Africa’s Insurtech Ecosystem Reaching Inflection Point
Africa InsurTech Rising is launching an international innovation program called The Bridge with support from InsureTech Connect. Its initial summer program showcases African startups seeking to transform the insurance industry on the continent.
Africa InsurTech Rising is Africa’s premier platform aggregating all stakeholders in the insurtech ecosystem with a specific focus on the African insurance space. We’re passionately reverse-engineering insurance inclusion on the continent via the advance of technology.
We’re doing this because, for a very long time, we’ve seen that traditionally it looks like Africa is usually the last to latch on. We like to describe Africa as reaching that inflection point, being in the 21st century now, particularly in terms of the advent of technology, mobile and internet services. We’re catching up with the rest of the world very, very fast. It’s an evolving space. We believe that the best is yet to come. We like to say our mission is also to deepen insurance penetration and inclusion by accelerating the resilience and the innovation of startups and all stakeholders. Our values rest on the acronym of RIDE, and that stands for resilience, innovation, divergence and excellence.
I’m not going to describe it as early days. We are in an advantaged position because of two major reasons: one, the population. We’re home to about 16% of the global population. Two, Africa’s gross written premium as of 2020 comes to about $68 billion. What that transmits to us is the fact that there are a lot of opportunities that have opened up, particularly because we are looking at that interconnectivity between insurance and finance.
Let’s get a little bit contextual. If we go to the background, we see that in places like Africa, Latin America and Southeast Asia you typically will find a majority of people don’t have access to financial services, which by default rules out services such as insurance. We’ve seen fintech take off very radically on the continent of Africa. If you look at the funding, it has been huge. If we look at the insurance technology space as a segment of fintech, by default it’s the new kid on the block. I wouldn’t say it is new. It’s building momentum, and it will be interesting to see what happens in the next two to five years.
First off if we look at the positioning of Africa as a continent and the evolution that is currently going on, the critical things that you will see created a very nice trampoline for insurtechs. Number one will be the narrowing of the skills gap in terms of engineering, coding and the use of technology. That has incessantly closed up very, very critically over the last five years to our advantage. About six years ago, it could be a nightmare to do something as simple as build a website. You needed to outsource to the likes of India, Israel or North America in certain places, and it was very expensive. Today, that is history. That has created a vibrant economy of people we describe as digital nomads. Now, we have software engineers, we have coders, we’ve got machine learning engineers, we’ve got AI experts, all plugged into different places in Africa.
The second thing we’ve seen is the increase in mobile penetration and internet penetration. As of today, we have over 470 technology-driven hubs scattered around the whole of Africa. The opportunities are as basic as the human capital, where all the engineering and all the software programming, machine learning, the cloud computing, et cetera, all the technologies are now being mined in-house. There are local, homegrown skill sets.
That is a vantage point in terms of building unique products and solutions that are bespoke to the African continent. They are no longer adaptations, but they are homegrown models that are solving those problems that even the founders of these companies have experienced living on the continent, working on the continent. That translates to being able to solve problems faster and have homegrown, tailor-made solutions to the pertinent problems that are being faced by the end users who live and work in Africa.
We are very deliberate about building the insurtech ecosystem by trying to pull together stakeholders and creating collaborative funnels. We are very deliberate about trying to see how we can accelerate in a very unique, non-composite way how startups and companies that are creating these innovative solutions are able to gather momentum and scale as quickly as possible.
The Bridge specifically resides on four pillars: No. 1 is mentorship; No. 2 is investment readiness; No. 3 is clarity; and No. 4 is visibility. We felt that, for the insurance technology ecosystem specifically, it will be a very great value add if we are able to transfer one of these pillars at the minimum and, at the maximum, all the pillars to the startups and founders who are doing phenomenal things that no one knows about on the continent.
We’ve received very massive support in our collaboration with InsureTech Connect…in the resources and the kind of quality of people and connections that we have gotten from merely launching the program.
That is what The Bridge is really about: it’s creating that two-way street where the companies locally are able show off the value that they have to the rest of the world and therein latch on to the opportunities that present themselves. In the same vein, the external communities and the external world are able to understand in real time what is going on in the continent and latch on to the opportunities that are available for their own business and the kind of relationships they can provide through these startups that we are accelerating.