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Sunday, 27 October 2019

A mobile-based insurance app is threatening to drive brokers out of town.

The service allows clients seeking motor insurance to log onto a firm’s platform to apply, pay and get cover from anywhere and at any time. Upon purchasing a policy, a client receives an electronic version of the policy document via the app.

The online car insurance app, the brainchild of tech firm Griffins, eliminates the need for brokers and salespeople who have been blamed for taking payments but not submitting them to insurers, exposing clients to risk.

Griffin Insurance Company founder Jihan Abass and her team of technology experts created the insurance app to ease the woes customers encounter in dealing with brokers.

“The current insurance process is like using a feature phone in the age of smartphones; why would anyone use an old phone when newer technologies are available,” asks Ms Jihan, a graduate of Oxford University.

TWO COVERS

The company offers two types of cover — comprehensive and the mandatory third party only insurance.

The online application gets rid of the traditional paperwork and offers digital insurance services on the go.

Griffin marketing manager Ummulkher Mohamed said their team is on call around the clock to help customers in an emergency using the latest technology to deliver fast rescue in real-time at the click of a button.

The insured will, at the click of a button, know the nearest police station, hospital, garage or security firm closer to the scene of accidents and seek the help they require.

For instance, when a motorist’s vehicle develops a puncture on a lonely or insecure road, one can request for security from the nearest patrol vehicle whose crew will stay with them until the problem is sorted.

COST

Prospective clients will know the cost of their cover in seconds after uploading data onto the platform. An assessor is then sent to the client to value the vehicle, validate it and issue an insurance sticker.

The platform enables clients to not only buy insurance policy but also other services.

“There is no need to call or drive to your insurance company and wait in line. From your app, you can do everything and so much more, including buying a policy, filing claims, finding a repair shop and requesting an ambulance. Everything is a click away,” said Ms Mohamed.

Clients will also be able to pay less for premiums with flexible cover tailored for their needs. They will pick and adjust their period of insurance by choosing short-term or annual cover, depending on their needs. Customers are also able to pause their cover if they are not using the vehicle and reactivate it whenever they resume use.

COVER DOWNGRADE

Motorists will be able to downgrade their cover to only specific active benefits, excluding holiday and when a car is parked at home.

“You can save some money by paying your cover and only activating fire, theft and flood benefit, third party and accidental damage benefits, which will be put on pause because your car is not on the road, hence no risk,” said Ms Mohamed.

Drivers with less risk on the roads will pay less premium than those frequently on the road and, therefore, perceived to be more likely to be involved in accidents.

If a motorist sells a vehicle, they will have to cancel the policy via the app and return the insurance sticker to Griffin for a refund of part of their premium. However, this applies only to those who have not made any claim as at the time of cancellation and if the policy has not lasted for more than six months.

When a client cancels one’s policy through the app or the firm by issuing a 14-day notice, Griffin will refund the premium for the remaining period of insurance, based on applicable rates.

 

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Published in Telecoms

For developing countries to have lasting development, they must have economic systems that are resilient to shocks such as climate change, natural disasters and conflict.

Recent research has focused on evaluating the long-term effects of these potential economic shocks, and how to mitigate them. For example, several studies highlighted the fact that natural disasters and violent conflict have long-term effects on households.

In a recent study we looked at the resilience of businesses in Côte d'Ivoire after the 2010-2011 electoral crisis. Businesses play a vital role in Côte d’Ivoire’s economy. Small to medium-sized businesses alone employ nearly half the working population and account for around 20% of the country’s GDP. Yet few studies have looked at the mid to long-term effects of adverse shocks on businesses.

Côte d’Ivoire endured a protracted crisis when the incumbent president, Laurent Gbagbo, refused to leave office following his defeat to Alassane Ouattara in the presidential run-off election of 2010. This resulted in widespread violence. The death toll has been put at over 3 000 and the number of displaced people at 700 000. The political standoff ended in April 2011 when military forces loyal to President Ouattara arrested Gbagbo.

