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Tapping into a billion shilling insurance industry

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Despite the insurance industry earning Kenya revenue worth Kshs1.1billion in 2018, according to the 2019 Economic survey by Kenya National Bureau of Statistics (KNBS), the sector continues to have its share of downsides.

Fraud, for instance, continues to be experienced especially when it comes to pursuing insurance claims by policyholders and there exists low understanding among the general population, leading to opaqueness.

But while insurance acts as a risk-management tool that covers lives and property of people, there’s still low uptake of services, standing at three percent as of 2018, in both the areas of Life and Non-Life business, according to data from Sigma report, released by the Association of Kenya Insurers (AKI).

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This could be from the general perception that insurance covers are only accessible to those who are employed in the formal sector as their premiums are from providers, who are big corporates.

Another demerit could be traced to the proposed amendment made on February 28th this year to the Insurance Act, which seeks to protect insurance holders by allowing them to pay their premiums covers directly to insurance companies, instead of leaving it to brokers and agents to do it for them, as has been the norm.

The Bill is still pending Presidential Assent.

Eunice Maina, a Nairobi-based entrepreneur, is working to address some of the dominant challenges. She founded Bismart, an insure-tech (insurance technology) platform in July 2017 because of the gaps she had seen while working for the insurance industry.

“Corporates are very complex organisations, something that denies them the opportunity to innovate because of structures. Most insurance companies are also not integrated so that is another reason,” Maina, a Bachelor’s degree holder in Chemistry and Mathematics, says during the interview.

It’s from this backdrop that she came up with Bismart, a digital platform that aggregates all insurance companies so as to give a potential customer who was left out by the large corporates the ability to choose from a wide array of companies.

And, this has come in handy

According to the yearly report published two years ago by AKI, the growing youth population is changing the insurance industry, which has pushed them to go for digital distribution channels such as websites and social media.

Bismart, Maina says, targets a market demographic of millennials.

To come up with the tech startup, Maina started off at Strathmore Business School, where she was based at the school’s incubator, iBiz, during the whole of 2018.

The incubator enabled her learn how to run a scalable business; how to start lean, how to run your business and how to scale it, she says.

The business now targets people in the informal sector, allowing them to track the progress of their claims.

According to Maina, Bismart takes into consideration the social status of customers, as some are unable to afford annual premiums. This is why she introduced a system that allows them to pay for a cover on a flexi mode, either on a daily, weekly or monthly basis. They have tapped into an existing demographic of young people who are mainly early adopters.

“Bismart goes beyond seeking to democratize information. It lets people know what they are being covered or not covered from, with regard to price and benefits. That is, exclusion. It also enables people to track their claims, which is just as important,” she says.

As an end to end platform, the entrepreneur says, the business helps in reducing the cost of underwriting as well as in cost management. This is in addition to charging a percentage of the price from the revenue share to the insurance company.

“By also using digital channels, Bismart is able to reduce the need of other distribution channels,” Maina adds.

Experience in insurance industry

Maina garnered most of her professional experience in insurance while having worked at Britiam between 2017 and 2009 in various positions, mostly in the sales department. From being a Sales Agent, she rose to the position of Unit Manager in charge of Life Insurance, then to that of Country’s Sales and Relationship Manager in Charge of Micro-Finance.

During the short stint, she was able to know the ins and outs of the industry, including the gaps.

Surprisingly, though, her degree was not in insurance. She holds a Bachelor of Science degree in Chemistry and Mathematics from the University of Nairobi. So why did she not stick her professional field?

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“By the time I finished university in 2003 and even when I graduated a year later, I knew that I would not practice Chemistry because of the danger that chemicals pose. I also discovered that my personality was more people-oriented.”

She, however, took brief stints in few pharmaceutical companies, working at Lab and Allied as well as Sphinx Pharmaceuticals. She then plunged into another field.

“The Institute of Advanced Technology (IAT) was hiring graduates and training them Information Technology. We used to study and then work. Within that time, I had reached a ceiling professionally, having advanced from a trainer to a senior trainer,” says the holder of an Advanced Diploma in Computer Studies.

She worked for IAT for five years beginning 2004, rising to the capacity of Senior Trainer. She then resigned in 2009 to look for greener pastures, partially afraid that her son’s insurance policy would be terminated due to the move.

“IAT was on the ground floor and Britam on the first floor. I went upstairs to find out what could be done about my son’s policy, whether it would be terminated or if I’d get a refund, but the then manager asked whether I would consider to be a sales agent. And I thought this would be very tedious,” she says.

While she did not think much of insurance policies, when she went back home, curiosity got the better part of her. Come February 2009, the previous conversation with the then Britam manager turned to be a window of opportunity, taking up the position of a Sales Agent at Britam.

Unfortunately, the new career did not pick up immediately.

“I did not sell a single policy. But I decided to learn more about the industry. And I realised that people do not buy insurance because it is opaque, but that there’s lack of trust in it or about the distribution channels.”

Maina would months later quit the job and join the College of Insurance to equip herself more with formal industry skills. She then started teaching people about how insurance fits into their Personal Financial Planning, being a risk management tool. This approach made customers and her former university mates to shun her.

Luckily, things started looking up

In 2014, the Association of Kenya Insurers (AKI) recognised her as one of the Top 20 agents in the country, through its programme that seeks to recognise agents who have sold over 70 individual life insurance policies in a year.

She then applied and got a job at Britam as the company’s Country Sales and Relationship Manager dealing with Micro-Insurance- in 2015.

“I was involved in product-design, development and distribution of micro-finance. In distribution, I was involved in looking for the best channels for the low-income earners, such as agents and brokers, micro-finance institutions, schools,” she says.

In July 2017, Maina started Bismart, a company that currently has 10 employees. The business’ partners and clients include insurance companies such as Madison Insurance, APA Insurance, Kenya Orient and Green Tec.

“One of the key milestones covered by Bismart is when we won the Women in Technology Award given by Strathmore University. The award came with a $ 10,000 grant from StanChart Bank,” she says.

So far, 13 insurance companies have signed up to the Bismart platform, and the focus has grown to mobile phone insurance. About 4,000 users are using the platform. And it uses block-chain technology to secure data of its customers.

“The technology keeps documents secure, such as those from customers as well as those seeking claims, as this with a distributed ledger they cannot be changed.”

The startup is in the process of testing its ‘Bima Ya Mkonono’. And there are plans to launch a branch in other East African countries, especially Uganda.

Maina admits that even with the gaps that she has been able to fill, there have been certain challenges.

“Getting people with the right skills to work is difficult. Like now we need very experienced developers to work with but they are too expensive for a startup, while those who are available lack the technological skills to work with. Sometimes we are forced to outsource for skilled labour.”

Other than Bismart, the CEO has had forays in entrepreneurship before. While at IAT, they started a Cyber Café in Nyali with two female friends to offer web design training. But the post-election violence in 2007 shattered their dreams, as the business received very few customers, their inability to cope with high municipality rates and rent arrears. They had to donate the computers to a school in Mombasa.

Having gained quality experience in the industry, Maina advises that entrepreneurs should understand their customers, know the problem that they would want to solve and design a solution for it.

“Start small rather than in a big office. Validate your business model before you invest heavily in the product,” she concludes.

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