Kenyan leading telco Safaricom is set to disrupt gadget insurance in the country by partnering with insurance cover providers to insure phones against risks such as theft, breakage, and accidental damage. The initiative, fronted by Safaricom Insurance Agency Limited, seeks to cash in on Safaricom’s strategic foray into insurance at a time when it is leveraging an already established customer base and infrastructure. Here is a sneak peek at this innovation:
Scaling Up Device Insurance in Kenya
Safaricom ventured into the insurance business with a pilot dubbed SIAL where it has already issued over 117,000 policies at a premium estimated to be worth Ksh 22 million and gave a sum assured of Ksh 975 million. These policies were sold alongside phones on the highly affordable “Lipa Mdogo Mdogo” payment plan, showing how much demand for gadget insurance is in Kenya.
Insurance Tiers
The proposed insurance products shall be three-tiered to include:
Screen-only Protection
- Covers accidental screen damage.
Screen and Damage
- Expands to include additional physical damage.
Comprehensive Coverage
- Includes screen damage, device damage, loss, and theft.
Each of these is targeted at different consumer needs with the aim of ensuring affordability and flexibility.
Risks Covered
The insurance products will cover:
- Accidental damage, including liquid and fire damage.
- Loss due to theft or natural disasters such as floods.
- Mechanical or electrical failure
- Damages or loss while abroad
Safaricom will be partnering with insurers offering prompt claim approval, within 24 hours, and who can quickly repair gadgets within seven working days, while applying stringent fraud detection mechanisms.
A Paperless Approach
The telco targets a seamless way of filing claims through a digital platform accessible either in Safaricom shops or by the customer directly. The innovation is in line with the firm’s commitment to digital transformation.
Economic Impact and Reach
Still, on insurance, Safaricom can drive the country’s insurance penetration using over 33.5 million active users transacting over Ksh 1.74 trillion every month via M-Pesa. Currently, insurance penetration in the country is below 3 per cent.