Home Business InsurTech startups benefit from IRA, Prudential innovation hub

InsurTech startups benefit from IRA, Prudential innovation hub

by Wanjiku Mbugua

Three local startups have each received Ksh 1.25 million in cash awards from an innovation hub steered by the Insurance Regulatory Authority (IRA) in collaboration with Prudential Life Assurance Kenya Limited (Prudential) and other partners, to promote insurance inclusivity.

The three startups were recognized for their ability to impact increased access to insurance in underserved markets through the use of emerging technologies such as Artificial Intelligence, Blockchain and Telematics.

The IRA’s Innovation hub in partnership 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. Winning participants would also receive a financial reward to support the growth of their solution.

Twenty startup firms participated in the first incubation program, and out of these, eight were shortlisted for an intensive six-week training and mentorship program. AiCare, Chamasure and Sprout Insure demonstrated innovation, growth and scalability in their offering and overall excellent participation throughout the program which qualified them to receive financial support from Prudential and the opportunity to participate in the IRA sandbox. The money awarded to the startups will be used to further refine their proposition and scale their solutions to enhance financial inclusion.

AiCare offers a tailored solution, combining telematics and AI that enables motor insurers to conduct accurate motor insurance risk assessments improving underwriting efficiency and reducing costs of insurance premiums. 

Chamasure has created a peer-to-peer microinsurance and savings platform that is easy to use for those who save through informal social groups for welfare support in case of death or accidents. Such a platform is effective in mobilizing savings among low-income earners to benefit from insurance products.  

Sprout Insure developed a faster claim processing solution for crop insurance making it easier for farmers to buy policies and receive timely payouts. Expeditious claim payments enhance farmers’ ability to recover from adverse weather-related events like drought thus improving their financial resilience.

Prudential Life Assurance Kenya CEO, Gwen Kinisu, said the company is keen on championing financial inclusion in the insurance sector hence its support for the accelerator program. 

“As Prudential, 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.” said Ms. Kinisu. 

She added that Prudential is keen on helping early and growth-stage insurance technology startups to help achieve financial inclusion. “With initiatives like the Bima Lab Accelerator Program, we hope to leapfrog technology to increase penetration to segments that are currently uninsured and underinsured.

On his part, IRA Chief Executive Officer, Godfrey Kiptum, said the Bima Lab Accelerator Program will go a long way to promote financial inclusion given the low uptake of insurance products in Kenya, currently at 2.34 percent of the population according to the 2019 annual report by the regulator.

“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.” said Mr. Kiptum. 

Harnessing technology is seen as one of the levers IRA is using to boost insurance penetration in Kenya. Providing affordable insurance is one way of lifting low-income households out of poverty through microinsurance. 

According to the International Labour Organization, microinsurance is not only an effective risk mitigation tool but also an essential component for social protection.

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