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  • There’s a big business opportunity in small insurance. How big? Africa-sized. Before the COVID-19 pandemic, McKinsey predicted that the African insurance market would grow at around 7% per year between 2020 and 2025 – nearly twice as fast as North America.
  • For the low-income majority of the continent’s population, microinsurance is the most accessible form of insurance.
  • Through cost-effective insurance cloud SaaS, microinsurance is an in-demand product you can brand, implement and launch in just a few weeks. 

Microinsurance was invented in the 1980’s to make simple life insurance cover accessible to low-income consumers, in exchange for low premium payments. Today it brings cover to many communities who could not afford insurance before, and it’s booming in Africa. 

While the market in micro life insurance is already thriving there’s a big gap – yet to be filled – for context-based short-term insurance, a compelling insurance solution for both low-income consumers (because of the cost) and young, tech-savvy millennials, because they want flexible financial solutions that fit with their lifestyle. 

Done right, microinsurance is simple and cost-effective to launch, distribute and manage – even for a non-insurance company, through the adoption of two solutions:

  • Rapid-deployment insurance SaaS like ours – already being used by leading South African retailers (more on the benefits below).
  • A convenient microinsurance cell captive agreement with a suitable underwriter.

The time is right for non-insurers to enter the microinsurance space because, after years of regulatory limbo, the 2018 – 2019 implementation of a regulatory framework for South African microinsurance should  lower the regulatory barriers for new entrants and informal players. Other countries in the sub-continent are likely to take their cue from South Africa’s progress on regulations.

This is a revenue-generating opportunity for almost any company …

  • A mobile provider ready to launch mobile-first insurance to customers
  • A remittance platform wanting to expand its financial offering
  • An OEM, retailer or loans company serving low-income communities
  • A millennial-facing brand wanting to form closer ties with tech-savvy consumers
  • A traditional insurer not yet trading in the microinsurance space
  • An existing micro insurer wanting to make its products digital and omnichannel

What kind of microinsurance could you offer?

This is where the fun begins. Because microinsurance is a low-ticket insurance product that can cover almost any item or incident, you can get truly innovative with the kinds of products you launch to market. More than 50% of South Africa’s microinsurance market is already in life insurance and funeral cover. The opportunity-rich space to play in now is that other 50%, with context-based microinsurance products that can meet a multitude of needs. Just a few of the possibilities:

  • Insurance for mobile phones (the phones at the core of your insurance distribution)
  • Micro health cover for unexpected health expenses
  • Mosquito bite insurance in areas where Malaria is prevalent
  • Accident insurance for frequent travellers
  • Shop insurance for taverns, spaza shops and co-operatives
  • Goods-in-transit insurance for suppliers delivering to same
  • Regional cross-border transport insurance
  • Residence insurance, specifically against fire and flooding
  • Crop and livestock insurance for farmers
  • Insurance to extend cross-border payments to family members, or school fee payments, in the event of loss of income 
  • Pay-as-you-drive auto insurance
  • Cover for traders’ mobile payment devices
  • Insurance for diesel generators
  • Bundled insurance products e.g. dental plus optical 

The kinds of microinsurance products you might offer really depend on who you will be catering to, where, and in what context – but the possible variations and combinations are endless. We look forward to brainstorming with you, outside of the traditional box.

Why make your microinsurance digital with Click2Sure?

 The kind of insurance products we specialise in building for clients are embedded insurance, and it’s the future of insurance. A report by InsTech London forecasts that the embedded insurance market will grow to $722 billion in gross written premium [GWP] by 2030 – more than six times the size that it is today. 

Through technology and automation, embedded insurance improves revenue streams for traditional insurers and enables non-insurers to enter the industry. On the consumer side, research shows clear market demand for embedded insurance offers.

There are six reasons why embedded is the best way to launch insurance today:

It’s incredibly cost-effective

Because embedded insurance is built with pay-as-you-use SaaS, and because it digitises and automates a large chunk of the insurance value chain, the personnel/equipment/manual costs of traditional insurance are removed, and you significantly cut down the acquisition cost per policy sold, compared to other distribution channels.

