But the market might soon change as innovative products that run on micropayment or pay-per-use frameworks emerge under the support of institutions like the U.K.-funded Financial Sector Deepening (FSD) Africa.
FSD Africa is set to launch insurtech accelerator programs in Ghana and Nigeria next year to promote innovations that will drive the uptake of insurance in the two markets and beyond.
The planned launch of insurtech accelerator programs in the West African countries follows the introduction of the same in Kenya earlier this year, in partnership with Insurance Regulatory Authority, the country’s regulator, and cloud solution provider Tellistic Technology Services.
“At FSD Africa, we are committed to the growth of the insurance sector and are excited to be involved in grooming the next generation of insurance innovators. … The insurance industry has been slow to innovate compared to the rest of the financial sector, yet Africa is experiencing a huge protection gap,” FSD Africa’s director of risk, Kelvin Massingham, told TechCrunch.
“We are planning to launch the BimaLab Insurtech Accelerator Program in Ghana and Nigeria.”
FSD Africa is also planning to provide access to capital through venture funds and grants to early-stage insurtech startups, in addition to setting up an online platform where founders can brainstorm, share experiences, create partnerships, and gain technical support from different industry professionals.
The organization is working with eight insurance regulators including those of Ghana, Malawi, Nigeria, Rwanda and Tanzania to build an environment that bolsters insurtech innovation across the continent.
“It is really a peer learning and engagement platform for regulators primarily around regulating for innovation and things like creating insurtech and startup ecosystems, but also on wider issues like ESG (environmental, social and governance). And we’re excited to support the development of similar programs like this across the region,” Massingham said.
The new plans follow the graduation of the Kenya program’s second cohort last Friday. Over the 10-week program, participants were provided with knowledge and resources to develop and get their solutions ready for the market. Twelve startups were in the cohort, with Karopay and Motisure landing recognition for their innovations.
Motisure targets motorcycle (boda-boda) taxi commuters and riders with personal accident coverage for as low as 10 Kenyan shillings (about 9 U.S. cents) a day. Boda-bodas are a popular means of transport in East Africa, with 22 million rides served every day in Kenya alone.
Karopay’s edtech insurance product Bimashule ensures that students in rural Kenya have basic medical and personal accident insurance coverage, with premiums starting from less than $1 a month. It also comes with a school fee guarantee in the event of a guardian’s demise.