EcoSure Moovah is another fairly new motor insurance product that hit the market a few months ago. Having been launched by a telecommunication company (and then spun off into a tech conglomerate), the expectation would have been that the product was a re-imagination of insurance.
FBC re-imagined, EcoSure pulled an Econet
FBC’s MyDrive is a departure from how insurance companies are selling motor vehicle insurance in Zimbabwe. Instead of fixing premiums based on time arbitrarily as has been done for decades, MyDrive premiums are based on usage of the vehicle. You pay premiums based on the kilometers you drive.
EcoSure on the other hand didn’t attempt to redefine anything. They bundled EcoSure services like funeral cover, other Econet services and stuff like petrol coupons into the insurance package and went all out to publicise it as the best deal ever. This is a very Econet approach and it has won them marketshare in several verticals.
My concern when Econet or Econet associated companies launch products is usually the same. They ride too much on their dominance in the telecoms sector. Products get to be interpreted through the lens of owning a network hence bundling up of features and services happens a lot.
Sometimes the best products are those that just do the single job to be done and do it well. When I am shopping around for insurance I want a product that meets my needs for insurance in as personalised a manner as I can get, I am not looking for airtime.
This doesn’t mean FBC has won
The Econet tac tic has worked in the past. They have been able to sell products on the power of their brand and heavy marketing. When these guys are doing even the most insignificant of things they go all out shouting from the top of every hill and ant hill.
Also giving out airtime works in the mass market more than having the better product. Folks are not rational in their buying decisions. They buy into brands, they want an idea of winning, they want to go to the guy who shouts the loudest. If you don’t believe me, go at a kombi rank in Harare and observe how kombis that have the loudest touts get filled faster than the rest.
The FBC product needs tweaks
The first sticky thing for me is that FBC MyDrive has a minimum premium of 5 000km mileage. This defeats the purpose of being flexible. I suggest that they allow people to pay for way lower mileage. Right now they are forcing customers to be covered for the whole year but their product then becomes just like any other product.
Another question that can arise is what happens if I have insured my vehicle for 5 000km and I only drive it for 1 000km in the year. Will I still be covered in the new year? Do I need to top up for 1 000km so I remain covered for the minimum 5 000km? If so, how then does their offer become cheaper?
I am also wondering a lot about whether MyDrive has comprehensive cover. How are they able to insure against theft based on mileage?
These questions need to be answered simply and immediately so their product can be understood easily by the market and be appreciated for how innovative it is.
The effects of regulation
Regulation is probably the biggest thing that contributed to the setting of 5 000km as the minimum mileage that FBC can insure. The Insurance and Pensions Commission (IPEC) though is quite open to innovation and believes in sandboxing new technologies. FBC will need to work closely with their regulator if they are to make MyDrive more meaningful and as flexible as I am sure they want it to be.
B2B is the low hanging fruit and they can beat Moovah decisively
So I think EcoSure Moovah has an advantage in the mass market because consumers are not rational. The arena where rational buying happens though is B2B. People who buy on behalf of companies and institutions use spreadsheets and other tools to weigh cost/benefit.
This is the reason why technological disruption is easier to observe in B2B markets than in consumer markets because B2B markets are almost perfectly rational. If indeed MyDrive saves 50% on premiums, FBC should take it to business buyers who own and manage fleets. They will be excited to see MyDrive’s impact on their spreadsheets.
Most consumers in Zimbabwe are not even insuring their cars to be covered in case there is loss, they are doing it to meet the minimum requirements of the law. Selling to them is not so easy, I suggest that FBC concentrate on organisations for now.
The word disruption is thrown around quite a lot but FBC MyDrive truly is a disruptive innovation and disruptive innovations can conquer B2B spaces