We found that businesses did indeed recover, but that there were disparities in how quickly they did based on their size. For example, businesses more able to rebound tended to be those that were smaller (10 employees or less) or those that had access to credit.

After a shock

Although economic activity may contract following a shock, it does not disappear.

Extreme events tend to stimulate the development of informal economic activity. In addition, surviving businesses may benefit from a massive influx of external aid (financial, human and material), or the disappearance of competition. The effects can be differentiated according to the specific characteristics of the businesses and according to their sector.

Despite the brevity of Côte d’Ivoire’s conflict, it had profound consequences. Economic activity was severely disrupted, with an embargo on many exports, the closure of banks, and limited access to certain goods – such as medicines and fuels.

After Gbagbo’s arrest, fighting rapidly died down and the economy was able to recover in the post-crisis years.

Our study involved monitoring the activity of all formal businesses in Côte d’Ivoire (both local and foreign) from two years before the crisis to three years afterward. This enabled us to gain an understanding of how businesses bounced back from the crisis.

Our results show that three years after the crisis, businesses had made up only half of their productivity losses. However, this average masks large individual disparities.

There are several reasons why smaller companies with less than 10 employees were able to bounce back more quickly.

First of all, smaller organisations are more flexible in the face of an uncertain future. Secondly, they are more oriented towards local markets, making them less sensitive to disturbances in infrastructure. Their management system is also far simpler, enabling them to adapt more quickly to changes in the market, and to logistical challenges.

Conversely, businesses with foreign investment, which are more externally oriented and therefore require access to foreign markets (ports and roads), suffered more than local businesses, both during and after the crisis.

These businesses were weakened by restricted access to external markets, in terms of both inputs and sales. Furthermore, they were probably hit particularly hard by the exodus of foreign workers.

Our study provides two other interesting results relating to previous research.

First, businesses using more highly qualified workers or employing more executives were particularly affected. This is because many qualified workers come from neighbouring countries, or more distant ones, such as France, and were the first to flee when the violence began. Many probably never went back.

Access to financing is a major advantage

Our research also highlighted the importance of access to capital to help with business recovery.

The businesses that were the least restricted financially prior to the crisis bounced back with the most ease. Banks suffering from the effects of the crisis probably favoured their older clients over other businesses. Banks in Côte d'Ivoire suffered an increase in delinquent loans in 2011, according to data from the banking commission of the West African Monetary Union (WAMU).

This result confirms a study on Sri Lankan businesses after the December 2004 tsunami, which showed that financial aid enabled a quicker economic recovery.

Helpful insights

Our research sheds interesting light on the construction of resilient economic systems. While calling on qualified workers and executives is crucial for business development, it can be a source of vulnerability when a shock occurs. Businesses that are too dependent on a small number of individual employees can be severely affected by their death or flight.

It is therefore important to find tools to mitigate these vulnerabilities by developing training for executives, engineers and technicians to grow the available pool of human resources, and by encouraging the return and re-training of these workers following a sudden shock (conflict or natural disaster).

Quick access to capital is also crucial for economic recovery. Emergency tools, such as IMF emergency loans, can be developed to facilitate the targeting and granting of loans post-crisis.

Furthermore, banking regulations can also be adjusted for extreme situations. For instance, a moratorium on capital ratios could be considered to enable banks to continue to finance current activity.

Lastly, it appears vital to extend this reflection beyond the banking sector (to insurance and capital investment companies, for example) and to use technological advances (such as mobile banking and fintechs) to mobilise and allocate funds in an efficient and cost-effective way.The Conversation

 

Florian Léon, Post doctorant en économie à l'Université du Luxembourg, Research Fellow à la Ferdi, AUF (Agence Universitaire de la Francophonie) and Ibrahima Dosso, Doctorant, Université Clermont Auvergne

This article is republished from The Conversation under a Creative Commons license. Read the original article.

Published in Opinion & Analysis
  1. Opinions and Analysis

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