Harnessing the ubiquitous
mobile phone as a convenient means of paying life insurance
premiums in emerging markets is gaining momentum.
Among the latest to adopt the
solution is the South African unit of UK insurer Old Mutual, which
has launched a mobile phone-based payment system targeting
consumers who may be unable to commit to long-term, regular monthly
payments.
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The first product on the
insurer’s mobile distribution platform is its Pay-when-you-can
Family Funeral Plan, which provides accident and funeral cover for
the policyholder, one spouse and children (biological, legally
adopted or step) up to the age of 21.
The minimum one-off premium
is ZAR49.95 ($7.45) which provides cover of ZAR1,000 for 14 months.
The maximum cover available is ZAR18,000.
To obtain cover, a consumer
purchases a registration pack at one of food retailer Shoprite’s
1,300 stores.
The pack includes a
single-use 16 digit identification number which the purchaser sends
to a dedicated telephone number using a mobile short message
service (SMS).
An SMS is sent to the
consumer confirming registration.
Although cover runs for 14
months, consumers are required to buy additional top-up vouchers
two months prior to their current policy expiring.
