Tom Kamau is a bodaboda rider stationed at Seasons, a mushrooming lower-middle class dwelling along Kasarani-Mwiki Road, Roysambu Constituency, a few kilometres West of Nairobi’s Central Business District. Until recently, when the Kenyan government issued a directive requiring all motorbike taxis to be insured, he did not have an insurance cover.
Still, he says, the process he endured to secure himself with a Personal Accident cover was long, tedious and cumbersome. His application took four days. This is a massive dent to his Ksh1,000 daily net income that goes to his rent, pay school fees and savings at the end of the month.
“Our nature of work does not allow us to waste any time. Each minute counts, because at any given time, someone is constantly seeking our services,” says Mr Kamau.
In respect to this, insurance companies will benefit greatly by partnering with insurtech firms to customize solutions that will cater for unique insurance needs of different market segments.
This is because insurance technology firms have amassed a massive array of data that addresses specific needs that would be left uninsured by traditional underwriters.
At WazInsure, we have unique resources at our disposal to provide innovative, disruptive solutions that will enable proliferation of financial inclusivity to every individual, regardless of their disposition.
The era of strict competition between fintech startups and incumbent insurers is abating. More companies are cognizant of the advantages of insurance-insurtech partnerships, from a more extensive customer base and increased access to funds, to faster and cheaper technology.
Kenya’s insurance penetration has dropped to 2.43% to the country’s GDP – the lowest in 15 years. There are more than 90% of the population currently living their lives without the stability and opportunity that basic insurance cover can bring. Leaving these people unserved isn’t just a humanitarian problem; it’s a business problem.
For example, by integrating our data-driven platforms, insurers are able to profile their customers’ risks more accurately, making better underwriting and claims decisions. A customer would wish to know if they can receive an insurance cover through their mobile phones, or online, seamlessly and with less bureaucratic restrictions.
They would also want timely processing of claims.
Insurance is fundamentally a social good, but has remained mistrusted for quite a long time. Adoption of technology is one way of lessening the suspicion. Through insurtech, there is an opportunity to make this crucial, yet sometimes opaque industry, more human.
“Many insurtech start-ups are focused on working with the industry to make it more efficient, often by focusing on the claims process, providing telematics solutions, or adding AI and data analytics,” says Susan Holliday, Principal Insurance Specialist, Insurance and Financial Guarantees, Financial Institutions Group, IFC, in a note published at EM Compass.
Relationships between insurance providers and insurtech start-ups are developing in a number of different ways, and it is becoming clear that no insurer or broker can afford to ignore insurtech, she adds.
Partnerships between insurance companies and insurtech & fintech firms, while not without cultural and operational challenges, generally improve customer service and make the production process cheaper and more efficient, say Ms Holliday.