For years, insurance penetration in Kenya has remained low at between 2.3 per cent and 2.6 per cent as of mid-2023, which is significantly below the global average of approximately seven per cent.
The penetration in East Africa also remains low hovering around one per cent to three per cent countries like Tanzania and Uganda, with the low penetration is driven by factors such as low disposable incomes, a limited understanding of insurance products, poor savings culture and the slow growth of alternative distribution channels such as mobile phones.
Despite these challenges, East Africa presents a significant long-term opportunity for insurers owing to the its rapis economic growth and young, growing demographic.
Global firm–Mastercard, which powers economies and empowers people in more than 200 countries and territories worldwide has since dived into the insurance space, in a strategic collaboration with Insurtech company Hillcroft (mTek), with a target of covering SMEs across East Africa.
The collaboration will integrate tailored insurance products directly into Mastercard’s consumer and SME card offerings, aimed at enabling millions of people and businesses to access affordable and convenient coverage through the payments ecosystem they already use every day.
This initiative marks Mastercard’s entry into the embedded insurance space in East Africa, reinforcing its commitment to advancing financial inclusion and digital innovation in the region.
By embedding insurance coverage into routine transactions, the collaboration aims to eliminate traditional barriers such as high upfront costs, complex application processes, and limited distribution networks—factors that have historically kept insurance penetration in the region at below three per cent.
“This collaboration reflects Mastercard’s commitment to unlocking financial inclusion. By bringing insurance directly into the payment experience, we are removing friction and making protective cover accessible to millions of people and businesses. From consumers buying daily goods to farmers selling their harvest, this initiative is about building resilience and supporting economic growth across East Africa,” Mastercard senior vice president and country manager for East Africa and Indian Ocean Islands, Shehryar Ali, said.
SMEs account for more than 90 per cent of businesses in East Africa and play a significant role in GDP and job creation, yet they face persistent challenges in accessing affordable insurance.
By offering coverage at the point of transaction, Mastercard and Hillcroft (mTek) are keen to meet businesses where they are, leveraging Mastercard’s payment infrastructure and Hillcroft’s Insurtech expertise to close this gap.
Hillcroft (mTek) CEO Bente Krogmann said: “At Hillcroft (mTek), our mission has always been to reimagine access to insurance in Africa. Collaborating with Mastercard allows us to scale our technology and connect with millions of consumers and SMEs through trusted payment channels. Together, we aim to deliver solutions that are simple, affordable and life-changing for underserved communities.”
The collaboration also creates a wider ecosystem by bringing together financial institutions, insurance companies and major telecommunications providers across Africa.
Together, these stakeholders will deliver comprehensive digital and virtual card solutions that bundle payments with insurance, expanding access across the region.
Hillcroft (mTek) will provide direct API integration with underwriters, technical platform support and co-develop innovative products with insurers. This approach not only scales the reach of insurance but also builds commercially viable models that ensure lasting impact.
For consumers, this collaboration means access to affordable insurance products embedded into their everyday payment habits.
For SMEs and farmers, it offers vital protection to help manage risk and support growth. For financial institutions, telecom partners and insurers, it creates new opportunities to deepen engagement, strengthen customer loyalty, and expand reach.
With Africa’s insurance penetration among the lowest globally, the new venture sets a new benchmark for how financial services can integrate protection into daily life, according to industry players, establishing a scalable blueprint for expanding insurance access across East Africa and beyond.
