Swiss Re Foundation Announces $0.5m Grant To Fund Africa’s Insurance Innovations
By Africa Ahead
The Swiss Re Foundation has announced a US$500,000 grant to spur innovation of insurance products for the underserved communities in Africa in the wake of rising risks.
The funding, which will be distributed through FSD Africa’s supported BimaLab insurance accelerator programme, will help promising insurtechs to introduce and scale up innovative products targeting low-income groups, currently left out by existing insurance products.
“We acknowledge the role of the insurance sector in spurring the growth and development of the African continent. Through programmes such as BimaLab, the most vulnerable and low-income people will gain from the innovative, affordable and efficient insurance products and services,” said Stefan Huber Fux, director of Swiss Re Foundation.
The programme will help turn validated insurance-focused ideas to market and investor-ready and provide innovators with enabling regulatory environment for developing their ideas, according to the brief by the Foundation.
The foundation, started by Swiss Re in October 2011 to, among other goals, support innovations that boost societal resilience, had issued grants in 44 countries by 2021 and made $86.6m commitments between 2012 and 2021.
The Swiss Re Foundation grant will help define a path for scaling the BimaLab from three to ten countries, thereby allowing a deeper dive and creating a mechanism for continued technical support and funding.
FSD currently runs the BimaLab programme in Kenya, Ghana and Nigeria. The Swiss Re Foundation grant comes at a time plans are underway to expand to Ethiopia, Uganda, Rwanda, Zimbabwe, Malawi, Egypt and Morocco.
More than 500,000 customers have been reached and more than $1m raised by BimaLab insurtechs since the start of the programme in 2020.
“While the African continent continues to report low insurance uptake, there are numerous opportunities for innovators in insurance. We are optimistic that through the grant, the underserved communities will soon start enjoying the safety net provided by insurance from many external threats like natural disasters, health threats and economic disruptions,” said Kelvin Massingham, director of risk and resilience at FSD Africa.
The BimaLab programme has so far enabled 40 insurtechs to gain visibility and push for resources to scale their innovations. About 43 unique products and services have reached over 600,000 customers since 2020.
In 2023, BimaLab programme seeks to accelerate 20 insurtechs across the ten African countries in order to speed up growth and penetration of inclusive insurance products.
“The support of the Swiss Re Foundation is a significant step towards building an innovative and climate-focused insurance industry that will accommodate the evolving needs of the uninsured,” added Elias Omondi, senior manager of risk regulations at FSD Africa.
Many Africa’s underwriters are facing the challenge of delivering relevant and affordable insurance products to customers at the base of economic pyramid.
Just under 3% of Africa’s GDP is driven by insurance, which is less than half the world average of 7%, yet insurance is what provides a safety net from many external threats.
Digital technologies are rapidly changing the insurance landscape in sub-Saharan Africa and are being seen as the pathway to cutting administrative costs and launching customer-centric products to help grow insurance penetration.
But reluctance by regulators to approve innovative products and insurtechs’ limited data and low availability of finance in the early and growth stages have been holding back the pace of growth.
