A marginally successful trial to test the cellphone market for the sale of accident insurance has left Cover2go undaunted. The company is convinced the future of insurance lies with technology, says CEO Derek Pead.
During the Easter holidays, Cover2go piloted its first product to be sold via cellphone. It was R60 000 worth of accident cover, valid for six days, for the price of R10. The product was sold via a hotline and clients could pay by sending an SMS to a short code number that charged them R10.
"We got between 3 000 and 4 000 customers and the uptake was a little disappointing, but the exercise validated the concept that cellphones can be used to sell insurance. Part of the disappointment in the take-up was probably that people have to get used to buying insurance over cellphones, and partly due to advertising it properly," Pead says.
He says accident insurance is relatively easy to sell over a channel such as a cellphone, as everyone faces equal risks when travelling and no medical examination is required.
Pead says a new accident cover product has been introduced to be sold over cellphones, offering R15 000 cover for one month, at R10, to cater specifically for the year-end holidays.
No legacy
Cover2go is a subsidiary of Metropolitan Life. Pead says the holding company has given the new business unit almost a free hand to develop the use of technology in selling insurance products.
"Metropolitan Life is a 110-year-old company and so to change things is not easy. So we had moved out of their premises and developed our own systems so we don`t have to depend on legacy systems and they have been very good at allowing us to do things as we see fit," he says.
Stellenbosch-based software engineering firm Indutech provides Cover2go`s systems.
Pead says the insurance industry has been, in general, slow to adopt new channels to sell product and collect premiums.
"The vast majority of South Africans are unbanked and this can make it very difficult to collect money. However, a channel such as mobile phones could be the answer, especially in economies that are largely cash-based," he says.
GSM and the Web
Other products that Cover2go plans to bring to the market include a GSM transaction-based funeral plan, which will be sold in spaza shops (small township tuck shops), where the client can complete the transaction using a handheld device located there.
Another product is a "survivor" product for those who aim to live beyond the age of 75 years and this is sold via adverts on webmail.co.za.
"Insurance is a sold product, meaning that very few actually go and buy it, so we have to find new ways to bring it to them. There is definitely a link between technology and product innovation," Pead says.
Share