Love them or despise them … the radio adverts for South African insurtech disruptors Pineapple and Naked are difficult to ignore. In its Lose Wait campaign – a play on the words ‘weight’ and ‘wait’ – Naked casts itself as a time-saving alternative to traditional insurers. The ad prompted a complaint that it was insensitive to people with eating disorders and body image issues. But the Advertising Regulatory Board ruled that while the ad might be ‘tasteless’, it did not cause widespread offence.

Meanwhile, many listeners found the Pineapple’ ad featuring an excruciating few seconds of radio silence just plain irritating – so irritating that people can’t forget it. ‘Like I know it’s only 30 seconds but in those moments it makes me want to crash my car and fight with the first taxi I see,’ one Reddit user complained.

Despite what some might see as an overly flippant attitude to the industry, they couldn’t be more serious about insurtech’s ability to help people.

At last glance, AI-powered Naked had collected almost ZAR500 million in successive funding rounds since 2016, and Pineapple, had raised US$27.2 million over seven rounds, scoring the largest chunk (US$21.3 million) at the end of last year.

It’s strange to think of an insurer wanting to make a positive social impact. After all, the insurance industry is among the least trusted in the world, consistently ranking below banks, credit card companies and other payments industries, according to the Reinsurance Group of America.

One of Naked Insurance’s unique selling points is its plan to pay out leftover premiums each year to charitable causes championed by their customers. It also believes that insurance is there to help people. ‘There are so many bad stories about insurance claims not being paid out. It’s almost at the bottom of the list of industries that people trust the least, and many people feel insurance is unnecessary,’ Naked co-founder Sumarie Greybe told News24 last year.

‘But we believe it is absolutely essential for a community, as shown by the floods in KwaZulu-Natal [in 2022]. How do people get back on their feet without insurance?’

Pineapple, meanwhile, is on a mission to put customers at the centre of its business. ‘In all facets of decision-making, you need to focus on the customer and put them first,’ says chief development officer Ndabenhle Junior Ngulube.

Pineapple CEO Marnus van Heerden argues that many insurers place the customer’s needs second to the company’s processes. ‘They think “we need to implement AI or a chatbot” without considering whether these methods will actually be useful to a customer looking to buy insurance.’ He adds that insurers should constantly assess what processes are working for customers and which are detrimental.

Simon Schwall, founder and CEO of OKO, an agri-insurer working in Mali and Uganda, explains his take on insurtech’s value. ‘In Africa today, insurers are able to sell insurance to people who have bank accounts, cars, houses and stable jobs. But beyond that, most people remain uninsured. Companies, at large, lack the technological tools to bring insurance to individuals, especially in the rural areas.’

In Kenya, Turaco, which offers affordable health and life assurance across the continent, aspires to insure 1 billion people. Formed in 2019, it had 1.5 million members at the end of last year, one-third of those joining in the last four months of 2023. Founder Ted Pantone told Connecting Africa that the company was passionate about insuring the uninsured, noting that insurance penetration on the continent is the lowest in the world at 3%. ‘The reality is that even middle-class families slip into poverty after having a devastating health emergency – all because they do not have insurance,’ he said.

In September, Turaco announced it was venturing into car insurance, by partnering with auto-tech start-up Autochek Kenya to offer the latter’s clients access to a flexible, bundled insurance solution integrating vehicle financing, insurance, vehicle tracking and maintenance.

Another Kenyan insurtech, Pula, has since 2015 insured about 15.4 million smallholder farmers in Africa, Asia and Latin America against pests, diseases and extreme weather events. Securing US$20 million in Series B funding earlier this year, it is exploring new partnerships, including for new livestock cover.

The insurtech firm is driven by its Triple100 vision, bringing insurance to 100 million smallholder farmers. ‘What started nine years ago as an unconventional idea that many deemed unscalable is now a proven solution that has solved real needs for millions of smallholder farmers across 22 countries,’ according to Pula CEO Thomas Njeru. Pula doesn’t sell insurance directly to farmers, but has formed a network of partners – including banks, agriculture input producers and governments – to embed insurance in, for example, agricultural inputs, such as seed and fertiliser.

‘An impact on farmers’ livelihoods can be seen through our partner insurer’s payouts – which have reached close to over US$40 million to 900 000 farmers since Pula’s inception to date,’ says Njeru.

Speaking at a conference on the fusion of technology and insurance held in Lagos in October, Bode Pedro, the founder of Nigeria’s first 100% digital insurance provider, Casava, emphasised the need for industry leaders to address unemployment and create job opportunities. Society and the insurance industry would both benefit.

‘People need jobs. People need an opportunity to live their lives and grow,’ he said. ‘So I’m developing this thought process where we can be truly part of change. Because if you are part of the job creation, you will get insurance penetration. So, learn from the past, collaborate and create jobs to drive insurance.’

Then there are the insurtechs that work to drive the back end of digital insurance solutions. MyCover.ai, also based in Nigeria, offers an API that makes it simple for insurance companies to distribute their products more quickly and affordably, while also making them more available to the general public by embedding the insurance products in common items bought by consumers online.

Since 2021, it has built up its network of distributors to 30, partnered with nine insurance companies to create 20 insurance products, and grown its active user base to 10 000 users month-on-month.

‘Beyond the metrics and revenue, the idea for us is the lives we have touched,’ says MyCover founder Adebowale Banjo. ‘Seeing the lives we have touched in terms of mothers who have had their babies in the hospital, people who had accidents and recovered because of the insurance policy they had, and all of the amazing things that have happened.

‘Those things make you see how important insurance is, and it can be the difference between moving on very quickly or struggling for a very long time.’

Good intentions aside, insurtechs still need to be financially sustainable. While last year’s 53% downturn in funding deals in Africa to a total of US$30.4 million indicates a challenging future ahead, deal activity showed signs of resilience, growing 13% year-on-year with a total of 17 deals struck. In 2022, PwC valued the African insurtech market at about US$1.2 billion and projected a CAGR of 25% over the next five years.

But, as Banjo says, it’s about more than the metrics and revenue. ‘Our mission is to provide financial security for Africans by improving access to insurance products.’

Images: Gallo/Getty Images, Freepik