The Legacy of the African Insurance Market being Ruined by Digital-First Players


The vast uninsured masses in many African countries have not been sufficiently covered by the old medical insurance paradigm, which exclusively covers the wealthiest individuals.

For instance, in the nations, it services, Kenya, Uganda, and Nigeria, “the large majority of the population doesn’t have insurance,” according to Ted Pantone, CEO, and co-founder of Nairobi-based InsurTech startup Turaco.

He made it clear that this isn’t due to a lack of insurers, but rather that traditional insurers are “focused on the top five, 10% of the market.” He also pointed out that because the conventional approach relies on brokers selling specific plans, they must provide expensive items in order to generate enough income.

In order to solve this problem, Turaco has begun to alter the insurance distribution process by abandoning the antiquated agent-driven sales paradigm. Instead, the company promotes, sells, and delivers insurance policies using a partnership-based, digital-first strategy.

According to Pantone, Turaco interacts with other businesses that have a substantial user base, whether those users are clients or employees, in order to provide insurance products on a business-to-business-to-customer (B2B-B2C) basis.

Some of the company’s partners include banks, mobile network operators, telecommunications companies, microfinance institutions, and gig economy vendors, but Pantone noted that the basic business model could theoretically be extended to “any user base of any business that has an ongoing financial transaction with their users.”

He said that by combining insurance with existing services, these partners may offer “multiple layers of value,” such as increasing client retention, generating extra revenue, and enhancing their clientele’s overall resilience.

In order to demonstrate the value that Turaco adds to enterprises, Pantone emphasized the company’s above-average conversion rates among eligible clientele and its “very close to 0%” rate of insurance cancellations.

He went on to note that these levels have remained constant due to the high demand for insurance in the countries and sectors that Turaco works in. Pantone claims that huge markets are opened up if customers realize they can actually get insurance coverage for $1, $2, or $3 per month.