While-label brand-building power

While your new insurance line would be engineered by us, it would be wholly owned and branded by you, in a form your target market will most resonate with (have a look at India’s Digit which targets the mass market, or Yas in Hong Kong, which has a millennial feel to it ).

Affordable omnichannel distribution

Consider these statistics:

The days of deploying a small army of insurance agents from Saldanha Bay to Swaziland are long gone. With mobile phones as the primary platform, Click2Sure can digitise your microinsurance offering and engineer it to reach people almost anywhere through WhatsApp, SMS or cost-free unstructured supplementary service data (USSD) on old-fashioned feature phones (still fairly prevalent in South Africa’s lower-income rural communities). 

We would embed distribution of the insurance products directly into your existing systems and utilise all possible distribution channels, with your mobisite/website/app at the core. 

QR codes are still widely in use in Africa, and we’ll use those for your insurance products, too. QR codes can be placed literally anywhere, from packaging for livestock feed to the back of bus seats. They enable consumers to take out new insurance policies in just a few clicks, without the paperwork of complicated traditional insurance.

Self-service automated functionality for claims

Once a policy is live, policyholders can submit claims online (via a dedicated Client Portal), which will be processed with a high degree of automation: system notified; claim assessed; claim queried (if necessary); claim settled; claim paid. As the product owner, you’ll only be flagged when human interaction is required. Via the Client Portal, policy holders can also update their policies, extend them or take-out additional policies (which you can cross-sell to them via the same portal). 

Simple back-end management

You do not need to have any experience managing insurance policies when you partner with us. We make the insurance administrative function 100% digital and easy to manage, with our software standardising and aligning all administration documents and workflow templates from end to end, in a modular manner. The software we implement for insurance policy management is full-stack and multi-layered, but that is all “under the hood”; policy administrators relying on our solution only experience the ease and efficiency of use. 

Big data

Through the insurance product’s digitisation and automation, you can acquire a constantly growing bank of policy and customer data that can inform your decisions on winning or lagging policy types; cross-selling and up-selling opportunities; premium pricing levels and other key aspects of your microinsurance product. The data advantages include:

  • Bordereau reports (file download, FTP or API with captive-cell insurer)
  • Standard management reports (sales, age analysis, un/successful collections and more)
  • Live dashboards (claims, sales, churn, loss ratio, business mix, and more)
  • Data analytics (data warehousing, APIs to Tableau and more).

Startling stats on why microinsurance is going big in Africa

There’s immense room for microinsurance growth in Africa, because the rate of insurance penetration in Africa is still low. South Africa leads with 16.99%; Namibia, Lesotho, Mauritius and Zimbabwe range between 4%-7% and more than half of sub-Saharan countries have a penetration rate of less than 1%.

Consider that low penetration rate (to date) alongside Africa’s predicted population of 2,4 billion by 2050; the proven appeal of microinsurance to lower-income consumers; the continent’s high rate of mobile take-up, and the ability of embedded insurance to distribute insurance via mobile and it’s clear that little insurance is about to go very big.

30 Days to go-live

The future of insurance is closer than you think. Once you contact the Click2Sure team and we have workshopped your goals together with you, we can get to work building you a minimum viable product (MVP) and have it ready to test, review and go live in as little as a month.

If (your brand name here) is ready to launch a high-demand microinsurance product, contact the Click2Sure team on +27 (10) 045 4019 or [email protected].

Award-winning Click2Sure is engineering the future of insurance in collaboration with traditional insurers, mobile providers, OEMs, retailers and e-retailers, microfinanciers and loan providers, banks and neobanks, couriers and carriers, FMCG and lifestyle brands.

Click2Sure features as a leading enabler in two new global reports on the embedded insurance landscape, The Market Map: Embedded Insurance 2.0 and the Open and Embedded Insurance 2022 Report.

* News headlines one month from now.