Affordability is among the greatest impediments for insurance penetration in Kenya. Often, coverage holders are required to make one-off funds for long-term covers, and the quoted sums are often past the attain of most individuals. It is that this hole that Kenyan insurtech MotiSure is working to seal.
The startup, which targets bike taxi (boda boda) operators, their passengers and customers of different types of public transport (hereafter commuters), is constructing a enterprise round each day micro-payments for personal accident covers, with some premiums going as little as $0.1.
Users can opt-in to the service USSD code and make funds utilizing cellular cash. The API-powered platform is utilizing know-how to disrupt a market that’s largely dominated by conventional insurance corporations, a lot of that are reluctant to abandon prolonged paperwork, and conventional fee modalities for each premiums and claims.
“We are providing safety nets through insurance at affordable prices, and through easy to access channels,” MotiSure, CEO & co-founder Joel Macharia informed TechCrunch.
The personal accident protection for bike taxi operators, which requires premiums of $0.1 day ($3 a month) contains medical bills up to $6,000 yearly, and fee for lack of earnings due to hospitalization following an accident, incapacity or loss of life. Riders have to make constant funds for at the least seven days to get the advantages.
Joel Macharia, co-founder and CEO of MotiSure, which is driving on micro-payments to drive personal mobility insurance growth. Image Credits: MotiSure
MotiSure is eyeing a market with greater than 1.4 million registered bikes as per authorities date (2018). The quantity is rising, with 210,103 bikes being imported into the nation in 2020; with the variety of imports rising by 20% in 2020 and 15% final 12 months, bikes stay a well-liked technique of transport in Kenya and throughout Africa.
Commuters are additionally eligible for a personal accident cowl for each journey they take, with the premiums they pay being based mostly on length of the journey. Unlike the riders, the commuters qualify for advantages instantly, and MotiSure is taking a look at an estimated 1.53 million commuters who use public transport on daily basis.
The startup, launched in July final 12 months, has teamed up with quite a lot of public service car corporations in Kenya to pilot their product.
“One of the barriers to entry is cost, and that is why we have settled for these micro payments and pay per use to make the cost a bit more negligible such that people don’t mind paying,” stated Macharia.
The Micro Insurance Company (previously MicroGuarantee), which has operations in lots of rising markets, is the startup’s underwriter.
Macharia stated their strategy was knowledgeable by research displaying that boda boda riders desired insurance merchandise that went past asset protection. In Kenya, all autos together with bikes are required to at the least have a third-party insurance coverage (which is what most policyholders get), usually the most affordable possibility, however which leaves out the homeowners of the property uncovered in case of accidents. This is even supposing bike accidents account for about 20% of street accident accidents in Kenya.
“The existing comprehensive or third-party covers don’t cover the rider or pillion passengers. And we found out that because of the nature of their jobs, they (riders) wanted a cover that can take care of eventualities like hospitalization, death or disability. Most of these operators are breadwinners and they wanted their families well taken care of in case things took a turn for the worst. They were also keen on taking care of small bike repairs… we have sorted this out for them,” stated Macharia whereas including that taking time to do analysis and discuss with potential clients was vital for making the product market-fit.
“The way we did our product is very unique. We went to the customers first to understand their patterns. We sat down with groups of people in different regions across the country and asked them what they wanted in an insurance cover. Then we came up with a list of similar covers they wanted and we noted them down, and engaged them to come up with what was most relevant and the most convenient way to make the payments,” stated Macharia.
Macharia’s curiosity within the sector started in 2018 when he launched a pay-per-use micro insurance product for motor autos — which was knowledgeable by knowledge and patterns he had noticed when he operated an vehicle restore store. He puzzled why most of his shoppers who solely used their autos on weekends have been compelled to join yearly insurance policies.
The concept, nonetheless, failed to take off, as a result of the native companions he had focused to assist roll it out weren’t as useful. Not one to take rejection simply, he set out to construct the mandatory know-how and execute the concept as he envisioned, beginning with the plenty.
Macharia stated they’ve practically 10,000 policyholders, and have a capability of up to 15,000 for the time being, however will open up to extra individuals because the startup grows, and as they associate with third events to embed the duvet in different companies. He has his eyes on different markets too.
“The same problem exists across East Africa, and we are looking at how we can offer this within other regions in Africa, as we scale the business, grow the customer base and enhance our products.”