THIS WEEK in TECH

Banjo: MyCover.ai’s Innovative Insurtech Solutions Drives Financial Inclusion, Trust

In this interview with Nosa Alekhuogie, the CEO of MyCover.ai Adebowale Banjo, discusses the transformation of the insurance sector in Nigeria and Africa through technological innovations like Insurtech. He also addresses the challenges faced and several other pertinent issues. Excerpts:

Can you give an overview of MyCover.ai, including its primary objectives in the insurance industry?

MyCover.ai is an innovative insurtech platform that is transforming the insurance landscape in Africa. Our primary objectives are twofold. First, we aim to make insurance more accessible and enjoyable for Africans by integrating policies into their favourite products and services. This approach allows customers to seamlessly access insurance coverage while engaging with the things they love. Second, we are streamlining the claims process for insurance companies and users, making it faster, simpler, and more efficient. Our solution is an open insurance API that aims to deepen insurance penetration and liberalise insurance processes across Africa. By leveraging this API, innovators and businesses can embed insurance products into their existing offerings or launch new insurance verticals. For insurance companies, our platform facilitates faster product distribution and simplifies their claims management. We aim to enhance users’ experiences and ensure they get the insurance products they need effortlessly.

Can you explain what insurtech is and how it is transforming the insurance industry?

Insurtech, short for insurance technology, is the integration of technology into the insurance sector to improve and transform various aspects of the insurance process. It involves leveraging modern technologies like artificial intelligence, big data analytics, Blockchain, Internet of Things (IoT), and mobile applications to offer more efficient, customer-centric, and data-driven insurance services. At MyCover.ai, we embrace the core principles of insurtech. We develop digital tools, platforms, and applications that simplify and enhance every step of the insurance journey. From policy purchasing and product utilisation to claims processing, we utilise cutting-edge technologies to create a seamless and personalised insurance experience for our customers.

What makes MyCover.ai stand out from other insurtech companies?

Several factors set MyCover.ai apart within the insurtech landscape. Firstly, our approach is unique and collaborative – we are building Africa’s digital insurance infrastructure. This means we add value across the entire insurance value chain, from underwriting and product development through our co-creation of insurance products, to distribution using our API and B2B platform, to policy management with our user-friendly Mobile App, and finally, to claims management with our AI-powered service.

How has insurtech impacted the insurance landscape in Africa?

Insurtech has had a transformative impact on the insurance landscape in Nigeria and Africa. Historically, insurance adoption has been low in many parts of Africa due to limited access. However, insurtech companies have unlocked new distribution channels, making insurance products more accessible to customers who were previously excluded.

In addition, insurtech has optimised insurance processes, making them faster, more efficient and customer-friendly. Policy underwriting, claims processing, and customer service have all seen improvements through automation and digitisation. As a result, customers can now obtain rates, purchase policies, and process claims more quickly and conveniently.

Moreover, insurtech has led to the introduction of innovative insurance products and business models.

For instance, peer-to-peer insurance platforms have gained popularity in certain African countries, allowing communities to pool resources and offer financial support during challenging times. Additionally, usage-based insurance has become more prevalent, offering flexible and cost-effective coverage tailored to individual behaviour or usage data. Overall, insurtech is reshaping the insurance industry in Africa, driving increased insurance penetration, and offering more customer-centric solutions.

How is technology being leveraged to enhance insurance accessibility in Africa?

Technology plays a crucial role in enhancing insurance accessibility in Africa, revolutionising the way insurance products and services are delivered to underserved populations. Mobile phones have become game-changers, and insurers are leveraging this technology to offer mobile-based insurance solutions. Mobile apps and SMS-based services enable customers to compare, purchase, and manage insurance policies directly from their smartphones. Insurtech companies are also creating digital platforms that allow customers to access insurance products and services online. These platforms offer a user-friendly interface, making it easy for individuals to compare policies, get quotes, and make online payments, reducing the need for physical interactions.

Advanced technologies like data analytics and artificial intelligence are being utilised to improve risk assessment and underwriting processes. Insurers can now offer more accurate and personalised insurance products tailored to customers’ specific needs and risk profiles.

AI-powered chatbots are also being employed for customer support, providing quick responses to queries and helping customers navigate insurance-related issues faster. By leveraging these technological advancements, the insurance industry in Africa is breaking barriers, extending insurance coverage to previously underserved populations, and making insurance products and services more accessible, convenient, and tailored to customers’ needs in the region.

What are the challenges facing insurtech adoption in Africa?

While insurtech has been embraced, it still faces some challenges in Africa. There is limited digital infrastructure; In many regions, reliable internet connectivity and widespread access to smartphones are lacking, hindering the widespread adoption of insurtech solutions. Without adequate digital infrastructure, it becomes challenging for insurtech companies to reach potential customers, particularly those in rural areas.

