CÔTE D’IVOIRE – aYo Holdings, a microinsurance FinTech, has partnered with telecommunication company MTN and insurance company Sanlam Life to launch two innovative insurance products in Côte d’Ivoire.

The two insurance products will contribute towards MTN subscribers enjoying peace of mind.

Two of the biggest operators on the continent, Sanlam and MTN, are forming ties to conquer Africa’s insurance market.

The two companies announced that they are joining forces in an exclusive strategic alliance across Africa, a deal whose goal is to change the face of insurance on the continent.

The two companies said they will build a digital insurance and investment business, which will be an integral part of MTN’s fintech offering. Together they will develop and distribute a comprehensive range of insurance, investment and savings products to the mobile operator’s customers using digital channels.

“The new business will provide people across the continent with easier access to these services, particularly those sectors of the population that have typically been unable to access traditional distribution channels for such products,” wrote the two companies in a joint statement.

After the acquisition of Saham Finances in 2018, Sanlam was thrust into a leading position as far as any non-bank financial house’s African footprint is concerned, serving people across 32 African countries. MTN’s footprint expands across 21 countries, most of which are in Africa.

“It gives us great pride to be able to partner with MTN to build the best possible range of solutions in the insurance and investment arena for consumers.”

Paul Hanratty – CEO, Sanlam

The alliance opens the door to new markets where Sanlam does not yet have a footprint. Countries where MTN has a presence, and Sanlam does not, include Sudan, South Sudan, Congo-Brazzaville and Liberia.

But the alliance will potentially also give the insurer power to attack with two different brands in Africa’s biggest economy, Nigeria, given that MTN has successfully penetrated that. MTN Nigeria’s subscriber base stood at 76.5 million at the end of 2020.

The two companies reckon that this new business has the potential to pre-empt and adapt to digital disruption quicker in markets where both Sanlam and MTN operate.

MTN has been aggressively growing its fintech business lately. Its fintech operations include mobile payments, lending, insurance, savings and m-commerce.

MTN said the aYo platform will form the base of the alliance with Sanlam.

“This strategic alliance has the potential to change the face of insurance in Africa by leveraging the brand and reach of MTN, together with Sanlam’s licensing, insurance expertise and extensive footprint,” stated MTN.

In the initial period, the alliance will be chaired by MTN’s Group president and CEO Ralph Mupita and Sanlam’s CEO Paul Hanratty will be the deputy chair.

“We are excited by MTN’s development of modern mobile financial services for the benefit and empowerment of the African consumer. It gives us great pride to be able to partner with MTN to build the best possible range of solutions in the insurance and investment arena for consumers,” said Hanratty.

Mupita said the collaboration offers MTN the opportunity to enhance its existing fintech offering and drive financial inclusion in Africa more.

“Sanlam is the ideal partner as the leading insurance and investment business across Africa, and with partnership key to its strategic and execution approach,” he said.

In its 2020 integrated report, MTN said that even though it has built a scale fintech business, its ambitions were to double its size over the next three to five years and broaden the mix of products it offers. 

The Sanlam alliance is not MTN’s first attempt at partnering with a big insurer to boost its fintech offering. The company had a joint venture with Momentum Metropolitan Holdings (MMH), which gave birth to MTN’s subsidiary, aYo Holdings Limited.

The micro-insurance InsurTech startup, launched in 2017, was a 50/50 joint venture between the two companies. But MTN increased its stake to 75% last 2020 and eventually bought MMH out in June.

aYo now has more than 13.6 million registered policyholders and 6.3 million active policies. It is targeting over 30 million policyholders by 2025 with this new alliance.

In the six months ended on 30 June 2021, aYo collected US$6.5 million in premium income and generated US$3.9 million in service revenue.