Kenya insurtech startups receive US$1.1mn from IRA
Three insurtech startups located in Kenya, East Africa have received KSH1.25mn (US$1.15mn) in cash awards from an innovation hub led by the Insurance Regulatory Authority (IRA) after being recognised for their ability to impact “increased access to insurance in underserved markets”. According to the IRA, this was achieved through the use of artificial intelligence (AI), Blockchain, and Telematics.
The IRA’s innovation hub, in collaboration 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. The financial reward would support the growth of the winning participants’ solution, the IRA said.
The Bima Lab Accelerator Programme
Around twenty startup organisations took part in the first programme, out of which eight were shortlisted for an intensive six-week training and mentorship programme. According to the IRA, AiCare, Chamasure, and Sprout Insurance demonstrated innovation, growth, and scalability in their offering and overall excellent participation throughout the programme, enabling them to receive financial support from Prudential and the opportunity to participate in the IRA sandbox.
The prize money plans to be used to further refine the companies’ proposition and scale of solutions to enhance financial inclusion, the IRA said. Prudential Life Assurance Kenya CEO, Gwen Kinisu, said the company is looking to increase financial inclusion in the insurance sector.
“We believe that our purpose is to help people make the most out of their lives. We provided the technical mentorship and guidance to help the participants refine their value propositions and accelerate commercial viability. We believe that such programs also provide us, Prudential, with the opportunity to learn and partner as we ourselves evolve into a digitally enabled insurer”, she said.
Chief Executive Officer of the IRA, Godfrey Kiptum, said: “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 Kenyans believe they are not insurable but with these innovative products, we hope to insure more Kenyans. We also want to encourage and motivate local innovators to come up with more solutions to meet the needs of low-income persons”.
CB Insights: US Insurtechs Are Competing In A Global Market
In the first half of the year, insurtech companies around the world have raised US$7.4bn, nearly doubling their funding in Q2. According to Digital Insurance, insurtechs have raised US$4.8bn in Q2—an 89% increase in funding from Q1. But US firms are no longer the sole beneficiaries.
What Are the Stats?
Out of the 15 Q2 mega-rounds—those that top US$100mn—only eight included American firms. Pretty good, you might say. That’s over half! But US companies only made up 38% of the deals, which marks a 10% drop from Q1 and a 12% drop from 2020. Technically, therefore, US insurtechs are less influential than they’ve been in the past. But who says this is a bad development?
Despite my American citizenship, I’d argue that a more globally diverse insurance market is only for the best. Many of the world’s citizens who could most benefit from improved insurance services live outside of the States—and deserve local, tech-savvy services.
Why Does This Matter?
You’re always going to see the typical insurtech contenders from Western countries. For instance:
- German-based wefox: US$650mn Series C
- UK-based Bought By Many: US$350mn Series D
- US-based Collective Health: US$280mn Series F
But it’s critical that we address risk across the world. American insurtechs might be some of the most technologically skilled firms in the industry, but it’s not their first goal to address floods in Southeast Asia, crop destruction in China, and COVID complications in South Africa. That’s why we should celebrate that the recent Q2 round included insurtechs from 35 different countries.
According to CB Insights’ Q2 2021 Quarterly InsurTech Briefing, this was the first time that they’d observed insurtech activity in Botswana, Mali, Romania, Saudi Arabia, and Turkey. And ‘from a product, service, distribution, and underlying risk perspective, we—as a society and as an industry—are moving at an unprecedented speed’, says Dr. Andrew Johnston, Global Head of Willis Re InsurTech.
Just ask CB Insights. InsurTech value propositions have resonated with the world.