Insurers embrace innovation to survive technological disruptions

Ms Winnie Badiah, chief executive of GrassRoots Bima, one of the new insurance technology firms. PHOTO | Martin Mukangu | NMG 

By JAMES NGUNJIRI

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Summary

• Insurers are forging partnerships with tech firms and mobile service providers to be as competitive as possible to meet the consumers’ ever changing needs and preferences.
• Experts say adoption of technology will enable insurers in Kenya to robustly connect with customers.

The insurance industry is undergoing a paradigm shift as emerging technologies redefine how a range of services are delivered.

To ride out the storm of technological disruption, insurers are coming up with innovative products.

Many companies are also forging partnerships with tech firms and mobile service providers to be as competitive as possible to meet the consumers’ ever changing needs and preferences.

“Partnerships and collaborations are critical for success. Financial institutions are becoming more open to third-party innovations so as to create better value for customers,” said Dorel Blitz, head of Fintech at KPMG Israel, on Wednesday during the unveiling of the 2017 KPMG Fintech survey report in Nairobi.

Experts say adoption of technology will enable insurers in Kenya to robustly connect with customers. They add that rapid penetration of mobile technology in Kenya, a development which has pushed financial inclusion from 26 per cent in 2016 to 75 per cent currently, offers insurers huge and diverse opportunities for growth.

“The Kenyan insurance sector is ranked fourth in Africa. We want to scale up the ladder by doubling our insurance premiums, which will largely be attributable to premium growth from the micro insurance segment,” said Insurance Regulatory Authority (IRA) acting chief executive Godfrey Kiptum.

Thanks to innovation and competition, a host of micro insurance policies are now on offer. These include personal life, funeral cover, last expense, pension plans, credit life and saving plans.

The general micro insurance policies also offer protection against a wide range of risks, including health and medical bills, crop destruction, agricultural inputs, burglary and property destruction.

Many start-ups are now targeting insurance technology. GrassRoots Bima is one such firm. Its chief executive, Winnie Badiah, says technology provides not just an opportunity to increase profitability for underwriters, but a real chance for insurers to build and retain trustworthy relationships with customers.

“Underwriters are aware of the disruptions and changes facing the industry, the transformational impact of which is evident,” said Ms Badiah.
GrassRoots Bima has quickly become one of the fast rising insurance technology (insurtech) companies nationally. It is ranked by KPMG among the top 100 financial technology (fintech) firms in the world, at position 76.

READ: Kenya’s GrassRoots Bima 76th in global fintech ranking

Through its platform — WazInsure — the start-up is allowing individuals to track their insurance policies in a single place so as “to increase simplicity, transparency and cost effectiveness” of insurance. Another notable platform is M-Tiba, a mobile phone health wallet developed by Dutch firm CarePay Ltd in partnership with Safaricom and PharmAccess Foundation.

Also, the National Hospital Insurance Fund (NHIF), in partnership with M-Tiba, has been offering over 2,000 families in Nairobi slums access to the fund’s SupaCover programme.

Data from the Association of Kenya Insurers (AKI) shows that insurance penetration in the country stands at 2.75 per cent (2016), compared with 2.78 per cent in 2015. This is far below the world average of about 6 per cent.