Thursday, 8 December 2011

Why UAP insurance SalamaSure Personal Accident cover will FAIL terribly

UAP's new personal Accident cover
Today we focus on an insurance product set to be launched in the market by UAP insurance company. Salamasure is a unique personal accident insurance cover from UAP covering injury or loss of life resulting from accident.
The policy covers Accidental loss of life, permanent disability, medical expenses incurred as a result of the accidental injury, last expense incurred for funeral arrangements and cost of artificial appliances like wheel chairs to the insured amount
Unlike other insurance products all you need to sign up for this product is just a phone by dialling *827# and follow the simple instructions. Premiums shall be paid via M-pesa pay bill number. Claims also shall be reported and paid via Mpesa.
Diana from UAP and Mr Mudibo from Forward Vision Commucations visited the University of Nairobi to seek partnerships with professional clubs in the university as they roll out the product. Forward vision communications probably handles media buying, placement and relations and PR  for UAP. I listened keenly through the presentation and I analyzed the product to come up with this blog post.I still have a major issue of their multi level/marketing way of paying the agents. The hustle of signing up one person will get you 5bob,if the client pays the first premium you earn an extra 15 bob. With every renewal the agent earns 5bob per client he/she brought on board. I reserve my comments on that; however I feel the remuneration isn’t attractive enough to get university students to work motivated for that kind of pay. Its kabete PESA!!The School of Business!!!

These were my views after analyzing the product’s strengths and weaknesses and the opportunities for UAP as well the threats and what every department needs to check before they roll out the product.
SALES AND MARKETING.
Salamasure being a product targeted at the mass market needs a lot of visibility on print, radio and TV media. However being an insurance product a few factors were overlooked. The market you are targeting is peculiar and special in its way. This segment of the market comprises mainly of late adopters. They do not take up products quickly, wait and watch what other people are doing. Do not expect product adoption and diffusion to happen immediately
Secondly you have to have a physical location near these people in every corner of this country. Look at equity bank, the bulk of their customers are the mass market, Equity banks’ internet and Mobile banking services haven’t done well because these people want things explained to them, they need a location where they can go and ask questions and get answers. In short I am saying Salamasure will not succeed if people are going to transact via the mobile phone!!! Not an insurance product!!!This market needs paper work, they need to sign papers to feel that they are part of a deal. They need evidence! It shall become an uphill task when people just sign up via a phone, make claims on phone, get payment via phone….the convenience you are offering these people isn’t what attracts them to a product. The rich, busy professionals and businessmen will gladly adopt this and sign up. They will love it for the speed and efficiency. Look at equity bank, Long queues, these people look for an interaction with their service providers. They have ATM cards but still a bulk of them will queue just to check their account balance other than checking on the ATM or using the SMS banking to check their balances from home. Look at Equity bank’s agency banking, it’s a hit!!!A revenue model  that has turned to a cash cow. Why? Because their customers want that contact. Being insurance product you have to put in place a distribution network and locations next to the people. You have to leverage on either safaricom or Equity bank’s network and goodwill in that market. For equity bank you may use their banking halls as pay points or agents for this product, or even post offices country wide. For safaricom you may get them into a deal where all their M-pesa agents become SALAMA SURE agents and people can sign up from them. The idea of using matatu saccos as another network to push the product is a great idea. This will roll out the product to the masses in a short while!!Kudos. The product also needs a lot of experiential marketing, UAP as brand needs to interact a lot with the masses as part of the roll out. Placing adverts in the media will not work for this target market. Differentiated targeting has to be employed and communicated on promotions and advertisements during the roll out.
This product could be a game changer in the insurance industry if well marketed!
This could be a revolutionary product, an award winner if the idea is refined a bit and you brought the right partners on Board.

PR AND COMMUNICATIONS
The launch strategy has to have a solid communications department to handle customer complaints, claims and misinformation. UAP’s strategy of using independent ‘agents’ like university students and other opinion leaders in our villages is a major risk. Students for example are bound to give false promises to the public in order to sign up more people to make a few more bucks. This will give rise to a major crisis when the public makes claims on false promises. Secondly the mass market is mainly comprised of the not so uneducated people. These people will launch claims on events not covered by the policy hence there has to be a proper team in place to handle such factors and keep the good image UAP.

Despite the above, I will keenly watch this product’s uptake in the market, check out for customers fears and resistances. I am so interested at how this works for UAP.
All the Best UAP.
For feedback
muthurikinyamu@gmail.com
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