Page 57 - State-of-the-Industry-2013

Part 2 - mOBile inSuranCe, Credit and SavinGS

TexT BOx 16
Promising start in mobile insurance,
the examPle of tigo kiiraY in senegal*

Tigo Senegal has 2.6 million GSM subscribers in a country of 13 million people. In April 2012, in partnership with microinsurance
specialist Bima and insurer UASen Vie, Tigo launched Tigo Kiiray, a mobile life insurance product aimed at their GSM subscriber base.
Tigo’s initial aim in launching Kiiray was to increase GSM ARPUs and decrease churn but the service has also begun to generate ap-
preciable revenue. In the 1.5 years since launch, Tigo Kiiray has seen strong take-up, reaching more than 10%% of Tigo’s subscriber
base, and is already among the largest insurance programs in Senegal.

PRODUCT DESIGN

Tigo Kiiray is a “freemium” life insurance product, whereby customers are given a certain amount of free insurance coverage and can
opt into a paid version with additional coverage. For the free version, eligibility for coverage requires a minimum spend on Tigo’s
GSM network. If a customer’s spend on the Tigo network exceeds FCFA 1500 (US$3.13) in a month, they are eligible for Kiiray life
insurance coverage of between FCFA 60k and 300k (US$125 and $630). If the customer churns from Tigo’s network, they lose their
Kiiray coverage. For the premium paid version, FCFA 330 (US$0.69) is automatically deducted from the customer’s airtime account
in small increments over the course of a month in exchange for a doubling of their life insurance coverage.

OPERATIONAL DEPLOyMENT

Tigo and operating partner Bima believe that insurance is a “push” product rather than a “pull” product – that is, few people
wake up in the morning wanting to buy insurance, rather, they need to be convinced to buy it. Furthermore, they believe that in a
country with low insurance penetration, most customers would have to be individually educated on the benefts and features of life
insurance. Consequently, Bima has hired a Tigo Kiiray feld force of over 40 foot soldiers along with dozens of outbound call center
representatives to individually educate and register customers across the country. A dedicated quality control team follows up with
registered users to ensure they understand the product, know how to make a claim, and keep the policy active by spending the
required minimum amount on Tigo’s network.

RESULTS

In the month of October 2013, 180,000 subscribers qualifed for either paid or free coverage, covering 360,000 individual lives in
Senegal. Remarkably, a majority of the policyholders have opted for the paid premium version of the service, proving the unmet
demand for mass market life insurance in Senegal. Tigo reports that churn rates among these customers have been signifcantly
lower than what would have otherwise been experienced.

* In Q1 2014, GSMA will release an in-depth case study featuring successful mobile insurance models, including Tigo Kiiray. Stay tuned.

the business model for mobile insurance

mobile insurance can be ofered either as a loyalty reward for mobile customers or where customers pay a premium for the service.
Our survey found 52% ofer mobile insurance free in return for meeting certain airtime usage levels, whereas 48% charge a premium.

For customers paying mobile insurance premiums:
• users can subscribe or sign up via their mobile phone (46%), insurance company (4%), dedicated agents on the ground,
or a call centre (50%).
• Premium payments can be made using mobile money wallets (54%) or via airtime wallets (46%).
• Claims are disbursed using mobile money (56%) and banks (44%).

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