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Mobile Insurance: Comparing Low-Touch and High-Touch Distribution Models

By Richard Leftly

This article, written by Richard Leftly of MicroEnsure, originally appeared on gsma.com as part of their series on mobile insurance. 

Mobile insurance has established itself as one of the fastest-growing business models in mobile financial services in emerging markets.  Although MicroEnsure did not invent mobile insurance, many of the fastest-growing models are now based on the “freemium” product we built for Tigo Ghana in 2010, which has since launched in 13 other markets across Africa and Asia.

As mobile insurance has grown, a debate has emerged regarding high-touch vs. low-touch distribution models.  In high-touch models, agents are used to sell and educate customers, whereas in low-touch models, the majority of sales and education occur through a mix of above-the-line channels, such as radio, TV, billboards; and below-the-line channels, such as SMS, USSD, balance notification, and IVR.

The initial logic for utilising agents in MicroEnsure’s original model in Ghana was that because 90% of mobile insurance customers were previously uninsured, these customers would need a great deal of explanation about the product. However, during its initial roll-out, MicroEnsure discovered that customers were more than willing to take up a free mobile insurance product based on its perceived value and connection with a mobile operator brand, whether or not an agent was present to explain the product.

Keep reading on gsma.com >>

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