Kenyan Insurance Tech, Lami Raises $1.8M Seed Funding to Expand its Solution Across Africa
Kenyan Insurance Tech, Lami Raises $1.8M Seed Funding to Expand its Solution Across Africa
Africa has one of the lowest penetration rates of insurance in the world. According to a 2018 McKinsey study, penetration is approximately 3%. This is significantly less than the 7.23 percent global average.
Lami Technologies, a Nairobi-based insurance startup, has raised $1.8 million in seed funding to help accelerate the adoption of its innovative technology across the continent.
Accion Venture Lab led the funding round, which also included AAIC, Consonance, P1 Ventures, Acuity Ventures, The Continent Venture Partners, and Future Africa.
According to the company's CEO, Jihan Abass, the new funding will be used to expand its workforce, improve its technology, and gradually close the insurance gap in Africa by expanding its presence.
Filling Africa’s Insurance Gap
South Africa is Africa's only country with a high insurance penetration rate. With a penetration rate of 13.4 percent, Statista ranks it among the top three in the world. Kenya and Nigeria, on the other hand, have a rate of 2.83 percent and 0.3 percent, respectively.
Jihan Abass, a Kenyan entrepreneur, founded Lami Technologies in 2018 with the goal of breaking Africa's 3% insurance penetration barrier.
Lami's API Insurance platform enables partner businesses - including banks, technology companies, and other entities - to easily and seamlessly offer digital insurance products to their users.
Lami also assists partner businesses, such as e-commerce platform Jumia, in managing their own insurance requirements by connecting them to underwriters.
What makes Lami Unique
The majority of insurance providers on the continent are unable to provide African consumers with flexible, affordable, and tailored insurance coverage.
The low rate of insurance adoption is partly due to the traditional method of policy distribution and administration. Distribution continues to be primarily through brick-and-mortar channels, with policies being sold and processed manually. As a result, the processing cycle is lengthened, customer satisfaction is decreased, and distribution costs are increased.
Lami has, however, discovered a way to mitigate the majority of these issues. It does so through the use of cloud computing, automation, and third-party service providers such as emergency and valuation databases, as well as identity and asset verification databases.
Additionally, it assists in the development, distribution, and management of highly streamlined and competitive insurance products tailored to the needs of customers.
The insurance technology startup's vision is to help millions improve their financial resilience by making insurance products more accessible and affordable to underserved populations through its innovative offerings.
The startup has sold over 5,000 policies and partnered with over 25 active underwriters, including Britam, Pioneer, and Madison Insurance. Additionally, it has distributed over 30 products, including health, auto, employee benefits, and device insurance.
Ashley Lewis, Africa Director, Accion Venture Lab, expressed great confidence in Lami's business model when speaking about startups.
According to her, “by embedding customized insurance within well-known and trusted businesses, Lami makes insurance accessible to Africa's underserved populations and enables them to build financial resilience.”
In conclusion
Africa's annual insurance market, despite its low penetration, is worth more than $60 billion.
Lami's CEO believes that the insurance industry has enormous potential.
As a pioneer in the digital insurance space, the company intends to use its new infusion of capital to continue diversifying its business through new partnerships and enhancements to its core technology.
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