Low insurance penetration in Africa: Tech to the rescue?

by | Apr 26, 2021

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Good day,

Múyìwá here.

Last week, TechCabal reported Malian insuretech startup, OKO’s $1.2m seed round. With a presence in Mali and Uganda, OKO now looks to expand to other African countries, starting with Côte d’Ivoire.

It is not every month you hear of a Francophone-Africa-based startup raising 7 figures at the seed level, let alone any African insuretech startup. So OKO must be doing something right. Per TechCabal:

“OKO uses satellite information to define the risk and create insurance products for farmers in emerging markets. These products are then distributed using mobile technologies. These also enable the collection of premiums and payment of claims. 
…The company already has approximately 7,000 paying customers in Mali and compensated more than 1,000 farmers last year, who were affected by floods/”

It is worthy of note that OKO has expatriate co-founders, Simon Schwall and Shehzad Lokhandwall, who hail from France and India respectively. This feels like a good time to mention that all West African startups that raised over $100m cumulatively, between 2010 and 2019, have at least one foreign co-founder. You can learn more from the West African Startup Decade Report

The big picture: Insurance penetration across Africa is extremely low. While there are standouts like South Africa (over 17%), most countries struggle to experience beyond 4% penetration.

There are a number of reasons for these low numbers, ranging from poor awareness, regulation and religious conviction. However, over the past 3 years, we’ve begun to see an influx of tech startups braving the storm, in a bid to activate an industry estimated to be worth $68 billion. Just barely a month ago, Curacel, another insuretech startup, announced raising $400k to expand across Africa.

Dive deeper: How technology can play a crucial role in capturing the untapped insurance market.

What else happened last week?

  • Africa-focused VC firm Atlantica Ventures raising $50m fund for seed-onwards tech investments.
  • Top funding rounds in the African tech space [Infographic].
  • Fintech startup, Okra, raises $3.5m seed to deepen operations in the Nigerian market.
  • Bolt expands to Umuahia and Abakaliki, now in 24 Nigerian states.
  • Social media platforms become triage centres as India struggles with a COVID-19 surge. Read.
  • Segun Agbaje: GTBank CEO gets ready to take a bow.
  • Audiomack partners MTN Nigeria to bring music to over 76 million subscribers at zero data cost.

Have a great week!

Múyìwá Mátùlúkò for Techpoint Africa.

Techpoint Africa
Techpoint Africa

Techpoint Africa is a digital media company that amplifies the best innovations out of Africa through its mediadata, and events.

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