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PROMISING STARTS IN MOBILE MICROINSURANCE: TIGO SENEGAL & TELENOR PAKISTAN INSURANCE AS A TELECOM STRATEGY: TELENOR & MICROENSURE
Telenor Pakistan:
“Insurance was the missing element as far as financial inclusion is concerned.”
Ali Sattar - Vice President Financial Services, Telenor Group
T he Telenor Group, a multinational telecommunications company with operations in 12 European and Asian countries, is Finding a home for
strongly committed to financial services in its emerging market operations, believing that “mobile financial services will
11
become the new normal.”
Through its mobile money services, Telenor has provided payment, savings, and remittance services in a few of its emerging market microinsurance
operations. However, the Group also sees insurance as an important part of its efforts to advance financial inclusion.
Given Telenor’s desire to drive financial inclusion and to take a strategic position in the insurance value chain, Telenor decided to invest in
a microinsurance specialist, MicroEnsure. Last year, Telenor and MicroEnsure set up a joint venture, MicroEnsure Asia, to roll out insurance elenor is the second-largest mobile operator in Pakistan and shares the group-level commitment to financial services. In deciding
offerings to Telenor’s customer base in Asia. The joint venture is independently governed, with board representation from both Telenor T where to house its microinsurance program, Telenor Pakistan weighed two options. Its Easypaisa mobile money service is one
13
of the 2012 GSMA Mobile Money “Sprinters” with over 6 million monthly users, but its GSM base was even larger at 32 million
and MicroEnsure. subscribers. Would it include insurance in its suite of financial service offerings through Easypaisa? Or would it be better to address the
The joint venture launched its first microinsurance service with Grameenphone in Bangladesh and then turned to the under-penetrated entire GSM base?
Pakistani market. Insurance premiums in Pakistan account for only 0.7% of GDP, far below the Asian average of 5.95 percent. 12
Telenor did both, for different reasons. Last year, Telenor launched Khushaal, a savings and microinsurance scheme attached to Easypaisa. 14
The vast majority of Easypaisa’s 6 million active monthly users access the service “over the counter,” transacting through an agent
rather than through a mobile wallet of their own. Telenor wanted Easypaisa to drive adoption of the mobile wallet so that it could offer a
broader range of financial services, and saw the microinsurance offering as a possible “carrot” to convert over-the-counter users to wallet
users. For Easypaisa, the benefit of Khushaal is as a mobile wallet recruitment tool.
By design, however, Khushaal can only attract a fraction of Telenor’s GSM base. Not all of Telenor’s GSM subscribers use Easypaisa and
only a fraction of those customers have an Easypaisa mobile wallet. Telenor believed there was room for two insurance products in Paki-
stan. In November 2013, Telenor and MicroEnsure launched Talkshawk Mohafiz, another free life insurance product linked to a subscriber’s
overall spend on Telenor’s network. Subscribers spending 200 rupees (US$1.90) per month on Telenor’s network — an amount roughly
15
equal to the average Telenor ARPU — receive at least 20,000 rupees (US$190) in free life insurance cover. Telenor hopes that the product
will create stickiness in a fiercely competitive telecom market with six mobile operators.
Do these two insurance channels conflict? Roar Bjærum, Head of Easypaisa, believes they are complementary. Khushaal is about acquir-
ing Easypaisa mobile wallet users, whereas Talkshawk Mohafiz targets churn reduction and ARPU increases within the GSM base. The
scale of the products is also completely different. Cover for the GSM product kicks in with a 200 rupee (US$1.90) monthly spend, but
Khushaal requires 10 times that — a 2,000 rupee (US$19) average monthly balance in the mobile wallet. The insurance cover is cor-
respondingly about 10 times greater for Easypaisa Khushaal compared to Talkshawk Mohafiz. Talkshawk Mohafiz is for a typical Telenor
subscriber, while Khushaal provides special rewards to active mobile wallet customers.
13. The fastest growing mobile money services in the world as revealed by the 2012 GSMA Mobile Money Adoption Survey.
14. Those interested in learning more about Telenor’s Easypaisa mobile money service in Pakistan and the hybrid over-the-counter and mobile wallet model should read MMU’s 2013 case study,
“Easypaisa: Mobile Money Innovation in Pakistan” by Yasmina McCarty.
11. http://www.telenor.com/innovation/financial-services/ 15. Specific product details for Talkshawk Mohafiz can be found at http://www.telenor.com.pk/talkshawk-utility/talkshawk-mohafiz. Details for Khushaal can be found at
12. http://tribune.com.pk/story/536915/industry-to-create-awareness-on-benefits-of-insurance-cover/ http://www.easypaisa.com.pk/index.php/en/services/khushaalbeema.
