innovation in africa, drivers, trends and what the future might just … · 2016-10-28 ·...

Innovation in Africa, drivers, trends and

what the future might just look like

October 2016

Greg Becker – Business Development Actuary

Innovation in Africa

1.Are we innovative?

2.Drivers of innovation

3.Market trends and

4.What the future might

just look like…

Where are we going?

http://news.antiwar.com/wp-content/uploads/2011/10/africa.jpg 2

http://news.antiwar.com/wp-content/uploads/2011/10/africa.jpg







Munich Re's Life Insurance Survey 2015, Survey Results

Munich Re's Life Insurance Survey 2016 - Ghana, Survey Results

Munich Re's Life Insurance Survey 2016 – East Africa, Survey Results

Munich Re's Life Insurance Survey 2016 – Uganda, Mauritius and Mozambique, Preliminary Survey Results 3

Are we innovative?

28/10/2016 4

The respondents rate different parts of Africa as having

different levels of Innovation

5




Munich Re's Life Insurance Survey 2016 – Uganda, Mauritius and Mozambique, Preliminary Survey Results

Southern Africa was deemed to be the most innovative:

is this just patriotism?

6 http://www.google.de/imgres?imgurl=https%3A%2F%2Fupload.wikimedia.org%2Fwikipedia%2Fcommons%2Fd%2Fd0%2FBlankMap-World-1ce.png&imgrefurl=https%3A%2F%2Fcommons.wikimedia.org%2Fwiki%2FFile%3ABlankMap-World-

1ce.png&h=742&w=1425&tbnid=x4hQBgvPCzyWfM%3A&docid=yA7A-644eSHe7M&ei=DS_8VefYIsPnUs2eqPgC&tbm=isch&iact=rc&uact=3&dur=441&page=1&start=0&ndsp=12&ved=0CDwQrQMwCWoVChMIp5Pjp_SAyAIVw7MUCh1NDwov

6%

7%

2%

11% 14%

46%

6% 8%

Critical

Illness

Moses &

Prophet

Discovery

and Vitality

Comparethemarket.com


UK Actuarial

Convention

Mobile

Money and

distribution

The drivers of insurance innovation in Africa

28/10/2016 7

Diverse environments are fertile ground

• Wide range of socio-economic classes

• Limited public sector safety net

• Inflation, the threat of capital erosion, currency volatility Economic

• South Africa’s SAM vs Solvency II – cutting edge

• At times, less stifling regulation, e.g. data privacy Legal

• Life expectancy and HIV/AIDS

• Longevity, fertility, and the population pyramid

• Family wide solidarity

Demographic & social

Diverse environments are fertile ground

9

• Illiterate really means illiterate

• Financially illiterate

• Unbanked Education

• Near the mobile money gurus

• Newish companies with newish technology

• Internet access Technological

• Entrepreneurial leadership

• Greater desire to find a solution

• Global best practice in many areas

Competitive environment

What happened to the population pyramid?

http://ichef-1.bbci.co.uk/news/624/media/images/72577000/gif/_72577945_population_pyramids_624.gif

With low penetration rates, there is opportunity…

…or is there?

11 Finmark Trust http://www.finmark.org.za/wp-content/uploads/2016/08/gender-and-financial-inclusion.pdf

Financial inclusion has a way to go…

12 Finmark Trust http://www.finmark.org.za/wp-content/uploads/2016/08/gender-and-financial-inclusion.pdf

Trends

28/10/2016 13

What is your employers biggest challenge?

14





Where do you think the company you work for will

spend the most effort over the coming year?

15

* e.g. by reducing underwriting complexity from the point of view of the customer

Customer centric initiatives (customer service in combination with simplifying the

sales process) are seen to be the solution





What is the insurance industry’s biggest challenge?

16

Customer respect and meeting customer needs and lowering costs!

Straight Through Processing

Point Of Sale





All companies and products compete on all dimensions

all of the time. What product aspect do you think is the

best area in which your employer competes?

17 Munich Re's Life Insurance Survey 2016 – East Africa, Survey Results


Different regions see the future of distribution differently

18





What the future might just look like…

28/10/2016 19

Is insurance penetration going to increase?

20

South Africa



Insurance penetration is very low in Africa

Marginal growth off a low base is not much of

a future

Fighting over the pie or growing the pie?

21 Munich Re's Life Insurance Survey 2016 – Uganda, Mauritius and Mozambique, Preliminary Survey Results

Who is going to catch the fish in the sea?

Putting some Kenyan Stats into perspective…

22

Population

Adults Under 15

Under 15

with phone

Adult

With phone

No phone

No phone

Inside has a mobile

money account

Inside has a mobile money

account and buys data

Mortgage

Reminds me of this….

23

Have you heard of USSD?

24

Dial

*120*842*SASA#

Is the future mobile?

25

If banks are replaced by mobile money, will bancassurance become m-surrance?



Dial

*120*842*SASA#

South Africa

26

Mobile money: the new starting point for financial

matters? The new bancassurance customer touch point?

Africa is the Mobile Money leader Financial inclusion is a priority in Africa

http://www.afdb.org/fileadmin/uploads/afdb/Documents/Project-and-Operations/Financial_Inclusion_in_Africa.pdf


*120*842*SASA#

27

Registered number of Mobile Money Accounts has

been growing rapidly

Share of mobile money accounts by

country over the period 2006-2014

12 out of the largest 17

http://data.imf.org/?sk=beadea8c-42be-472e-8690-9af03ffc23d1&sId=1390030109571


*120*842*SASA#

Mobile Payments: The tipping point has not yet come,

but we are nearing it fast in many African markets

28 http://mobilereadiness.mastercard.com/the-index/

Kenya

(40.4

)

Nig

eria (3

1.3

)

Score is a combination of

• person to person (P2P)

• mobile e-commerce (m-commerce), and

• mobile payments at the point of sale (POS)

A score of 100 means that mobile devices have

completely replaced plastic cards

*120*842*SASA#

Mobile Insurance is already on it’s way

29 http://gsmamobileeconomy.com/global/GSMA_Global_Mobile_Economy_Report_2015.pdf

*120*842*SASA#

Conclusion

Africa is not one place

31

Hans Rosling makes the point well in a series of TED talks

We can break out the answers for the South African

survey, and nobody is worried about keeping up with

the competition

32 Munich Re's Life Insurance Survey 2015, Survey Results

There is a progression from internet banking to mobile

banking to electronic money… What about Bitcoins?

33

Who would have said

they had used internet

banking 10 years ago?


Remember that predictions can easily be way wrong

https://en.wikipedia.org/wiki/Bill_Gates

“We always

overestimate the

change that will occur

in the next two years

and underestimate

the change that will

occur in the next ten.

Don't let yourself be

lulled into inaction.”

https://en.wikipedia.org/wiki/Bill_Gates

Questions, comments or any future survey question suggestions?

Thank you for your attention

Contact: Greg Becker

[email protected]

mailto:[email protected]