MTN to Power Insurance for Africans with New Salam Deal

MTN to Power Insurance for Africans with New Salam Deal

Africa’s largest telco; MTN has partnered with the biggest insurance company in the continent; Salam to offer insurance and investment services to Africans.

This deal will combine the reach of both companies.

This MTN & Salam Union received regulatory approval on Monday, 31st of October will be implemented through aYo holdings, which is MTN Group’s insurance subsidiary. MTN and Sanlam will each own 50% of aYo Holdings.

aYo holdings is a joint microinsurance venture between MTN and Momentum Metropolitan Holdings (MMH) that runs a pay-as-you-go model that allows customers to pay for insurance with airtime or mobile money.

Sanlam, which has a presence in 14 African and two Asian countries, acquired FBN insurance one month ago to signify its full entry into the Nigerian insurance market.

The MTN & Salam marriage will leverage Salam’sinsurance license in this partnership, allowing MTN to start offering insurance services in Nigeria.

Nigeria has a 0.5% insurance penetration which means the market requires more innovation. MTN wants to use its technology, reach and its retail know-how to deepen insurance adoption in the country.

Remember that in April of 2022, MTN entered into Nigeria’s financial services sector when it acquired a Payment Service Bank (PSB) licence. However, the license does not cover offering insurance services, which is a key aspect of achieving financial inclusion.

With the Salam partnership, MTN gets to use Sanlam’s insurance licences to offer insurance services to its already wide network, while Sanlam can leverage the telco’s MOMO agent network, which stands at 188k and its mobile subscriber strength of 74 million to offer to sell its insurance products.

While there’s still a cultural problem with Insurance on the continent. Partnerships and innovations like this MTN & Salam deal will go a long way to improving the poor insurance penetration on the continent.

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