14 15
Telenor Pakistan:
“Insurance was the missing element as far as financial inclusion is concerned.”
Ali Sattar - Vice President Financial Services, Telenor Group
T he Telenor Group, a multinational telecommunications company with operations in 12 European and Asian countries, is Finding a home for
strongly committed to financial services in its emerging market operations, believing that “mobile financial services will
11
become the new normal.”
Through its mobile money services, Telenor has provided payment, savings, and remittance services in a few of its emerging market microinsurance
operations. However, the Group also sees insurance as an important part of its efforts to advance financial inclusion.
Given Telenor’s desire to drive financial inclusion and to take a strategic position in the insurance value chain, Telenor decided to invest in
a microinsurance specialist, MicroEnsure. Last year, Telenor and MicroEnsure set up a joint venture, MicroEnsure Asia, to roll out insurance elenor is the second-largest mobile operator in Pakistan and shares the group-level commitment to financial services. In deciding
offerings to Telenor’s customer base in Asia. The joint venture is independently governed, with board representation from both Telenor T where to house its microinsurance program, Telenor Pakistan weighed two options. Its Easypaisa mobile money service is one
13
of the 2012 GSMA Mobile Money “Sprinters” with over 6 million monthly users, but its GSM base was even larger at 32 million
and MicroEnsure. subscribers. Would it include insurance in its suite of financial service offerings through Easypaisa? Or would it be better to address the
The joint venture launched its first microinsurance service with Grameenphone in Bangladesh and then turned to the under-penetrated entire GSM base?
Pakistani market. Insurance premiums in Pakistan account for only 0.7% of GDP, far below the Asian average of 5.95 percent. 12
Telenor did both, for different reasons. Last year, Telenor launched Khushaal, a savings and microinsurance scheme attached to Easypaisa. 14
The vast majority of Easypaisa’s 6 million active monthly users access the service “over the counter,” transacting through an agent
rather than through a mobile wallet of their own. Telenor wanted Easypaisa to drive adoption of the mobile wallet so that it could offer a
broader range of financial services, and saw the microinsurance offering as a possible “carrot” to convert over-the-counter users to wallet
users. For Easypaisa, the benefit of Khushaal is as a mobile wallet recruitment tool.
By design, however, Khushaal can only attract a fraction of Telenor’s GSM base. Not all of Telenor’s GSM subscribers use Easypaisa and
only a fraction of those customers have an Easypaisa mobile wallet. Telenor believed there was room for two insurance products in Paki-
stan. In November 2013, Telenor and MicroEnsure launched Talkshawk Mohafiz, another free life insurance product linked to a subscriber’s
overall spend on Telenor’s network. Subscribers spending 200 rupees (US$1.90) per month on Telenor’s network — an amount roughly
15
equal to the average Telenor ARPU — receive at least 20,000 rupees (US$190) in free life insurance cover. Telenor hopes that the product
will create stickiness in a fiercely competitive telecom market with six mobile operators.
Do these two insurance channels conflict? Roar Bjærum, Head of Easypaisa, believes they are complementary. Khushaal is about acquir-
ing Easypaisa mobile wallet users, whereas Talkshawk Mohafiz targets churn reduction and ARPU increases within the GSM base. The
scale of the products is also completely different. Cover for the GSM product kicks in with a 200 rupee (US$1.90) monthly spend, but
Khushaal requires 10 times that — a 2,000 rupee (US$19) average monthly balance in the mobile wallet. The insurance cover is cor-
respondingly about 10 times greater for Easypaisa Khushaal compared to Talkshawk Mohafiz. Talkshawk Mohafiz is for a typical Telenor
subscriber, while Khushaal provides special rewards to active mobile wallet customers.
13. The fastest growing mobile money services in the world as revealed by the 2012 GSMA Mobile Money Adoption Survey.
14. Those interested in learning more about Telenor’s Easypaisa mobile money service in Pakistan and the hybrid over-the-counter and mobile wallet model should read MMU’s 2013 case study,
“Easypaisa: Mobile Money Innovation in Pakistan” by Yasmina McCarty.
11. http://www.telenor.com/innovation/financial-services/ 15. Specific product details for Talkshawk Mohafiz can be found at http://www.telenor.com.pk/talkshawk-utility/talkshawk-mohafiz. Details for Khushaal can be found at
12. http://tribune.com.pk/story/536915/industry-to-create-awareness-on-benefits-of-insurance-cover/ http://www.easypaisa.com.pk/index.php/en/services/khushaalbeema.
14 15
