mobile licensed its patented transaction facilitation system branded as 'The Trustco Mobile concept' exclusively to Econet in Zimbabwe against payment of a monthly fee of U$1.00 per subscriber,” says Van Rooyen.
Econet will utilise the Trustco Mobile concept to offer free life cover as a value-added product to its subscribers, he adds.
He says First Mutual Life Assurance Company, a subsidiary of Africa First Renaissance, and a registered insurer in Zimbabwe will underwrite the life cover against payment of an underwriting fee.
Van Rooyen says the agreement will be implemented once the final approval of the Insurance Regulator in Zimbabwe is granted. “The approval by the Insurance Regulator is expected shortly and a further announcement will be made in due course.”
The agreement marks the first phase of the implementation of the Trustco Mobile concept into Africa and beyond Namibia, he says. “We expect to conclude further agreements with other parties elsewhere in Africa and further announcements in this regard will be made when necessary.” He also expects the conclusion of the agreement to contribute materially to the group's micro-insurance segment.
The company plans to roll out this platform in Botswana, Lesotho, Zambia, Kenya and Burundi.
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