Even as mobile penetration continue to grow, the East Africa region is still sluggish in technology innovations especially in the insurance sector. The region is considered as Africa’s Silicon Savannah with a high mobile penetration, home grown digital financial innovations like M-PESA that is now being exported in other countries and a fast growing tech start –up ecosystem.
Statistics indicate that about $63.6 billion is transacted in aggregate in a single year on mobile money platforms in the East African Community (EAC) countries. This corresponds to 46 percent of the total GDP of the EAC in the most recent statistics.
Mobile is a key factor in the region’s start-up ecosystem where many tech start-ups now use the technology as the primary platform to create solutions that address various socioeconomic challenges.
According to the GSM Association, a trade body that represents the interests of mobile network operators globally, over half of all mobile money services in the world are in Sub-Saharan Africa, which remains the fastest-growing mobile market in the world. In addition, the region is expected to have 500-million cell phone subscribers by 2020.
Despite these successes, the InsurTech innovations still lags behind.
If we are talking of such high numbers in mobile phone penetration, it is high time insurance companies develop of taking advantage of these untapped sector to increase insurance uptake, grow their premiums while in the meantime allowing a majority of customers to enjoy diversified insurance services.
At the moment, insurance firms are yet to go mobile, with only few companies having mobile driven products but still mainly sourced through agents, brokers, or directly by insurance companies.
Mobile technology has the potential to positively impact the insurance industry by attracting new customers and retaining former policy holders.
Insurance companies have a huge task ahead of them of introducing real innovation in the sector through collaborations with tech start-ups that have solutions for the sector.
We are in an era where consumers are demanding to transact with ease and eradicating all the tedious process of transactions.
Digital innovation is not going anywhere and is in fact, set to dominate.
More InsurTech companies are set to emerge in the region and challenge the dominance of the traditional ways of taking up premiums.
Kenyan insurance is only 2.83 per cent leading her East African counterpart Uganda and Tanzania which stands at 0.77 per cent and 0.68 per cent respectively.
The Writer is the Founder, Market Minds, UK.