Giants battle in African insurance revolution
Consumers stand to gain from the diverse and innovative insurance products, tailored to their specific needs and circumstances
In the evolving landscape of Africa’s insurance industry, a battle for dominance is brewing between two formidable partnerships that involve telcos. They are already reshaping the continent’s insurance sector by making it more innovative, accessible and inclusive.
At the forefront of this competition are Vodacom and Old Mutual on one side and MTN and Sanlam on the other.
Two months ago, Old Mutual unveiled its strategic relationship with Vodacom, facilitated through its NEXT176 subsidiary, committed to creating shared value in emerging economies. This collaboration marked a significant shift in the insurance landscape.
Old Mutual transferred its mobile estate to Vodacom. The insurance giant integrated Vodacom’s standalone retirement funds into Old Mutual’s SuperFund — setting the stage for a strategic and powerful partnership.
More than a mere business transaction, the move appears to have been a calculated step towards disrupting the status quo in Africa’s insurance sector.
Under the NEXT176 initiative, Old
Mutual plans to embed its solutions in customers’ mobile plans, provide insurance products and bundle financial products in collaboration with large telcos and tech companies.
This approach positions Old Mutual and Vodacom as innovative pioneers determined to bring about positive change in the lives of millions of Africans.
One of the notable outcomes of this partnership is the launch this week of VodaLend Personal Loans, designed for South Africans facing financial challenges in a tough economic climate. In collaboration with Old Mutual Finance, Vodacom Financial & Digital Lifestyle Services introduced the lending platform, offering loans of up to R250,000. The online application process ensures swift responses and convenient account management, catering to both Vodacom and non-Vodacom customers.
This initiative reflects the partners’ commitment to simplicity, convenience and tailored solutions for their customers.
In 2021, MTN and Sanlam announced their “strategic insurtech alliance”, committing $50m (R923m) each to roll out life, phone and car insurance, and basic savings products. In financial 2022, their insurtech business aYo had 17.9-million registered policies across the continent.
While MTN and Sanlam have made significant investments, it would be unwise to dismiss the potential of the VodacomOld Mutual collaboration.
That partnership most likely observed the market response to the MTN-Sanlam initiatives, planning its moves to challenge the first-mover advantage.
Old Mutual’s impressive brand value, surpassing that of Sanlam’s by more than $500m according to Statista, provides a strong foundation for Vodacom to challenge the existing market leaders.
Additionally, Old Mutual operates in 14 African nations, whereas Sanlam operates in 10.
With both Vodacom and Old Mutual having ample resources and flexibility in their balance sheets, they are well positioned to aggressively compete and bring about transformative changes in the insurance landscape.
This rivalry between Africa’s telecom and insurance giants is not just a corporate competition, it is a catalyst for innovation, driving the creation of sustainable and inclusive insurance-focused products.
Access to insurance, a historically limited commodity in Africa, is undergoing a revolution. Strengthening economies and advancing technologies are paving the way for disruptive solutions, breaking barriers and reaching segments of the population previously underserved.
As this battle between the partnerships unfolds, African consumers are likely to be the beneficiaries. Consumers stand to gain from the diverse and innovative insurance products, tailored to their specific needs and circumstances.
The competition between these industry giants promises to elevate the standards of the insurance sector, making it more responsive, customer-centric, and technologically advanced.
The rivalry between Vodacom and Old Mutual against MTN and Sanlam signifies more than just a struggle for market dominance. It represents a commitment to reshaping Africa’s insurance future, making it more inclusive, accessible and innovative.
Customers in Africa will undoubtedly reap the rewards of this intense competition by enjoying a plethora of insurance options that cater to their unique requirements.
There is no going back to old ways — the battle for market dominance is on.
Africa’s insurance landscape is in for a transformative and exciting journey ahead.