BOOST

InsurTech startups benefit from IRA innovation hub

Harnessing technology is seen as one of the levers IRA is using to boost insurance penetration in Kenya.

In Summary
  • The startups were recognized for their ability to impact increased access to insurance in underserved markets.
  • Twenty startup firms participated in the first incubation program, and eight were shortlisted for an intensive six-week training and mentorship program.
Insurance Regulatory Authority (IRA) CEO Godfrey Kiptum and Prudential CEO, Gwen Kinisu are joined by Arthur Mulwa (of AiCare, one of the three local Insurtech startups that have each received Ksh 1.25 million in cash award from an innovation hub supported by IRA in conjunction with Prudential and other partners, to promote insurance inclusivity
Insurance Regulatory Authority (IRA) CEO Godfrey Kiptum and Prudential CEO, Gwen Kinisu are joined by Arthur Mulwa (of AiCare, one of the three local Insurtech startups that have each received Ksh 1.25 million in cash award from an innovation hub supported by IRA in conjunction with Prudential and other partners, to promote insurance inclusivity
Image: HANDOUT

The Insurance Regulatory Authority (IRA) is banking on the regulatory Sandbox “BimaBox” to support the growth of insurance and financial technology in the country, with aims of growing penetration.

Three local startups have each received Sh1.25 million in cash awards from an innovation hub steered by the IRA in collaboration with Prudential Life Assurance Kenya Limited (Prudential) and other partners, to promote insurance inclusivity.

The three startups have been recognised for their ability to impact increased access to insurance in underserved markets through the use of emerging technologies such as Artificial Intelligence, Blockchain and Telematics.

The IRA’s Innovation hub in partnership with Prudential, UK-Kenya Tech Hub, Tellistic and the UK Department for International Trade launched the Bima Lab Accelerator Program to help innovators refine their value proposition, determine commercial viability, and provide opportunities to scale their solutions through partnerships and participation in the IRA sandbox.

Winning participants would also receive a financial reward to support the growth of their solution.

Twenty startup firms participated in the first incubation program, and out of these, eight were shortlisted for an intensive six-week training and mentorship program.

Prudential Life Assurance Kenya CEO, Gwen Kinisu, said the company is keen on championing financial inclusion in the insurance sector hence its support for the accelerator program. 

“We provided the technical mentorship and guidance to help the participants refine their value propositions and accelerate commercial viability,"Kinisu said.

Kenya has generally experienced low levels of insurance penetration over the recent past at 2.34 per cent, according to the 2019 annual report by the regulator.

This is compared to other markets in the African continent such as South Africa (14.3 per cent) and Morocco (3.83 per cent).

IRA chief executive Godfrey Kiptum said the Bima Lab Accelerator Program will go a long way to promote financial inclusion and grow penetration.

“The objective of this program is to bring in innovators and also promote inclusivity of insurance, which is key to driving the financial inclusion agenda. Many people believe they are not insurable but with these innovative products we hope to insure more Kenyans," Kiptum said. 

 Harnessing technology is seen as one of the levers IRA is using to boost insurance penetration in the country.

Providing affordable insurance is one way of lifting low-income households out of poverty through microinsurance, IRA notes.

According to the International Labour Organization, microinsurance is not only an effective risk mitigation tool but also an essential component for social protection.

In the programme, AiCare, Chamasure and Sprout Insure demonstrated innovation, growth and scalability in their offering which qualified them to receive financial support from Prudential and the opportunity to participate in the IRA sandbox.

AiCare offers a tailored solution, combining telematics and AI that enables motor insurers to conduct accurate motor insurance risk assessments improving underwriting efficiency and reducing costs of insurance premiums. 

Chamasure has created a peer-to-peer microinsurance and savings platform that is easy to use for those who save through informal social groups for welfare support in case of death or accidents.

Such a platform is effective in mobilising savings among low-income earners to benefit from insurance products.  

Sprout Insure developed a faster claim processing solution for crop insurance making it easier for farmers to buy policies and receive timely payouts.

Expeditious claim payments enhance farmers’ ability to recover from adverse weather-related events like drought thus improving their financial resilience.