In India, Airtel Payments Bank—the mobile-money subsidiary of operator Bharti Airtel—and Bharti AXA Life Insurance have partnered to offer a government-backed life insurance plan. The plan, called Pradhan Mantri Jeevan Jyoti Bima Yojana (PMJJBY), was designed to increase penetration of life insurance services among the underinsured. The PMJJBY service, underwritten by Bharti AXA Life Insurance, offers an INR 200,000 (US $2,8692) coverage for a nominal premium of INR 330.00 (US $4.72) per year and can be purchased by all existing or new Airtel Payments Bank savings bank account holders age 18 to 50.
At first, PMJJBY will be available at 100,000 Airtel Payments Bank Banking Points across the country. Airtel Payments Bank plans to expand the service availability to over 500,000 banking points to enable the product to reach remote areas of the country.
Mobile-money services are now offered very widely by mobile operators, either on their own or in partnership with commercial banks or other financial institutions, and they have proved popular and useful in many markets, especially those with a relatively large proportion of unbanked persons or those with less than average access to financial services. In such environments, operators have stepped into the breach, allowing customers to have more powerful and effective financial lives while also seamlessly integrating their mobile services with financial services in ways that strengthen the operators’ brands and build customer loyalty.
The next step appears to be expanding the notion of mobile-based financial services beyond simply transferring money or paying phone bills. Life insurance is one financial product that has potentially universal appeal while falling outside the typical purview of both operators and banks. By partnering with AXA, a global insurance provider, Airtel is now able to help not only the unbanked but also the uninsured.
The per-year cost of the insurance premium is extremely low and therefore should be appropriate for the target demographic, which is basically the poor and uninsured. Of course, the amount of the coverage itself is also not very large, but again, it is likely to fit the circumstances of those who would buy it. By providing this insurance, we think Airtel could achieve something that goes beyond simply driving revenue and increasing customer satisfaction and loyalty—although those are worthy aims. In the larger sense, the operator could increase the sense of financial inclusion among those who traditionally have been more or less marginalized in the Indian economy. That, in turn, could motivate those people to participate in more different kinds of financial transactions and to become, in general, bigger consumers of more products—including both traditional and value-added mobile services.
As the Indian economy is growing significantly now and welcoming participants from a broader section of the population than ever before, this initiative seems well timed.