How is Mobile Money used for insurance in Zambia?

What Mobile Money is and who regulates it

Mobile Money is a wallet linked to a phone number that can hold, send and receive money without a bank account. Zambia's three mobile network operators each run a wallet: MTN Mobile Money, Airtel Money and Zamtel Kwacha. Payment systems, including mobile money, are regulated by the Bank of Zambia under the National Payment Systems Act, while the mobile networks themselves are regulated by ZICTA.

Paying premiums from a wallet

There are two common patterns. In the push pattern, the customer initiates payment from their phone by dialling a USSD menu or using the operator's app and entering the insurer's merchant code and policy number. In the pull or payment-prompt pattern, the insurer's system sends a payment request to the customer's phone, the customer approves it by entering their PIN, and the money moves. The prompt pattern is more convenient for recurring premiums because the customer does not need to remember codes.

Either way, the insurer's system must match each incoming payment to the right policy, update the premium schedule and issue a receipt. Doing this by hand from operator statements is slow and error-prone, which is why automated Mobile Money reconciliation matters.

Selling insurance through Mobile Money

Because a wallet identifies the customer by phone number and can collect small amounts, it is a natural channel for microinsurance and funeral cover. A customer can dial a short code, choose a product, confirm cover details and pay the first premium in one session. The policy is then serviced by SMS and USSD. See our guide to USSD insurance services in Zambia.

Paying claims and refunds

Mobile Money also works in the other direction. Paying a funeral claim to a beneficiary's wallet is often faster than a cheque or bank transfer, and the beneficiary does not need a bank account. Insurers need controls here: verifying the beneficiary's number, dual authorisation of payouts, and a record of each disbursement for audit.

Benefits for insurers and policyholders

For policyholders, the benefits are convenience, no travel to a branch, and an instant receipt. For insurers, the benefits are lower collection cost, fewer lapses because reminders can be followed by an immediate payment prompt, and a clean electronic trail for every premium.

What insurers should watch for

Operator transaction fees affect the economics of small premiums, so pricing should account for them. Reconciliation must be automatic and daily. Customer phone numbers change, so the system must handle a policy paid from a different number. Payment data is personal data under the Data Protection Act No. 3 of 2021 and must be stored and shared accordingly. For current fee schedules and wallet limits, check the operators' own websites.

How Ontech LifeI ERP handles this

Ontech LifeI ERP integrates with MTN Mobile Money, Airtel Money and Zamtel Kwacha to send payment prompts, receive payments, reconcile each one to a policy automatically and pay claims to wallets with maker-checker approval.