Insurance in Kenya and Africa at large remains a marginal product, with levels of penetration across the continent half the world average as a percentage of GDP, and premiums per capita 11-fold lower than the world average, according to a recent report by McKinsey and Co. (and that’s including the outsized 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 are set to change all that: the smallest market then looks like the biggest growth opportunity.
That spells an opening for new players. Safaricom, the Kenyan telco that runs the groundbreaking and market-dominant M-Pesa mobile payment platform, has been working on a new insurance product against property damage, theft, and loss of life provisionally called Bima. Yet to be launched, when (and if) it does roll out, it will enter the market alongside a small but growing number of companies entering the field taking more innovative approaches with products that address the needs as well as the limitations of consumers in the region.
The wider picture for insurance startups has so far been a patchy one in Kenya, with penetration in the country currently at less than 3% . But that also leaves room for innovation.
Add to that the track record being set in the adjacent field of financial services and you get an interesting precedent for how insurance tech might develop. Fintech has shaped up to be a hot area for investment and growth, with Flutterwave , Wave , Kuda and Thunes all raising massive rounds in the last year at valuations rivaling those of their counterparts in more developed regions, on the heels of great expectations for growth.
In its recent report, McKinsey said a rise in demand for digital solutions, as smartphone and affordable internets penetration deepens across the continent, has provided opportunities for the insure-techs to step in and offer innovative products.
“Competition among players has already led to significant innovation and disruption in the African insurance market, with insurers leveraging technology to target specific segments or services and cut costs,” it said.
Innovative products launching across the continent appear to be more customer centric allowing micro-payments, flexible sign-ups and access to a wide range of services through mobile phones. Among those that are making it easier for clients to access and afford insurance services is Kenya’s Griffin Insurance, which allows clients to access […]