Kenyan insurtech, Lami Technologies, has raised $1.8 million seed to provide custom-made and affordable insurance products to the average African consumer.
Accion Venture Lab, a seed-stage investment firm that endorses financial services targeted at underserved markets, led the round with participation from other angel investors: AAIC, Acuity Ventures, Future Africa, Consonance, and P1 Ventures.
In Africa, there is low insurance coverage due to the traditional distribution of insurance policies done by individual insurance agents. Africans regularly depend on old-style channels to trade and process policies. This results in poor customer satisfaction, higher distribution costs, and a long processing cycle.
Consequently, this affects how premiums are paid. Therefore, in 2018, Jihan Abass founded Lami Technologies to make insurance products accessible to everyone in Kenya.
Jihan told TechCrunch that 97% of Africans don’t buy insurance, and that’s the problem they want to solve. The driving force for them was making insurance widely available, and building technological infrastructure to ease the delivery of insurance was the best way to increase the penetration in Africa.
Although selling directly would be a challenge, they adopted a B2B2C approach to leverage the trust already built by channels that communicate with customers regularly.
Lami allows businesses to offer digital insurance products to their users through an Application Programming Interface (API), which partner businesses can also use to manage their insurance needs.
Since 2018, the African startup has sold about 5,000 policies and partnered with over 25 active underwriters, including Pioneer and Britam. These underwriters help allocate over 30 products for medical and employee benefits to motor and device insurance.
It appears African insurance startups are finding a way to break into the market and investors are buying into it. About a month ago, Curacel, an agritech insurtech company, raised $450,000 pre-seed to expand to ten African countries.
Also, two weeks ago, OKO, an agritech insurtech company raised $1.2 million to build its presence across Africa. Perhaps, technology could be the solution to the slow-paced acceptance of insurance on the continent.