Applicant name: MFS Africa
Applicant type: Private Company
Headquarter City: South Africa
Headquarter Country: South Africa
Innovation Name: Hospital Cash
Innovation Type: Service
Category: Innovation Remittance Solution
Status of Innovation: In-Market
Innovation Active Since: 09/01/2020
Demonstrate what technology your product has that is different from the market:
The problem: Despite remittances constituting a lifeline for many households in Africa, insurance products that enable the sustained flow of remittances remain unexplored. Senders often face many risks such as unexpected shocks, such as hospitalization, accident, or death. This is exacerbated by the fact that many migrants work in the informal sector and are unable to access basic safety nets.
The solution: Embedding insurance at the point of sending remittances will help fill this gap as financial security of loved ones back home is top of mind when migrants are sending money and for many of them embedded insurance would be their first insurance cover.
MFS Africa has led the launch of an embedded insurance product linked to remittances in partnership with MTN Rwanda and Inclusivity Solutions. The pilot product which started in 2020 brings together the three tech stacks by creating a flexible and customizable technology that links Inclusivity Solutions’ insurance products with MTN Rwanda’s remittance product.
Explain the functionality. The Hospital Cash product is an embedded insurance product linked to remittances. It is a type of insurance policy that provides protection to individuals and families who send remittances from Rwanda. Specifically, Hospital Cash covers loss of income, and additional non-medical expenses, that users incur when hospitalised. The product’s loyalty-based model is simple, it only requires a single remittance transfer to qualify for the cover, with the following criteria:
- Basic cover: Customers who make at least 1 remittance per month qualify for US$5 per night.
- Double cover: Costumers who send between $30 and $74.9 per month qualify for US$10 per night.
- Triple cover: Costumers who send between more than 74.9 per month qualify for US$15 per night.
Documentation and claim submission can be done via channels: inbound calls or in-person visits to outlets, remote via WhatsApp, App or the USSD menu. Claims are paid out directly into mobile money wallets, enabling beneficiaries to store the fuds securely and digitally.
Explain who followed your example and deployed the same technology and timeframes. Inspired by the product in Rwanda, in 2021 Orange Money Côte d’Ivoire partnered with Inclusivity solutions to launch a mobile money linked insurance product. Orange Money launched a hospital cash, and a life insurance product linked to its mobile money services.
Do you know if this innovation is specific to only one market and which one? Considering the unexpected risk that migrants face and the social bond between migrants and their families back home, it is vital to create means of safeguarding remittances flows in most remittance-sending countries. Our research in Rwanda, Kenya, and Côte d’Ivoire proved that there is a strong demand for this product in other African markets. Results from the pilot in Rwanda revealed a strong uptake: 109% surge in remittance flows amongst qualifying customers and surpassing the target customers qualifying for the cover by 200%. Replicating these results in different markets will be easier due to Inclusivity Solution’s access to MFS Africa’s footprint i.e., network of MNOs and MTOs. The flexible nature of the product allows for customisation through a customer centric design. This will help further adjusting the product to fit the needs of the end users (e.g., Funeral coverage, medical cover, etc.). MFSA Africa is developing a new version of the product which is going to be MTO-led, in partnership with a UK based MTO, Paysend.
Innovation Description. Linking insurance to remittance is an innovative and intuitive step towards promoting financial inclusion and resilience whilst safeguarding remittances flows:
- It addresses two significant challenges that many families in Africa face: I) lack of protection in case of an unforeseen circumstances such as hospitalization which prohibits them from income-generating activities. II) Safeguarding sender’s duty of support towards their family, which allows them to continue to fulfil their support commitments to their loved ones back home (remittances).
- This product is a tool for driving usage and reducing churn. The loyalty-based model enables users to access higher levels of coverage with increased usage.
- Documentation submission and claims can be done via several channels such as inbound calls or in-person visits to outlets, and remotely via WhatsApp, App or the USSD menu. Claims are paid out directly into mobile money wallets, enabling secure and digital store of funds.
What was the inspiration for this innovation? Remittances are a lifeline for millions of Africans depending on their families abroad. Therefore, designing products that enable the sustained flow of remittances or enhance the resilience of senders and receivers will move the needle in protecting them against unexpected financial shocks. Hospital Cash was introduced to provide a lifeline for remittance senders, who often do not have access to basic safety nets to de-risk their duty of support to their families back home. The aim was to incorporate insurance at the point of sending remittances as this approach will also address one of the main challenges that traditional insurance companies face when targeting remittance senders i.e., high costs of acquiring customers.
Who can benefit from your innovation most? The primary target customers for this product are individuals who do not have access to traditional insurance, this includes migrant workers in informal sectors and migrants working part-time jobs. Through implementing a reward-based approach where coverage expands with increased sending amounts even the most infrequent remittance senders will benefit from the product. The nexus of the product is around safeguarding remittance flows and by extension it also provides benefits to remittance recipients in countries like Kenya and Uganda (i.e., the main sending destinations from Rwanda) who are most dependants on consistent and frequent remittance flows.
What are you most proud of about your innovation? In piloting the Hospital cash product, the goal was two-fold – 1. Introducing insurance to previously uninsured populations via an existing product i.e., remittances and 2. Promoting and increasing digital remittances from Rwanda. The pilot project has been very successful in that we saw an uplift in the remittance service and number of active policies held to date (~ 460,000). Moreover, the loyalty-based model incentivized users to remit more, which led to an average 9.3% and 19.7% increase in transaction volume and value on monthly basis, respectively. The monthly criteria for qualifying for a “Double” or “Triple” cover also led to a 38.3% decrease in the average lag time between transactions.
Why do you think you should win this category? We believe this product deserves to win due to the below reasons:
- Innovation: Insurance linked to remittances is a niche product that previously remained unexplored. Its potential is untapped in markets where remittances constitute a large proportion of the GDP.
- Promising uptake: The phenomenal response the product has seen is a first-hand proof that our hypothesis about embedding insurance in the remittance journey was correct. mentioned, there was an over 109% surge in remittance flows amongst qualifying customers.
- Scalability and ease of customisation: The potential for scale and customization for this product is unmatched. The combined capabilities of Inclusivity Solution’s “plug and play” product and MFS Africa’s network of partners allows for similar products to be launched and adapted in any market.
- Customer-centric design: The product is powered by human-centered design (HCD) and research, offering a contextually relevant product for different markets and MNOs and MTOs alike.
Full Name: Nika Naghavi
Role: Group Head of Growth
Full Name: Jessica Nitiema
Role: Knowledge Manager