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

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

However, with a rising younger inhabitants, rising 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 trying to deepen penetration. One answer primarily based out of Nigeria, MyCover.aiis saying right now 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 traders Founders Manufacturing unit Africa and Techstars.

The Nigerian insurtech startup, which participated within the Techstars Toronto program final yr, mentioned it’ll use the funding to bolster its in-house operations and tech expertise, make investments closely in its proprietary expertise and strategically broaden 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 broaden 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 advised TechCrunch on a name.

Banjo based MyCover.ai, which gives an open insurance coverage API that permits companies to embed insurance coverage into their present services, 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. Consequently, there’s an absence of visibility into what they need to optimize for shoppers, resulting in an absence of entry on the shoppers’ half — and for individuals who have entry, they pay premiums. In abstract, the principle 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 an entire, 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 isn’t there, the visibility and the info required to enhance on merchandise and underwriting progressively was missing.”

Initially, the founders constructed a comparability web site, 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 growth, distribution, and insurance coverage claims. They believed this is able to shortly energy the adoption and development of insurance coverage in Nigeria.

MyCover.ai

Picture Credit: MyCover.ai

MyCover.ai gives 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 might select from over 30 customized insurance coverage merchandise to embed into their platforms. As an illustration, 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 wish 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, the whole lot boils all the way down to the expertise folks get. What we perceive or see out there is that folks might be extra aligned to customized merchandise than simply getting any insurance coverage product out there. So what we try to do is to enhance prospects’ insurance coverage expertise and assist launch customized merchandise primarily based on existence and particular nuances,” Igwe-Ifendu added on the decision.

Solely 0.5% of Nigeria’s inhabitants is roofed, in keeping with the Nationwide Insurance coverage Fee (NAICOM). Which means that most individuals within the nation have by no means obtained insurance coverage protection and should depend on private funds to avoid wasting themselves in case of emergency. People are left defenseless and making an attempt to recuperate from unfavourable circumstances, regularly plunging them into extra poverty. This is the reason 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 protecting 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 growth at MallforAfrica, additionally disclosed that the insurtech platform, which is in varied phases 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 yr and intends to duplicate the identical development by the top of this yr.

Commenting on the funding, Dotun Olowoporoku, basic companion at Ventures Platform, mentioned, “Adebowale and his crew 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 target particular areas of insurance coverage penetration among the many underserved, MyCover.ai takes a collaborative method and affords a collection of companies that cowl the whole spectrum of those challenges.”

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