FUNDING

Insurance firms to benefit from Sh60million innovation grant

The funding will unlock and accelerate Africa's insurance sector.

In Summary

•The grant will be channeled through FSD Africa's BimaLab accelerator programme to boost innovation in the sector.

•The program provides resources needed by talented insurtech founders of early to mid-stage start-ups to leverage insurance technology and promote insurance penetration.

Swiss Re Foundation has announced a $500,000 (Sh61.3 million) grant for Africa's insurance sector to spur innovation of insurance solutions for the underserved population.

The funding, to be distributed through the FSD Africa's supported BimaLab insurance accelerator programme, will unlock and accelerate the transformation of Africa's insurance sector through innovative offerings for the sector's unique landscape.

The grant will be channeled through FSD Africa's BimaLab accelerator programme to boost innovation in the sector.

 "The support of the Swiss Re Foundation is a significant step towards building an innovative and climate-focused insurance industry that will accommodate the evolving needs of the uninsured," said Elias Omondi, senior manager of risk regulations at FSD Africa.

Recently, there has been increased attention to Africa's expanding and promising insurance sector.

Despite its massive potential, research by Brookings Institute indicates that Africa's insurance sector has a low penetration of 2.78 per cent, compared to the global average insurance penetration rate of 7.23 per cent.

Low awareness and low employment levels in the formal sectors, coupled with a lack of trust and experience with traditional insurance institutions, have been attributed to low penetration rates.

To harness the opportunities presented by the insurance sector, FSD Africa, with its partners, launched the BimaLab accelerator programme in 2020.

The programme provides resources needed by talented insurtech founders of early to mid-stage start-ups to leverage insurance technology and promote insurance penetration in the continent. 

"Through programmes such as BimaLab, the most vulnerable and low-income people will gain from innovative, affordable, and efficient insurance products and services," Stefan Huber Fux, director of the Swiss Re Foundation said. 

The BimaLab program now in Kenya, Ghana and Nigeria has enabled 40 insurtechs to gain visibility and push for resources to scale their innovations.

So far, 43 unique products and services have reached over 600,000 customers since the program started in 2020.  

Plans to launch the BimaLab Accelerator Programme in Ethiopia, Uganda, Rwanda, Zimbabwe, Malawi, Egypt, and Morocco are underway. 

The support of the Swiss Re Foundation will further facilitate the growth of high-impact insurtechs through introducing and scaling innovative products and services to the underserved African market.

At the COP27 Summit, over 85 African insurers pledged to create a financing facility to provide $14 billion to support communities impacted by climate change.

The cover will help the continent's most vulnerable communities deal with climate disaster risks such as floods and droughts, cementing the insurance industry's position in driving the continent's economic expansion.  

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