Insurance penetration in Africa is currently below 3% largely attributable to the slow adoption of innovation in the sector. Many underwriters rely on traditional systems involving agents and lots of paperwork to sign-up new customers, which limits customer reach, and hampers the uptake of their products. However, a change-point is in the offing as insurtechs like the Kenya-based insurtech Turaco introduce new technologies and products that are disrupting the market.
Through its B2B2C model, Turaco has created an expansive distribution channel that is enabling it to tap into a large pool of potential customers in its markets, providing insurance to a group that has never consumed it before.
Driven by a viable business model, the startup, which also has operations in Uganda and Nigeria, has entered its growth phase and is eyeing more partnerships in a bid to drive mass market insurance adoption in Africa.
“We want to insure a billion people in the next 25 years and that’s what we’re building towards. It’s an audacious goal in every way and I can’t even really describe how to get there, but I have a clear vision of insuring 100 million people. Getting to that next stage of growth means working with some of the largest brands in the world. We have the right mix of talent, ambition, technology and vision to get us there. But it’s a long road ahead of us for sure,” Ted Pantone, Turaco co-founder and CEO, told TechCrunch.
Pantone co-founded Turaco with Peter Gross after their stint at MIC Global (Micro-Ensure), a tech-enabled embedded insurance provider.
“Insuring a billion people is what I want to do for the rest of my life, and this is both socially impactful, as well as commercially scalable,” he said.
Through API integration Turaco’s partners like PayGo companies (M-KOPA), ride-hailing platforms (SafeBoda), fintechs and micro-finance institutions are able to bundle insurance with their core products or services.
“We get typically north of a 50% conversion rate when we sell into these partnerships, because the value proposition really makes sense. And people are very aware of the risks like having medical emergencies and needing to clear that hospital bill. Demand is not the issue. People actually really want to buy insurance if it’s designed appropriately for them from a price point value proposition, and if it’s sold in a frictionless, efficient manner. So, most of our innovation is really around the distribution model. That’s really the key we are fixing to make it really easy for people to say yes, and then pay for insurance,” said Pantone.
The insurtech has so far reached over half a million customers, 268,000 of whom are active. Its users have grown 300% since 2020. Pantone attributed the growth to their business model and value proposition, which he says works for both partners and end users.
“As the insurance penetration in Sub-Saharan Africa remains below 3%, one of the lowest rates globally, we believe Turaco has developed the tools and know-how to fill this gap and reach low-income earners with products adapted to their needs, thus being a critical part of the push to help shield the most disadvantaged from unforeseen financial burdens and shocks,” AfricInvest and co-head of CAIF, Partner Yassine Oussaifi, said in a statement.