Field trip Just click before going on a day trip – travel and burial insurance in Zambia

By Thomas Loster From conference proceedings to practice: The 14th International Microinsurance Conference once again featured an excursion. Conference participants were able to see on the ground how insurance solutions are designed and accepted by customers. On 9 November 2018, we accompanied representatives from Madison LIFE to the central bus station in Lusaka. Patrick Kasase Mumba is General Manager for Microinsurance at Madison Life Insurance in Zambia. He was the leader of the excursion and, to begin with, brought us to the Millennium bus station in the capital. There we met 42-year-old insurance broker Evans Ngosa. In the station it was hot, loud and muggy. Buses were manoeuvring into line, horns were sounding and all the diesel engines were rumbling. Evans waved us over to an area beside a waiting room with a pool table. He has been travelling around as a sales representative for MLIFE for 15 years. “I meet one of my main target groups here,” he tells us. “Bus drivers. We have just launched a travel and accident insurance product (Madison Domestic Travel Insurance Policy).” The cover has been designed for anyone who travels – school pupils and students, business people and entire families – and, of course, professional drivers too. “They are constantly on the move. I have 280 customers here,” Evans told us. The cover is well graduated with a modular structure. Standard, silver, gold and platinum versions are available depending on the payment amount. The risks covered include accidental death, disability resulting from an accident, medication and hospital costs. “You can buy the policy for yourself or for a group. In the latter case, up to 10 people can be covered,” he explained. “Or, of course, you can take out cover for the whole family.” There is even a student rate. Spontaneous customers can insure themselves for a single trip or journey – or purchase permanent travel insurance. “A single trip costs 5 kwacha (roughly €0.40),” said Evans. The monthly premium for long-term cover is 60 kwacha (approx. €4.50) with a payment amount of 12,000 kwacha (approx. €925). For a monthly premium of 40 kwacha (approx. €3), you receive a payout in the event of a claim of 6,000 kwacha (approx. €460).

98 — At the central bus station, Patrick Kasase Mumba (left) from Madison Life Insurance in Zambia introduced us to Evans Ngosa (right), who looks after 280 customers in the station. Singhala Evans (centre) is a bus driver. He has a burial insurance policy and told us his story. 99 — Evans Ngosa patiently answers questions from participants on the excursion about the Tilitonse burial insurance and the new travel cover.

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Tilitonse burial insurance – a real success story “But our real hit is Tilitonse,” the agent told us proudly. “Tilitonse” roughly translates as “we stick together”. This burial insurance policy was launched in 2012, and by 2018 had attracted an astonishing 1.4 million customers. “We are very satisfied,” said Evans, “but we want to achieve even more. Our next target is 1.7 million customers.” What are the reasons for this impressive success? We talked to Singhala Evans, a bus driver and father, who swears by Tilitonse. He recently lost his daughter. “When my little one died it was a huge shock for the family. The pain of the loss was, and remains, extreme, but here in Zambia that is just one problem. The financial impact from deaths can take on incredible proportions,” he explained. “I had Tilitonse, which was a great help, even though I had chosen much too low a sum insured. I got 1,000 kwacha (just under €60), just enough to pay for the coffin.” We noticed from talking to Singhala that people don’t like talking about death and loss. “Of course everyone wants to have a decent burial,” he said. “But here in Zambia, there is much more to it.” The custom is to pay your last respects to the deceased, and to support the mourners in your home. A standard burial lasts three days, but if relatives who live far away attend, it can even go on for five days or more. Depending on the size of the family and the surroundings in which you live, it can easily involve several hundred guests. “You have to provide food to each guest twice a day,” said Singhala, “and you need at least one bus for the journey to the cemetery. Each bus costs roughly 600 kwacha (around €45). And finally, the burial has to be solemn, dignified and properly organised. This can mean financial ruin, for poor families in particular.” “Tilitonse is our central product,” added Evans Ngosa, “and I can tell you why.” Like the travel insurance, the product has a very modular structure, and can be customised for all kinds of family situations. It can even include children up to 18 years of age in individual age categories. “Prices start from 1 kwacha (approx. €0.07),” said Evans. A health check is not required. “Even the very elderly can be covered,” he added, “up to the age of 85. But there are blocking periods for suicide or foreseeable death.” The waiting period is generally six months. One of the great advantages with Tilitonse is straightforward claims processing, as well as the convenience of being able to take out cover using a mobile phone. You simply enter a short code on your mobile phone, and you are directly insured. Like everywhere else in Africa, the use of mobile payment systems (Mobile Money) is spreading here. And needless to say, Tilitonse is perfectly designed for this. The code is made up of the name, date of birth and sex of the insured person. Nothing more. A simple, free SMS is all you need to register new customers. Patrick Kasase Mumba interrupted us to say that we needed to move on. “Tilitonse is a really good product,” he declared. “We have an excellent claims ratio of around 25 %.” He estimates that the annual premium volume is around 5m kwacha (approx. €385,000). As we take our leave, we asked him if he could remember any special cases. He nodded and said that there had once been a very unusual claim. “We had just registered a new customer, when a few hours later we heard that she had been killed in a road accident,” he related. “There is no waiting period for accidents. We paid out the full sum insured within 24 hours. That was a huge help for the family.”