MTN Nigeria now has SME insurance, is this a precursor for Zim?

Earlier today it was reported by leadership.ng that the mobile network operator MTN Nigeria launched an insurance package for Small and Medium scale Enterprises (SMEs) called MTN Y’ello Biz.

If an insured SME encounters disasters like flooding and fire, this insurance scheme extends cover of up to N1000,000 (1 million Naira which is equivalent to US$5,331). This is based on a weekly contribution of N300 (300 Naira which is an equivalent of US$1.60).

MTN Nigeria is offering this in partnership with Mansard Insurance, a Nigerian risk services entity.

This isn’t the first time MTN Nigeria has invested in the insurance business. In fact, the MTN Y’ello Biz is an extension of the MTN Y’ello Cover suite that includes MTN Y’ello Life.

This life assurance package is airtime credit-based, meaning that it draws contributions from deductions on airtime recharged by the registered subscriber. There are a lot of similarities with what Telecel’s Telecare and Econet’s EcoSure do, albeit from a mobile money wallet.

Just like how Safaricom has explored medical insurance through partnerships for its M-PESA  platform, this latest iteration of the cellphone-based insurance model ought to sound the bells of more investment frontiers for mobile network operators in Africa and Zimbabwe especially.

It’s not just MTN Nigeria; every operator is out to expand its product portfolios by introducing Value Added Services that utilise their network resources. With a laggard growth curve for data services because of the slow rise in smartphone penetration rates, the ace in the hole is mobile money and any related services.

The SME insurance approach holds a lot of significance for African economies that are eyeing national growth prospects on the back of rising informal sector income and SME contribution to national Gross Domestic Product. This is the position Zimbabwe finds itself in right now.

In the past two years, we haven’t witnessed a huge leap in the disposal incomes of Zimbabweans, a factor that encourages the uptake of insurance services. However there a still a lot of small-scale enterprises which would benefit from an insurance package that covers risks like floods which are now a reality in our backyards.

MTN Nigeria has identified a huge addressable market which has shied away from formal insurance yet needs it because of the huge risks that come with any form of enterprise. Zimbabwe is no different and it won’t be surprising if Telecel and Econet, the two MNOs that have already invested in insurance give it a shot in the short to medium term.

image credit: newsday.co.zw