Vodacom, South Africa’s biggest mobile phone operator in terms of subscribers, continues to make inroads into the insurance space as it attracts more customers.
The Vodafone-owned company is pushing into the insurance market by covering life, funeral, device insurance and various short-term insurance services to existing and new customers.
The Accenture Disruptability Index 2.0 ranks insurance as the fourth most disrupted sector, the most susceptible to future disruption, and one of the least innovative sectors.
Insurance has lagged many other sectors in adopting digital technologies to transform its core, embrace customer-focused experience design, and weave its offering into people’s daily lives and organisations’ day-to-day operations, according to Accenture.
Pioneering African digital solutions company Vodacom is exploiting this space.
The company valued at more than R231 billion announced yesterday that policies increased by 11.2% to 2 million in the insurance space.
Vodacom generates close to R1 billion in insurance revenues and more than R260 million in profits.
Vodacom Insurance is now a significant player in the sector, with an EBITDA margin of 25.2% in 2020, up from 24.3% in 2019.
The company said last year it improved the device insurance claims ratio, saving R5 million a year.
“Our new automated claims process, launched this year (2020), has reduced the process from five days to approximately five minutes, delivering significant efficiencies and an improved customer experience.”
The company said recently in its 2020 annual report that with the local insurance market significantly underpenetrated, it believes that there remains substantial further upside in growing and digitising its insurance offerings.
“We have established and will grow our existing insurance customer base by expanding our suite of offerings, making them increasingly more accessible and personalised, thereby driving financial inclusion,” Vodacom informed investors.
“Our telco assets continue to drive differentiation in the market by building on our strong relationships with customers and the digital propositions informed by deep customer intelligence and available on numerous channels.
“These assets will allow us to create a seamless and engaging interaction for our customers, changing the way insurance products are consumed.”
Vodacom rival MTN is also a big player in the insurance space
MTN, Africa’s largest mobile phone group, has increased its shareholding in mobile-micro-insurance firm aYo by acquiring additional shares.
In 2017, South Africa’s third-biggest insurer Momentum Metropolitan and MTN launched aYo, a micro-insurance joint venture.
“The share of start-up losses has declined following the strategic decision to reduce our shareholding from 50% to 25%, with MTN’s shareholding increasing to 75%,” Momentum informed investors on Tuesday.
“The change in shareholding is still subject to certain conditions precedent.”
The insurer also disclosed that aYo has 10 million registered policyholders in October 2020, with over 50% active.
The company also operates in Ghana and Zambia.
aYo provides you with a fast, convenient, and easy to use insurance right on your cell phone. You enjoy hospital and life insurance cover through airtime deduction (Recharge with Care) or when you send MoMo (mobile money) to your family or loved ones (Send with Care).
It brings you an easy way to get hospital cover for accidents (not illness) and life cover.
