A recent case study on m-insurance in Zimbabwe highlighted the need for regulators, supervisors, and policymakers to recognise the risks associated with the rapid growth of m-insurance initiatives. The study developed recommendations and proposed a risk framework that could be used to assess m-insurance schemes, taking into account the key risks that are likely to arise as m-insurance market develops.
As a result of this study, FinMark Trust commissioned Bankable Frontiers Associates and Cenfri to test the risk framework and recommendations developed from the Zimbabwean experience, with the aim of assessing their validity and sufficiency in assisting regulators to promote innovation, while ensuring financial stability, and consumer protection. Using Tanzania as a case study, the paper assesses the risk of the m-insurance market, and presents a comparative analysis of the regulatory landscape for m-insurance in Tanzania and Zimbabwe.
- Please click here to download the complete study on Managing risk while facilitating innovation: The case of m-insurance in Tanzania (PDF, 1.8MB)
Tanzania is one of nine countries with more registered mobile money accounts than bank accounts which makes it a highly suitable country to test the risk framework and recommendations. On the back of the success of mobile money, nine m-insurance initiatives have been launched, and a number are currently in the pipeline. Although not all initiatives have been successful, the risks arising from m-insurance in Tanzania are found to be relatively lower than in Zimbabwe, largely due to the fact that Tanzanian regulators had already set some necessary safeguards in place, and that none of the m-insurance initiatives had achieved scale.
The study finds that the risk framework and recommendations provide a useful way for regulators to manage risk in m-insurance markets. The risk framework analysis should be extended across other countries, in order to gain a comparative view of the risks that are introduced to the market as m-insurance initiatives continue to grow across the region.