How 1.13 million GSM user in Nigerians get life insurance with their phones

Investigation has revealed life underwriting companies, which introduced insurance through mobile telephones into the country are gradually making inroads and have been able to sell life policies to 1.13 million Nigerians in the last 20 months.

FBN Insurance Limited, Mansard Insurance Plc and Cornerstone Insurance Plc. are the first three companies that introduced this marketing technique into the country.

Investigation also shows that more insurance companies were planning to join the mobile telephony marketing system. One of them is UBA Metropolitan Life Insurance Limited that is planning to introduce it in partnership with the GSM provider, Etisalat Nigeria.

They were impressed with the reception so far, because members of the public appeared to be seeing the benefits of taking up insurance policies.

To get life insurance, GSM subscribers need to dial certain codes on their mobile phones to register after which they will be required to spend a certain amount on airtime monthly, from which little amounts will be deducted daily from their airtime credit.

FBN Insurance was the first to bring this marketing system into the country in July 2013. The managing director, Mr. Val Ojumah, confirmed the growing number of subscribers to the firm’s mobile telephone insurance introduced in partnership with Airtel Nigeria.

He said the firm partnered with Airtel to distribute its mobile phone insurance known as Padi4life to the insuring public.

Ojumah said the product was available to registered Airtel subscribers upon payment of a daily premium of N20 for N500,000 benefit.

According to him, the policy provides cover in the event of total permanent disability or death, adding that no medical examination was required for anybody to get it.

Mansard Insurance unveiled its mobile telephone insurance policy tagged: MTN Y’ello cover, in conjunction with MTN Nigeria in October 2013.

Two months after its unveiling, the first claimant emerged and since then, several subscribers have been coming up with various claims.

The Assistant General Manager, Mansard Insurance, Mr. Taiwo Adeleye, said the life cover was available to anyone on the MTN network, with a daily payment of N15 or N100 per week.

He said subscribers could claim up to N350,000 life insurance cover for medical expenses incurred in case of accident, but at the insured’s demise, the settlement would be paid to the named beneficiaries.

According the company, its first claimant, one Mrs. Abimbola Ogunyemi, had a minor accident while trying to open a corked wine on November 7, 2013. The pressure she exerted on the cork caused a snap in her right wrist, making it impossible for her to use the hand for some days. She was diagnosed of ganglion when she visited her doctor.

The company said it received Ogunyemi’s claim on November 15, 2013, and after completing the necessary claims procedure, she was paid her claims in December.

Cornerstone Insurance, in collaboration with Airtel Nigeria and MicroEnsure, introduced its variant of mobile telephony insurance in August last year.

The Group Managing Director, Cornerstone Insurance, Mr. Ganiyu Musa, said claimants had been coming forwards and that the company had paid claims in different parts of the country.

According to him, a registered subscriber needs to spend at least N1,000 a month on the Airtel network.

“The mobile phone insurance is very easy and straight forward to have because it takes less than 30 seconds to register for it and once you qualify, you will be notified at the end of the month of the worth of your insurance cover,” Musa said.

He added that if the subscriber had any reason to be hospitalised, upon discharge, he/she only needed to dial the claims hotline number to process the claims.

One of the claimants who emerged from Cornerstone in November, Augustine Peters, a final year student of Business Administration at the University of Lagos, who spoke to our correspondent at the Airtel head office, said he was knocked down while on a commercial motorcycle by an unidentified motorist and had a fractured leg.

After completing the claims process, he received the cheque of N50,000 from the insurance firm.

Some other subscribers, who got their claims settlement the same day with Peters were Adeniji Owolabi and Ojo Aderogba, who were both hospitalised. The two got N25,000 each based on their cover value as a result of their monthly recharge during the period of their illnesses.

Before the introduction of the mobile telephone insurance, less than one million Nigerians had any form of insurance cover, according to industry statistics.

While many people do not like to hear about life insurance, because they feel it is about death, insurance operators have said taking such a cover is not a death sentence.

Insurers seem to have found a cheap, easy and effective marketing strategy to bring life insurance to more Nigerians through the use of mobile telephones.

As awareness on this class of insurance increases, the operators have also introduced mechanisms to investigate fraudulent claims that may arise, while restating their commitment to prompt payment of all genuine claims.

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