Bridging the insurance gap within the MSME sector in EAC region key to driving growth

FILE: A Turaco field agent making a sale to a SafeBoda rider in Kenya

NAIROBI, Kenya - The insurance industry plays a significant role in the growth and development of the financial services sector in Kenya.

It is identified in Vision 2030 as critical in the transformation of Kenya under the economic pillar.

Over time, the industry has continued to be characterized by low penetration levels at about 3% due to a multiplicity of factors such as access to insurance, willingness, and ability to pay for insurance, existing distribution channels, adverse selection, and information asymmetry among others.

Given that access to insurance is an important element of economic development, low levels of insurance penetration among the general populace remain a key challenge.

In an exclusive interview with Garowe Online, Hamza Mutebi, General Manager of Turaco Uganda, For many Africans, hospitalization frequently leads to a loss of daily income, incurring debt, and, in extreme cases, plunging a whole family into poverty. Nevertheless, insurance can protect against this.

Turaco, an insurtech start-up in emerging markets, has strategically partnered with Airtel Mobile Commerce Uganda Limited and Prudential Assurance Uganda to launch Hospital Sente.

Hospital Sente is a low-cost hospital cash insurance product with funeral benefits to increase access to insurance for underserved communities and low-income individuals and families. Through the partnership, Turaco’s insurance solutions will be able to reach 8 million Uganda Airtel Money customers.

“Turaco embeds its service as a white-labeled offering that is bundled with a partner’s core product or service while integrating with their existing payment processes to collect premiums. Forming partnerships with top tech-enabled companies provides a large pool of customers or staff with brands such as M-KOPA, One Acre Fund, Safeboda, and Vision Fund. Turaco designs and delivers a suite of bespoke packages, including medical, life and asset, and vehicle insurance.” Explained Mutebi.

Turaco provides fast, simple, and inclusive insurance solutions for emerging markets and is a distributor, broker, and key customer interface between the underwriter and the consumer. Turaco achieves this by forming partnerships with leading tech-enabled companies with a large pool of emerging market consumers

The B2B and B2B2C business model has led to over 250,000 active lives covered monthly across Kenya, Nigeria, and Uganda. To date, Turaco has paid ~$1,000,000 for ~9,000 claims and typically sees a 30-60% sales conversion rate of customers.

Hospital Sente is a low-cost hospital cash insurance product with funeral benefits to increase access to insurance for underserved communities and low-income individuals and families.

Through the partnership, Turaco’s insurance solutions will be able to reach 8 million Uganda Airtel Money customers.

Mutabi notes Affordability and lack of awareness as leading obstacles to insurance uptake among the micro cadre of business across East Africa.
He advocates for the insurtech model to tap this unexploited market.

GAROWE ONLINE