How mobile micro-insurance is keeping families alive in Africa

By Oliver Smith 8 August 2016
Mathilda Strom, deputy CEO of BIMA.

23m people are signed up to BIMA's innovative insurance policy.

Most of us don’t think about dying, we live in countries and communities where our families and loved ones will be well looked-after should the worst happen. But that’s not the case for everyone.

Across vast swathes of Africa, Asia and Latin America, adult accident and mortality rates are far higher than those in more developed countries.

At the same time, average family sizes are much larger (around 7) and the majority of these families rely on just one family member for their income to survive.

“If that person should pass away, end up in hospital for a few nights, or be unable to work, then the income from that person could be gone forever,” Mathilda Strom, deputy CEO of BIMA, told The Memo.

“Families, who often live on a day-to-day basis, will lose everything they have just to survive.”

Strom’s business BIMA is solving the challenge of safeguarding these families by combining the rise of mobile phones with an innovative micro-insurance policy.

Micro-insurance for the masses

In 2010 BIMA created the first insurance policy that could be bought on a mobile phone.

“A customer can register in 3 mins over the phone and we take payment from their pay-as-you-go credit on a daily basis for a life or accident insurance policy that covers them,” says Strom.

In countries where phone ownership is between 80% and 100%, but where just 36% of people have a bank account, being able to pay for micro-insurance like this is revolutionary.

In Ghana for example, BIMA offer a 3-month life or accident insurance policy for just 6 Cedi (or £1.16). Once covered the policy pays 50 Cedi per night someone is in hospital (£9.67) or up to 5,000 Cedi to cover their death or disability (£967.78).

It might not sound much, but in a country where the national daily minimum wage is 8 Cedi (£1.54), these payouts can keep families alive.

“It might seem like a superfluous cost when you’re trying to put food on the table, but it’s something that people can do to protect themselves against future risk.”

Indeed it’s something that millions of people are doing.

BIMA now covers over 23m people across the 16 countries it operates in, from Pakistan to Papua New Guinea.

Today the biggest barrier for more people to adopt an innovative micro-insurance like BIMA isn’t technological – most people in these countries have mobile phones, Strom says. Instead a lack of literacy is stopping them from reading and understanding what is being offered.

For people living in countries that lack the kinds of protections and safeguards that we take for granted every day, that’s a big problem.