Facilitating innovation while managing risk: The case of m-insurance in Tanzania

This paper builds on a previous study which investigated the failure of an m-insurance sprinter in Zimbabwe, EcoLife. The immediate cessation of EcoLife saw 1.6 million adults lose their life cover overnight and created significant damage to the market based on findings from a demand-side survey (see Box 2 for a summary of the results undertaken as part of the research). Key findings indicate that 63% of those surveyed ruled out the use of similar products in future and 42% were dissatisfied with insurance (Leach and Ncube 2014).The study proposed a risk framework that should be used to assess m-insurance schemes and developed a number of recommendations. Using Tanzania as a second case study, we test the framework and recommendations to assess their validity and sufficiency. The objective is to ensure that we balance the need for innovation to drive financial inclusion whilst ensuring financial stability, integrity, and consumer protection (also known as ?ISIP?) (CGAP 2013).

The methodology utilised for this paper includes desktop research, an in-country visit to Tanzania to engage with key stakeholders (including the insurance supervisor, policymaker, MNOs, insurers, technology service providers) and a range of telephonic interviews. For a full list of stakeholders interviewed please see Appendix A below. The intended audience for this document is primarily insurance supervisors and regulators who are increasingly facing challenges in regulating innovative new models.

Africa Corporate Advisors (Private) Limited was commissioned to undertake a survey of 600 interviews between 16 -27 September 2013 in the high density residential suburbs of Harare and Chitungwiza, and the city centre of Harare.