The delayed acceptance of innovations in the insurance industry is to blame for Africa’s poor insurance penetration rate, which currently sits below 3%. Many underwriters still use old-fashioned methods involving agents and paperwork when they sign up new clients.
This makes it harder for them to reach more potential buyers and slows down the spread of their products. But a turning point is coming up because insurtech companies like Turaco, based in Kenya, are coming out with new technology and products. These companies are currently disrupting the market.
Raising the funds
Through its B2B2C business model, Turaco has built an extensive distribution network, which has given it access to a large pool of potential clients in its markets. As a result, the company can now offer insurance to a group of people who have never purchased it before.
The company, which also has operations in Uganda and Nigeria, has reached the growth phase of its business and is looking for further partnerships to increase the number of people in Africa who have mass market insurance policies. A successful business strategy drives this growth.
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Through its Cathay Africinvest Innovation Fund (CAIF) and Novastar Ventures, AfricInvest has been in charge of a $10 million Series A equity fundraising round. This round was the backdrop for the growth that the firm intends to implement. Participation in the round by Enza Capital, Global Partnerships, Zephyr Acorn, Operator Stack, Asi Ventures Limited, and Push Ventures brought the total amount of money that Turaco has raised to 13.3 million.
Turaco sets its sights on reaching 1 billion people.
Within the next quarter of a century, our goal is to provide health insurance to one billion people, and that’s where our focus is right now. I have a crystal clear vision of being able to ensure one hundred million people, even though this is an ambitious objective in every sense of the word, and I can’t even correctly define how to get there. Working with some of the world’s most well-known brands is required to advance to the next growth stage. We have the proper combination of talented people, ambitious goals, cutting-edge technology, and a forward-thinking vision to get us there. However, we have a very long road ahead of us, ” In an interview with TechCrunch, Ted Pantone, co-founder and CEO of Turaco, said
Pantone and Peter Gross started Turaco as a joint venture after working together at MIC Global (Micro-Ensure), a company that offers built-in insurance with technology.
“I want to spend the rest of my life doing something that is both socially impactful and commercially scalable, and that something is insuring a billion people,” he added. “This is both socially impactful and commercially scalable.”
The application programming interface (API) integration that Turaco offers lets its partners, like PayGo companies (M-KOPA), ride-hailing platforms (SafeBoda), fintechs, and microfinance institutions, bundle insurance with their main products or services.
The insurtech company works closely with each partner to “design and sell its insurance products as a white-labelled offering.” Customers can get insurance for their lives, assets, medical needs, and vehicles starting at just $0.2.
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Because the value proposition is so well thought out, we frequently see a more than 50% conversion rate whenever we sell into one of these partnerships. And individuals are very aware of the risks, such as having to go to the hospital for unexpected medical treatment and paying off that charge.
The problem is not supply and demand. People will genuinely, honestly want to buy insurance if it is built suitably for them from the perspective of a price point value proposition and if it is marketed in a way that is both frictionless and efficient. Therefore, the distribution model constitutes the primary focus of most of our innovations. According to Pantone, “that is the key to what we are fixing to make it easy for people to say yes, and then pay for insurance.”
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To this point, the insurtech company has attracted almost half a million consumers, of which 268,000 are active users. Since 2020, the number of users has increased by 300 per cent. Pantone said its success could be linked to its business model and value offer, which are good for both partners and end customers.
Yassine Oussaifi, a partner at AfricInvest and co-head of CAIF said, “We believe Turaco has developed the tools and know-how to fill this gap and reach low-income earners with products suited to their needs.” “This is a key part of the effort to protect the most vulnerable from sudden financial burdens and shocks.” The TuracoAs long as the number of people with insurance in Sub-Saharan Africa stays below 3%, one of the lowest rates in the world.
About Turaco
The Turaco is a stunningly colourful bird whose primary function is to serve as a “go-away” bird, alerting other animals to the existence of potential danger.
Turaco’s vision is to be an organization that its employees and customers love being a part of because they make everyone’s life better and safer.
The Turaco group helps young people feel safe from the dangers of the outside world by encouraging them to be themselves and making it easy for them to make friends who care about them. When one of their workers spots a real threat, they all work together to find ways to deal with it.