Preferred Life eager to shake cut-throat insurance market

Ready to rumble: Afitile expects funding to be wrapped up soon
Ready to rumble: Afitile expects funding to be wrapped up soon

A team of consulting actuaries plans to set up the country’s newest life insurer using data analytics and blockchain technology to carve out space in the competitive sector, BusinessWeek has learnt.

If successfully registered by the Non-Bank Financial Institutions Regulatory Authority (NBFIRA) , the new firm, to be known as Preferred Life, will be the ninth life insurer in a market dominated by established giants whose collective assets amounted to P17.2 billion by the end of 2019. One of Preferred Life’s developers, Edwin Puso Afitile told BusinessWeek the company was finalising its funding to approach NBFIRA within the next two months.

“It is a requirement by NBFIRA that we detail the equity position,” Afitile said. “I expected the regulator to take another three to six months reviewing the licence and if successful, we expect full operations sometime around February.” According to NBFIRA regulations, prospective life insurers are required to maintain a minimum capital of P10 million, amongst other requirements.

Prospective life insurers are also required to submit a business plan, including financial projections, a five-year forecast of financial results as well as other evidence that the business will remain solvent and not disadvantage policyholders. Afitile said Preferred Life’s strategy would revolve around enhanced value for users at a more competitive price than those prevailing in the market.

“We aim to deliver value for money by delivering products that are appropriately priced using the data we have gathered,” he said. “Value for money means a higher sum assured for the same price or a lower price for the same sum assured.”

He said Preferred Life would use data analytics built up by its parent company, Empirica over the years, to appropriately target the local market. Afitile said the consulting actuaries behind Preferred Life had built a repository of data that would be leveraged to engineer products for Batswana. In addition, Preferred Life plans to boost its customers’ experience by using technology such as blockchain.

“We are going to enhance user experience through the block-chain platform we have built called Malebogo/Bubblegum,” he said. “Bubblegum or Malebogo is an application that will help us use QR codes for accessing fund values, launching a claim and doing underwriting.

“Someone will be able to go to our chain of medical doctors and authorise underwriting results via the Bubblegum.”

Afitile added because the brains behind Preferred Life were actuaries, they were cut out to manage risks and also knew the business of how to ensure successful life insurance companies.

According to NBFIRA data as at December 2019, the country’s biggest life insurer was Botswana Life with gross premiums written of P2.6 billion, followed by Metropolitan Life and Absa Life.

Editor's Comment
Seamless Business Environment Needed Post-COVID

The country was also classified as the least corrupt in the world with strong anti-graft checks and balances. With these assurances, investors were guaranteed safety on their investments and returns. That is no longer the case. Several countries like Namibia, South Africa and Mauritius have done well over the years and overtaken Botswana as attractive places to do business.Therefore, when countries that Botswana is competing with for a piece of...

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