Innovation in Africa, drivers, trends and
what the future might just look like
October 2016
Greg Becker – Business Development Actuary
Where are we going?
Innovation in Africa
1.Are we innovative?
2.Drivers of innovation
3.Market trends and
4.What the future might
just look like…
http://news.antiwar.com/wp-content/uploads/2011/10/africa.jpg
2
Munich Re's Life Insurance Survey
Munich Re's Life Insurance Survey
Munich Re's Life Insurance Survey
Munich Re's Life Insurance Survey
2015, Survey Results
2016 - Ghana, Survey Results
2016 – East Africa, Survey Results
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
Munich Re's Life Insurance Survey
Munich Re's Life Insurance Survey
Munich Re's Life Insurance Survey
Munich Re's Life Insurance Survey
2015, Survey Results
2016 - Ghana, Survey Results
2016 – East Africa, Survey Results
2016 – Uganda, Mauritius and Mozambique, Preliminary Survey Results
5
Southern Africa was deemed to be the most innovative:
is this just patriotism?
Mobile
Money and
distribution
11%
Comparethemarket.com
Moses &
Prophet
14%
7%
2%
6%
46%
UK Actuarial
Convention
Critical
Illness
8%
6%
Discovery
and Vitality
Munich Re's Life Insurance Survey 2015, Survey Results
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-World1ce.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
The drivers of insurance innovation in Africa
28/10/2016
7
Diverse environments are fertile ground
Economic
Legal
Demographic &
social
• Wide range of socio-economic classes
• Limited public sector safety net
• Inflation, the threat of capital erosion, currency volatility
• South Africa’s SAM vs Solvency II – cutting edge
• At times, less stifling regulation, e.g. data privacy
• Life expectancy and HIV/AIDS
• Longevity, fertility, and the population pyramid
• Family wide solidarity
Diverse environments are fertile ground
Education
Technological
Competitive
environment
• Illiterate really means illiterate
• Financially illiterate
• Unbanked
• Near the mobile money gurus
• Newish companies with newish technology
• Internet access
• Entrepreneurial leadership
• Greater desire to find a solution
• Global best practice in many areas
9
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?
Finmark Trust http://www.finmark.org.za/wp-content/uploads/2016/08/gender-and-financial-inclusion.pdf
11
Financial inclusion has a way to go…
Finmark Trust http://www.finmark.org.za/wp-content/uploads/2016/08/gender-and-financial-inclusion.pdf
12
Trends
28/10/2016
13
What is your employers biggest challenge?
Munich Re's Life Insurance Survey
Munich Re's Life Insurance Survey
Munich Re's Life Insurance Survey
Munich Re's Life Insurance Survey
2015, Survey Results
2016 - Ghana, Survey Results
2016 – East Africa, Survey Results
2016 – Uganda, Mauritius and Mozambique, Preliminary Survey Results
14
Where do you think the company you work for will
spend the most effort over the coming year?
Customer centric initiatives (customer service in combination with simplifying the
sales process) are seen to be the solution
* e.g. by reducing underwriting complexity from the point of view of the customer
Munich Re's Life Insurance Survey
Munich Re's Life Insurance Survey
Munich Re's Life Insurance Survey
Munich Re's Life Insurance Survey
2015, Survey Results
2016 - Ghana, Survey Results
2016 – East Africa, Survey Results
2016 – Uganda, Mauritius and Mozambique, Preliminary Survey Results
15
What is the insurance industry’s biggest challenge?
Customer respect and meeting customer needs and lowering costs!
Straight Through Processing
Point Of Sale
Munich Re's Life Insurance Survey
Munich Re's Life Insurance Survey
Munich Re's Life Insurance Survey
Munich Re's Life Insurance Survey
2015, Survey Results
2016 - Ghana, Survey Results
2016 – East Africa, Survey Results
2016 – Uganda, Mauritius and Mozambique, Preliminary Survey Results
16
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?
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
17
Different regions see the future of distribution differently
Munich Re's Life Insurance Survey
Munich Re's Life Insurance Survey
Munich Re's Life Insurance Survey
Munich Re's Life Insurance Survey
2015, Survey Results
2016 - Ghana, Survey Results
2016 – East Africa, Survey Results
2016 – Uganda, Mauritius and Mozambique, Preliminary Survey Results
18
What the future might just look like…
28/10/2016
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Is insurance penetration going to increase?
South Africa
Insurance penetration is very low in Africa
Marginal growth off a low base is not much of
a future
Munich Re's Life Insurance Survey 2015, Survey Results
Munich Re's Life Insurance Survey 2016 – Uganda, Mauritius and Mozambique, Preliminary Survey Results
20
Fighting over the pie or growing the pie?
Who is going to catch the fish in the sea?
Munich Re's Life Insurance Survey 2016 – Uganda, Mauritius and Mozambique, Preliminary Survey Results
21
Putting some Kenyan Stats into perspective…
Population
Under 15
Adults
Inside has a mobile
money account
Inside has a mobile money
account and buys data
No phone
Under 15
with phone
Adult
With phone
Mortgage
No phone
22
Reminds me of this….
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Have you heard of USSD?
Dial
*120*842*SASA#
24
Is the future mobile?
Dial
*120*842*SASA#
If banks are replaced by mobile money, will bancassurance become m-surrance?
South Africa
Munich Re's Life Insurance Survey 2015, Survey Results
Munich Re's Life Insurance Survey 2016 – Uganda, Mauritius and Mozambique, Preliminary Survey Results
25
Mobile money: the new starting point for financial
matters? The new bancassurance customer touch point?
*120*842*SASA#
Africa is the Mobile Money leader
Financial inclusion is a priority in Africa
Munich Re's Life Insurance Survey 2015, Survey Results
http://www.afdb.org/fileadmin/uploads/afdb/Documents/Project-and-Operations/Financial_Inclusion_in_Africa.pdf
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Registered number of Mobile Money Accounts has
been growing rapidly
*120*842*SASA#
Share of mobile money accounts by
country over the period 2006-2014
Munich Re's Life Insurance Survey 2015, Survey Results
http://data.imf.org/?sk=beadea8c-42be-472e-8690-9af03ffc23d1&sId=1390030109571
12 out of the largest 17
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Mobile Payments: The tipping point has not yet come,
but we are nearing it fast in many African markets
http://mobilereadiness.mastercard.com/the-index/
(40.4)
Kenya
Nigeria
(31.3)
*120*842*SASA#
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
28
Mobile Insurance is already on it’s way
*120*842*SASA#
http://gsmamobileeconomy.com/global/GSMA_Global_Mobile_Economy_Report_2015.pdf
29
Conclusion
Africa is not one place
Hans Rosling makes the point well in a series of TED talks
31
We can break out the answers for the South African
survey, and nobody is worried about keeping up with
the competition
Munich Re's Life Insurance Survey 2015, Survey Results
32
There is a progression from internet banking to mobile
banking to electronic money… What about Bitcoins?
Who would have said
they had used internet
banking 10 years ago?
Munich Re's Life Insurance Survey 2015, Survey Results
33
Remember that predictions can easily be way wrong
“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]