Safaricom’s medical insurance product targeted at low-income households has registered lower-than-expected uptake leading the firm to change tack to market it to corporate clients.
The Linda Jamii cover was jointly developed with Britam and had a target of reaching one million policyholders in two years from its launch in November 2012.
Official records, however, show that only 36,000 customers had signed up by March, prompting the strategy shift.
“We have re-aligned our approach to focus a more integrated, enterprise-led initiative rather than retail clients,” said Bob Collymore, Safaricom’s chief executive.
“We feel that Linda Jamii is a complex initiative that requires a more integrated approach from our end. This shift translates to a reduction in the number of accounts that we are pursuing.”
Safaricom is shifting the product to target small and medium-sized firms with a staff count of between 10 and 200.
Under the new strategy, the product will be marketed at workplaces in what will give it a form similar to group medical covers targeting large firms. Linda Jamii was targeting low-income earners, offering each family an inpatient and outpatient cover for Sh12,000 per year.
The product hit the market promising to revolutionise insurance provision in the country by allowing families at the bottom of the pyramid to access healthcare by paying premiums through Safaricom’s M-Pesa service.
Families comprising two parents and an unlimited number of children are eligible to access health services once their payments hit the Sh6,000 mark. The policy holder then has six months to repay the balance of a similar amount.
Each family is entitled to an in-patient cover of Sh200,000 per year, an outpatient cover of Sh50,000 per year and a daily hospitalisation payout of Sh500 up to a maximum of 60 days.
Safaricom says it will maintain the same premium rates and benefits in the new strategy.
Britam was hoping that by partnering with Safaricom – which has about 21 million customers – it would cut the cost of signing up new users and collecting premiums.
According to Safaricom, the telco has revised its customer base target down to 200,000 for this year.
Mr Collymore insisted that the one million customer target stated earlier was a medium term goal.