We also live in a regulatory environment, and because Insurtech is relatively new in Africa, the regulatory landscape can be complex and uncertain. The current regulations may not fully accommodate the innovative business models and technologies that insurtech brings. A supportive and adaptable regulatory environment is crucial to foster insurtech growth while ensuring consumer protection.

I will also say building trust is critical in the insurance industry, and this holds true for insurtech as well. Some potential customers may be sceptical about using digital insurance platforms due to concerns about data privacy, security, and the reliability of these services. Raising awareness about insurtech and its advantages is vital to overcoming these trust issues. Despite these challenges, the potential benefits of insurtech in Africa, such as increased insurance penetration, better risk management, and improved customer experience, are driving efforts to overcome these obstacles. Insurtech companies, policymakers, and stakeholders are working collaboratively to address these challenges and foster insurtech adoption and growth across the continent.

How is insurtech contributing to financial inclusion in Nigeria?

Insurtech has played a crucial role in promoting financial inclusion in Nigeria by providing affordable and personalised insurance products that cater to underserved populations. Through innovative technologies and product development, insurtech companies offer microinsurance and pay-as-you-go models, making insurance accessible to low-income segments without complex processes or high premiums.

Microinsurance, in particular, is filling the gap for regions with limited access to traditional insurance products. By offering microinsurance options, insurtech empowers low-income individuals to mitigate risks, improve financial resilience, and create pathways for upward social and economic mobility. These products function as a social safety net during crises, supporting vulnerable populations and contributing to overall community well-being. By leveraging technology and product innovation, insurtech is providing insurance solutions that are tailored to the needs of low-income individuals, promoting economic stability, entrepreneurship, and investment opportunities.

How are traditional insurance companies adapting to the rise of insurtech?

Traditional insurance companies are embracing insurtech and recognising its potential to transform the industry. Many traditional insurers are actively collaborating with insurtech companies like MyCover.ai to enhance their product offerings and reach new consumers. They understand that insurtech is the key to unlocking the next level of insurance adoption in Africa. Partnerships between traditional insurers and insurtech startups have proven beneficial. Insurtech firms bring technology-driven innovations to the table, redefining internal processes, providing deeper data insights, improving customer experiences, and streamlining claims management. This collaboration helps traditional insurers adapt to changing market dynamics and remain competitive in the digital age. Furthermore, some traditional insurance companies are investing in insurtech startups to strengthen their partnerships and gain a competitive edge in the evolving insurance landscape.

Insurtech startups often face challenges in gaining customers’ trust accustomed to traditional insurance models. How does MyCover.ai build trust and credibility among its users?

Building trust and credibility is paramount for MyCover.ai. MyCover.ai has earned credibility first by partnering with leading insurance providers in Nigeria, we work with the biggest brands in insurance, and that gives our customers a strong level of confidence. We have also built solutions that work, which guarantee great customer satisfaction and, consequently, strong referrals and recommendations. Our platform ensures data security and customer privacy while focusing on clear communication and transparency to help partners and customers make informed decisions. We also provide technical and operational support throughout their engagement with us, solidifying our position as a reliable and customer-friendly company.

In Nigeria, where insurance penetration has historically been low, what strategies are the insurance industry employing to raise awareness and stimulate greater demand for insurance products and services?

The insurance industry in Nigeria is employing several strategies to raise awareness and stimulate demand for insurance products and services. There is a concerted effort by all players in the industry to drive awareness. The regulators, insurance companies, insurtechs and industry associations are investing in consumer education initiatives to inform the public about the importance of insurance and its benefits. These campaigns aim to dispel misconceptions, build trust, and highlight the role insurance plays in providing financial protection and security. With the increasing use of digital platforms in Nigeria, insurance players are leveraging digital marketing strategies to reach a broader audience. They are establishing an active online presence through websites, social media, and mobile apps to engage potential customers and provide easy access to insurance information.

In addition, Insurance companies are forming strategic partnerships with banks, microfinance institutions, mobile network operators, and other distribution channels to extend the reach of insurance products. These partnerships allow insurers to tap into existing customer bases and leverage established networks for awareness and distribution.

For regions with limited access to traditional insurance products, how does microinsurance fill the gap and empower low-income individuals to mitigate risks, improve financial resilience, and create pathways for upward social and economic mobility?

Statistically, Nigerians spend about 60 per cent of their income on food, which means there is little left for anything else; when you also consider that a large population of Nigerians are poor, the need for microinsurance becomes very glaring. The people that fall into this category are the ones that need insurance the most because they cannot afford to rebound from unfavourable incidents or occurrences themselves. Unfortunately, they can’t afford traditional insurance products as well, and that is where microinsurance comes in.

Technology and product innovation allow us to create and distribute inexpensive and personalised insurance products to the poor. These are typically products that insure their health, life and livelihood, and they are able to make daily contributions for these products or contribute as they earn, which reduces the financial burden on them. Microinsurance protects them from spiralling into abject poverty, promotes mental well-being and community strength, and gives low-income people a better future.