7 African companies using tech to innovate insurance for the masses

While fewer Africans have insurance policies than people in other regions, a new breed of start-ups and innovative enterprises is deploying a range of technologies — including AI, API gateways and a variety of mobile platforms — to lower the cost of insurance services and bring them to markets that have historically been underserved by traditional insurance companies.

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Lack of insurance can be devastating to anyone facing an emergency, particularly a health crisis. While fewer Africans have insurance policies than people in other regions, a new breed of start-ups is deploying a range of technologies — including AI, API gateways and a variety of mobile platforms — to lower the cost of insurance services and bring them to markets that have historically been underserved by traditional insurance companies.

Africa's insurance industry is valued at about US$68 billion in terms of gross written premium (GWP) and is the eighth largest in the world, according to research by McKinsey. While the numbers may sound large, insurance is not equally available across the continent, policies are often too expensive for low-income consumers, and traditional methods of signing up customers require bank credentials that many people, especially in rural areas, do not have.

As a result, Africa is lagging behind the global average insurance penetration of 6%, according to a report by Strathmore University in Nairobi, Kenya. Insurance penetration is the ratio of the total value of premium compared to gross domestic product (GDP). Kenya's insurance penetration is 2.4%, Uganda's is less than 1% and Tanzania's insurance penetration rate is among the lowest in Africa, at 0.5%, according to the most recent figures cited in the Strathmore report.

Over the last two decades, out-of-pocket health payments as a portion of all health expenditures in sub-Saharan Africa rose from 40% in 2000 to over 60%, according to a UN analysis. "The effect of out-of-pocket payments can be catastrophic to families; it drags them into a poverty trap," the report said.

AI, APIs, mobile apps transform insurance

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