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Wednesday, July 24, 2024

Nigeria’s MyCover.ai to scale its open insurance coverage API platform with new funding


Africa’s insurance coverage market is anticipated to develop at a compound annual development price (CAGR) of seven% between 2022 and 2028, reaching $120 billion. Although seemingly spectacular, the insurance coverage business in Africa could possibly be price extra if insurance coverage penetration on the continent wasn’t extraordinarily low, lower than 3%, based on reviews. In consequence, conventional insurers have a finite market to promote their merchandise, which generally are subpar in comparison with world requirements.

Nonetheless, with a rising younger inhabitants, growing smartphone utilization, inexpensive web entry, and the proliferation of fintech apps, the insurtech market is taking form as startups launch options to varied buyer segments making an attempt to deepen penetration. One answer based mostly out of Nigeria, MyCover.ai, is asserting as we speak that it has raised $1.25 million in pre-seed funding led by Pan-African enterprise capital fund Ventures Platform with participation from follow-on buyers Founders Manufacturing facility Africa and Techstars.

The Nigerian insurtech startup, which participated within the Techstars Toronto program final 12 months, mentioned it’s going to use the funding to bolster its in-house operations and tech expertise, make investments closely in its proprietary expertise and strategically increase its operations into different African markets.

“We wish to have a big share in a market with lower than 1% insurance coverage penetration. Whereas doing that, we wish to increase to different African markets and go to different rising markets, and finally the remainder of the world as a result of we predict our answer is relevant globally,” co-founder and CEO Adebowale Banjo instructed TechCrunch on a name.

Banjo based MyCover.ai, which offers an open insurance coverage API that permits companies to embed insurance coverage into their current services and products, with CPO Alexander Igwe-Ifendu and CTO Fred Ebho in 2021. MyCover.ai intends to deal with a number of ache factors in Africa’s insurance coverage market. For one, insurance coverage suppliers work in silos. In consequence, there’s an absence of visibility into what they need to optimize for customers, resulting in an absence of entry on the shoppers’ half — and for many who have entry, they pay premiums. In abstract, the primary challenges of the market embody an absence of entry, insufficient protection, the unaffordability of insurance coverage merchandise and the poor buyer expertise surrounding insurance coverage processes.

“There’s an issue with entry and distribution as a complete, particularly with the sort of merchandise insurance coverage firms had been churning out and what folks wanted and will afford,” Banjo mentioned, explaining why MyCover.ai was constructed. “We additionally came upon that handshake between insurance coverage firms shouldn’t be there, the visibility and the information required to enhance on merchandise and underwriting progressively was missing.”

Initially, the founders constructed a comparability website, pitting insurance coverage suppliers in opposition to one another. However after additional market analysis, they pivoted to an infrastructural play working throughout three important contact factors: underwriting and product improvement, distribution, and insurance coverage claims. They believed this could shortly energy the adoption and development of insurance coverage in Nigeria.

MyCover.ai

Picture Credit: MyCover.ai

MyCover.ai offers an open insurance coverage API that integrates with insurance coverage firms, together with Hygeia, Leadway, Sovereign Belief, AIICO Insurance coverage and Allianz. The startup streamlines claims processes for these firms and finish customers, together with fintechs, proptechs, e-commerce firms, telcos, logistics and mobility/ride-hailing, and BNPL platforms, which may select from over 30 personalised insurance coverage merchandise to embed into their platforms. For example, a third-party logistics platform can supply on-demand items in transit protection for items moved on its fleet and supply riders with medical insurance and private accident protection.

“We would like our rails to make insurance coverage mainstream, enhance entry and supply nice merchandise whereas utilizing AI to energy our claims administration answer,” commented Banjo, referring to how MyCover.ai differs from different API-driven insurtechs, together with Kenya’s Lami Applied sciences and Nigeria’s Curacel. “Additionally, on the finish of the day, every part boils all the way down to the expertise folks get. What we perceive or see available in the market is that individuals will likely be extra aligned to personalised merchandise than simply getting any insurance coverage product available in the market. So what we are attempting to do is to enhance prospects’ insurance coverage expertise and assist launch personalised merchandise based mostly on life and particular nuances,” Igwe-Ifendu added on the decision.

Solely 0.5% of Nigeria’s inhabitants is roofed, based on the Nationwide Insurance coverage Fee (NAICOM). Because of this most individuals within the nation have by no means obtained insurance coverage protection and should depend on private funds to save lots of themselves in case of emergency. People are left defenseless and attempting to get better from destructive circumstances, regularly plunging them into extra poverty. That is why along with its API merchandise, MyCover.ai has a B2B platform, MyCoverGenius, that provides entrepreneurs and small and micro companies the avenue to buy insurance coverage merchandise from the startup, thus overlaying their workers (i.e., entry to antenatal care, eye and dental companies) and property, beginning with $2 (~₦‎1,500) month-to-month.

MyCover.ai claims to have recorded over $1 million in gross written premiums from partnerships with 30 insurance coverage suppliers nationwide since its launch. Banjo, who earlier than launching MyCover.ai was the pinnacle of enterprise improvement at MallforAfrica, additionally disclosed that the insurtech platform, which is in numerous levels of dialogue with about 50 different suppliers in its pipeline, has processed over 50,000 insurance policies whereas serving 30,000+ finish customers. The CEO added that the two-year-old insurtech doubled its income in 2022 from the earlier 12 months and intends to duplicate the identical development by the tip of this 12 months.

Commenting on the funding, Dotun Olowoporoku, basic companion at Ventures Platform, mentioned, “Adebowale and his group are reshaping the insurance coverage panorama in Nigeria and have their eyes set on the broader African market by constructing the much-needed insurance coverage infrastructure on the continent. Not like different insurtech options that concentrate on particular areas of insurance coverage penetration among the many underserved, MyCover.ai takes a collaborative strategy and provides a collection of companies that cowl all the spectrum of those challenges.”

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