Insurance at large remains a marginal product in Kenya and Africa, with continent penetration levels half the world average as a percentage of GDP, and per capita premiums 11 times lower than the world average. report good by McKinsey & Company (and that includes the outside market of South Africa; take that out and Africa is even further behind). But economic growth and the rapid expansion of digital and mobile services have changed everything: The smallest market then looks like the biggest growth opportunity.
This is an opening mantra for new players. Safaricom, the Kenyan telco that runs the groundbreaking and market-leading M-Pesa mobile payments platform, is working on a new insurance product against property damage, theft and loss of life called Provisionally Insurance. Yet to be launched, when (and if) it does roll out, it will enter the market with a small but growing number of companies taking more innovative approaches with products that Addresses consumer needs as well as limitations. Area.
The broader picture for insurance startups has so far been a poor one in Kenya, whose country penetration is currently . is less than 3%. But it also leaves room for innovation.
Add to that the track record being established in the adjacent sector of financial services and you get an interesting example of how insurance technology can evolve. Fintech has shaped up as a hot area for investment and growth, with FlutterWave, Wave, Cuda and Thunes all making rounds in the past year on the heels of huge expectations for growth, in more developed areas. Competitors’ evaluations of their counterparts have raised the rounds in a big way. .
In its most recent report, McKinsey said the rise in demand for digital solutions, as access to smartphones and affordable internet deepens across the continent, has provided opportunities for insurance-tech to advance and offer innovative products.
“Competition among players has already led to significant innovation and disruption in the African insurance market, with insurers targeting specific sectors or services and leveraging technology to cut costs,” it said.
Innovative products launching across the continent appear to be more customer focused that allow micro-payments, flexible sign-ups and access to a wider range of services via mobile phones. Among them that are making it easier for customers to access and afford insurance services is Griffin Insurance of Kenya, which allows customers to access all services through its mobile app, pay for car coverage in installments and withholds coverage when they travel abroad. Insurance firm Lami Technologies, an affiliate of the company, raised $1.8 million in May this year to scale the API insurance platform across Africa.
Startups such as Insurance, also known as Safaricom’s products, offer other services such as telemedicine that complement their core insurance businesses. The mobile-first platform, which provides life and health insurance policies, as well as supports telemedicine, raised $30 million last year to build out micro-insurance and health services targeting emerging markets. The startup was founded in Europe but is primarily active in 7 countries in Asia and Africa in Ghana, Tanzania and Senegal. It targets people who make less than $10 a day, and aims to keep at least 75 percent of its customers as first-time policyholders.
South Africa-based Pineapple is another growing insurance-tech offering mobile-based services that reduce paperwork and office visits to sign-up or process claims while aligning itself with rapidly changing customer behavior. is needed. The firm, which recently expanded its range of services to include car insurance, now offers full insurance coverage to its clients—all underwritten by Old Mutual.
Insurance-tech opportunities in sectors such as agriculture are also developing with startups such as Oko, which operates in Mali and Uganda, providing automated insurance products based on satellite data and mobile payments. The startup, which raised $1.2 million earlier this year, puts farmers at risk from extreme weather events such as droughts and floods.
Even Safaricom has already started some early forays into the space, such as a home insurance products Covering items such as electronics and furniture that Kenyan Underwriters provides in partnership with Jubilee Insurance. service – which users can register and pay for via USSD (mobile technology used for a variety of data services in Africa, which bypasses the need for expensive mobile data plans by relying on more basic 2G networks is) – offers insurance cover that costs up to $13 per month and pays a maximum of $10,000. (It appears that Safaricom’s yet-to-be-launched insurance service may take a different and more direct approach to the way the product is offered in the market, which is why it would have required more regulatory and other approvals for the telco.) Is.)
Yet for insurance providers, and for those who want to delve deeper into that space, it’s not all that easy.
Safaricom — which is rolling out its 39.9 million mobile customers in Kenya as of March of this year and already has a completely sticky service as a payment service — will jump into that pool with a splash, though it’s unclear. Whether it will float at all at this point: The company’s insurance service entered a regulatory approval process in December 2020 and a spokesperson declined to give a timeline for a commercial launch.
Safaricom has launched a new insurance effort that outlines how the telco continues to look for ways to diversify from its traditional voice, data and messaging services.
It outlined the roll-out of new services in the latest continuing business report Published a fortnight ago. The company also recently launched a video on-demand service called Bayes that enables online content creators to monetize their content, and customers are able to access the content for a daily fee of up to $0.18. There are. The service rivals streaming services such as Netflix, Showmax, a South African service and Amazon Prime Video, which are out of reach for most smartphone owners due to cost.
Telecom said in the report that it is exploring new growth opportunities in agriculture, education, healthcare, next-generation financial services, sectoral expansion as well as micro and small medium enterprises (MSMEs).
“Going forward, we will strive to play a key role in making smallholder farmers wealthy and commercially sustainable, along with the inclusion of health care and education,,” said Peter Nedagwa, CEO of Safaricom, in a statement.
Safaricom already runs DigiFarm, a service where farmers access agricultural inputs at subsidized prices. DigiFarm also connects farmers to markets, provides loans for agricultural activities and learning materials. Safaricom says the platform has 14,000 active members.
In line with Telecom’s plans to increase its revenue streams and expand regionally, in May this year a Safaricom-led consortium was formally granted a license to operate in Ethiopia by the Ethiopian Communications Authority. The consortium comprising Vodafone Group and its members Vodacom, Japanese conglomerate Sumitomo Corporation and CDC Group will commercially launch its services in Ethiopia next year. It said Ethiopia will open a new market of 4 million SMEs and the population is estimated to be hit 130 million by 2030.
Safaricom is well known as the company behind M-Pesa, the mobile-money service that enables its customers to send and receive money, as well as pay utility bills using their phone numbers. So, it turns it into a sort of proxy for the bank. Account for millions of “bankless” residents of the area. The service recently surpassed Safaricom’s top-grossing voice for the year after the platform’s revenue reached $745 million for the fiscal year ending March.
M-Pesa customers also have access to Fuliza, an overdraft service, and can borrow short-term loans through third party services integrated into the M-Pesa app. M-Pesa could serve as an anchor for new services coming online from insurance to infinity: To market new products, Safaricom could tap its 28.3 million active mobile money customers in Kenya The service can be converted into a kind of service. “Super App”.