Telcos target high-end phone customers with insurance cover
The iPhone 6 Plus. Airtel’s insurance, offered in collaboration with Kenya Orient, covers the iPhone 6 that retails at Sh85,999 and the iPhone 6 Plus, which costs Sh95,999. PHOTO | AFP
What you need to know:
Mid last year, Microsoft signed a deal with Kenya Orient to provide an insurance cover for its brand of high-end Nokia smartphones.
Samsung was one of the first phone makers to get into the insurance business.
Demand for high-end gadgets is growing and so is the level of competition among mobile phone and tablet manufacturers.
New brands are being released every few months, each claiming to have superior features compared to the competition. As the devices hit the market, their prices have predictably hit the roof with phones and tablets now setting customers back tens of thousands of shillings.
Some mobile manufactures have even stretched their warranty period from one to two years, hoping to attract buyers with the comfort that any factory defect will be sorted out promptly.
As the technology landscape evolves, it is not surprising that new players have now stepped in to solve another growing concern among consumers – theft or accidental damage of their pricey gadgets.
These factors – which were previously not included under the warranty cover – are now being catered for during the purchase of high-end devices through insurance.
Airtel Kenya is the latest local company to embrace this business model by offering a free two-year insurance cover for every purchase of the iPhone 6 and iPhone 6 Plus products from their retail shops.
“The insurance package guarantees full cover on damages and theft of iPhone 6 gadgets procured from our Airtel stores,” Mr Jesse Kisenya, the corporate communications officer at Airtel Kenya told Digital Business.
“The aim of the cover is to cushion our customers from incurring extra costs through damage and theft of their high-end phones and the emotional strain that follows.”
Theft or damage
Mr Kisenya said that the insurance offer had pricked the interest of mobile enthusiasts keen on owning high-end phones but who are apprehensive of losing them in case of theft or damage.
Airtel’s insurance, which is being offered in collaboration with Kenya Orient, covers the 16GB iPhone 6 which retails at Sh85,999 and the 64GB iPhone 6 Plus that costs Sh95,999.
With incidences of phone theft and cracked screens on the rise, some buyers are ready to overlook rules like mobile operators locking the phone to one network as a prerequisite to being insured.
Mid last year, technology firm Microsoft also signed a deal with Kenya Orient to provide a similar insurance cover for its brand of high-end Nokia smartphones. The deal covers repairs or replacement of phones which get damaged either through accidental contact with liquids or broken screens, complementing the warranty.
Buyers are required to pay premiums of 1.5 per cent for a Sh70,000 phone and two per cent for one that costs Sh20,000, meaning they will pay Sh1,050 and Sh400 respectively.
When registering, one must have proof of purchase. The insurance value is based on the price of the gadget as well as depreciation. The insurance deal covers devices which are not older than two years from the buying date. Owners can only make a maximum of two claims per device per year.
Automatically activated
Samsung was one of the first phone manufactures to get into the insurance business when it introduced the accidental damage from handling (ADH) warranty in 2013 with the Samsung S4 device. This covers two screen or liquid damages within a two-year period. The cover is automatically activated once a customer registers a phone on E-warranty.
“Each device is allowed two incidents per 24-month period,” Robert Ngeru, vice president for Samsung Electronics East and Central Africa said in a previous interview with Digital Business.
Kenya Orient is the only insurance company offering mobile insurance as a single unit. While other firms also insure mobile phones and tablets, this is usually in included in a domestic cover package where a customer lists their gadgets alongside items other than household.
The minimum annual premium is Sh565 with the amount pegged on the cost of the phone. Usually insurance cover is between eight and 10 per cent of the initial cost of the device.
Kenya Orient covers 16 brands including HP, Motorola, Tecno Mobile, BlackBerry, Nokia, Samsung, G-Tide, Alcatel, Asus and HTC, among others. The insurance firm says that it only covers devices which can access the Internet and that the owner must prove that they took reasonable precautions to keep the device secure.
Other clauses include one which states that loss of the gadget must be reported to the police within 48 hours, even if it happens outside Kenya.
“The eligibility of the phone to be insured is based on the market dynamics such as the age of the phone, which is a maximum of two years, and the brand’s market share,” said Mr Gabriel Kuria, the Marketing and Business Development manager at Kenya Orient.
