As many as 2.8% of Africans are uninsured, which is lower than half the worldwide common of 6.3%, making it the least insured continent on this planet. Regardless of the abysmal quantity, there’s some excellent news. In keeping with a McKinsey report, most African nations have skilled double-digit insurance coverage development in CAGR in native forex during the last 5 years, thus positioning the area because the second-fastest rising for insurance coverage globally after Latin America.
The burgeoning market is indicative that insurtechs are actively offering varied options to companies and finish shoppers, serving to them handle the dangers of purchases starting from shopping for automobiles to accessing lodging.
Within the newest improvement, Curacel, a Nigeria-based platform that goals to drive insurance coverage penetration in rising markets through APIs enabling insurers to attach with digital distribution channels and administer their claims, has raised $3 million in seed funding. Based by Henry Mascot and John Dada in 2019, Curacel is constructing the “rails to make insurance coverage work for the subsequent billion Africans and empowering companies in every single place with the know-how to embed insurance coverage for his or her customers.”
Initially, Curacel was meant to be an digital well being info administration platform for healthcare suppliers, enabling clinics to digitize and handle paper information, appointments, affected person communications, billing and reporting by means of an internet app. However quickly, the co-founders realized a a lot greater drawback dealing with healthcare, significantly as regards insurance coverage.
Though insurance coverage penetration could be very low in Africa, many insurers’ processes are time-consuming, costly and vulnerable to fraud and waste as a result of they use paper and antiquated know-how. Because of this, billions are misplaced by African insurers yearly to fraudulent, wasteful and abusive (FWA) claims, making them cautious and risk-averse when coping with clients. The pivot meant that Curacel’s new enterprise centered on offering know-how to assist insurers mitigate losses whereas digitizing and settling extra professional claims, with solely human intervention required for high quality management.
“In late 2019, we began fixing an issue for medical health insurance firms across the infrastructure for digitizing claims. And our key thought after we began doing that was insurance coverage firms throughout the continent had been dropping about 20% of their premiums to fraud, waste and abuse. One thing wanted to be achieved to chop down on fraud in order that insurance coverage firms can reinvest into creating cheaper merchandise for the tip client,” Mascot stated in an interview with TechCrunch.
The YC-backed startup is doing to insurtech what Flutterwave, Sew and Anchor have achieved to funds and banking companies with their varied APIs. The three-year-old firm is unbundling insurance coverage merchandise for a number of companies to extend inclusion and adoption on the continent. To this point, its tech caters to distribution and claims automation.
The distribution enterprise is basically its embedded insurance coverage product Develop. It’s utilized by over 100 firms, together with banks, fintechs, logistics and e-commerce platforms throughout eight African markets: Nigeria, Ghana, Kenya, Uganda, Tanzania, Rwanda, Morocco and Egypt. A few of these shoppers, which based on Curacel, improve their recurring revenues with its digital insurance coverage merchandise, embrace ALAT, Providus, PalmPay and Float.
However, claims automation is solely focused at insurance coverage firms, which use the platform to enhance the effectivity and accuracy of their claims processes; Curacel has 20 of them as companions in the meanwhile, together with AXA Mansard, Previous Mutual and Jubilee Insurance coverage. Curacel says its “AI-powered” infrastructure means claims will be submitted and processed in real-time, serving to insurers scale back their claims cycle by greater than 70% and course of as much as 10x extra claims.
The Nigerian insurtech, which works with greater than 5,000 service suppliers throughout its eight markets, claims to have processed greater than $100 million value of claims since inception. Final yr, Curacel grew its transaction quantity by 600% and elevated its income by 500%, it stated in an announcement. The corporate’s revenues come from charging an annual payment for declare processing and fraud detection. It additionally units take charges on premiums and fees companies for utilizing its APIs.
Whereas it at the moment works round claims and distribution, Mascot stated Curacel could be trying to present underwriting and insurance coverage cost companies through its APIs. Diversifying its merchandise is a technique it needs to remain forward of the competitors, which is changing into fierce in Africa’s insurtech landscapes. Corporations resembling Harlem Capital-backed Lami and Naspers-backed Bare present related companies to extend insurance coverage penetration throughout their respective markets.
“We’ve bought claims and distribution, that are our go-to merchandise. Down the road, we need to cope with underwriting, funds, and so forth. We need to construct that platform that, down the road, permits insurance coverage firms to run a few of their enterprise or run all their companies throughout our ecosystem,” famous CEO Mascot on Curacel’s product roadmap.
On the decision, Mascot talked about a number of occasions that the insurtech was constructed to serve companies in rising markets, not simply Africa. The chief government hopes Curacel’s latest service rollout into North Africa through Egypt and Morocco will act as a forerunner to doing the identical for companies outdoors Africa. For now, although, the corporate will use the funding to deepen its presence throughout the continent.
Traders within the seed spherical embrace Tencent, Blue Level Capital Companions, Pioneer Fund, Olive Tree Capital, Y Combinator and AAF Administration and Elefund (traders in New York-based insurtech Positive; the latter additionally backed Pie Insurance coverage).
“Africa stays a comparatively untapped market relating to insurance coverage and know-how presents one of the best alternative to succeed in new customers and ship glorious companies,” Serik Kaldykulov, the overall accomplice at Elefund, commented on the spherical. “Curacel has constructed a set of options and a formidable monitor report of success that makes us very excited to be supporting them on their mission to make use of know-how to drive up insurance coverage inclusion in Africa.”
Fitbit CEO James Park, Flutterwave CEO Olugbenga Agboola and Kuda CEO Babs Ogundeyi had been a few of the particular person traders within the seed spherical. Curacel says some executives from Covergenius, Zopper and Pie Insurance coverage will be part of its advisory board as a part of the spherical.