The recent East and Southern Africa Regional Conference on Inclusive Insurance showcased Kenya’s continuing role as a pioneer in the microinsurance space in Sub-Saharan Africa. Several early microinsurance products were piloted in the country, while new solutions are often tested there to gauge their likelihood of success. Kenya’s vibrant microinsurance sector has been quick to try new technologies. This has enabled traditional insurers to launch microinsurance services, while existing distribution structures have taken advantage of digital use cases.
While innovation accelerators have been around for some time, microinsurance-specific accelerators are a relatively new concept. To benefit from Kenya’s increasing use of technology, the first BimaLab Accelerator was launched in 2021 by the Insurance Regulatory Authority and FSD Africa. The accelerator offers insurtechs the environment to develop new products and trial customer journeys, and allows regulators to develop regulations aimed at promoting growth and innovation.
The BimaLab programme itself was launched in 2020 with the aim of supporting “insurtechs by accelerating the lifecycle of innovative startups, compressing years’ worth of learning-by-doing into just a few months”. Twelve companies were selected for a 10-week programme that exposed them to expertise, resources, and support to develop and scale market-ready solutions. In addition to FSD Africa, the Swiss Re Foundation, Prudential, the Swiss Capacity Building Facility and GIZ Africa have provided the venture with significant support. Each stakeholder’s ultimate aim is to see an increase in the insurance penetration rate in Africa, which currently stands at around 3% of gross domestic product.
In addition to Kenya, 10 insurtechs each from Ghana and Nigeria were inducted in the BimaLab in 2022. Collectively across these three countries, BimaLab has achieved impressive results in just over two years (Figure 1). Importantly, This cohort succeeded in raising over US$1 million in funding, highlighting the programme’s strength and commitment to crowding in additional capital.
Figure 1: BimaLab in numbers (May 2023)
| Insurtechs inducted | 40 |
| Products and services launched | 43 |
| Customers reached | 500,000 |
| Policies issued | 1,000,000 |
Source: BimaLab
BimaLab’s success is important for several reasons. It shows investor confidence in microinsurance, whose commercial sustainability and profitability are regularly questioned. Innovation specifically targeted at microinsurance products and services is not often front of mind for many traditional insurers: funding to encourage innovation either does not exist or is considered a low priority. This is compounded by insurers discounting their premiums to bring more partners into their ecosystems, which further diminishes having money set aside to innovate. While some insurers are keen to reverse this trend and use technology to improve their products and their reach, accelerators – such as BimaLab – can offer an alternative platform for innovation.
“Through the BimaLab Accelerator, insuretechs can grow and develop the potential to reach underserved markets, and create improved customer value. Innovation means that the industry can put its money where its mouth is and increase its chances of seeing results.” Elias Omondi, FSD Africa, Kenya
Many insurtechs and innovators typically struggle in the “investment valley of death”. To overcome this, BimaLab offers a combination of access to funding opportunities, technology skills and regulatory clarity. BimaLab’s success rests on helping insurtechs to develop the skills and tools needed to succeed and scale. This is part of its goal to connect technology, talent and trends as a way of increasing insurance penetration and coverage, and developing supportive legislation (Figure 2).
Figure 2: BimaLab’s pillars on increasing insurance penetration
| Connect | Attract key players to collaborate on innovative products |
| Create | Stimulate product development and partnerships |
| Scale | Fuel growth through connections by building investor links |
Source: BimaLab
Through this approach, the accelerator has an ambitious target of serving one million customers by 2025 and turning fragmented markets into mature ones. Given that it has reached the halfway mark in less than two years, BimaLab can expect to surpass this milestone within the next two years. To achieve this, BimaLab was rolled out in 10 countries across Africa in 2023 and includes 20 businesses at either the minimum viable product or post-revenue stage. The insurtechs are spread across Egypt, Ethiopia, Ghana, Kenya, Malawi, Morocco, Nigeria, Rwanda, Uganda and Zimbabwe.
This cohort will be put through a five-month acceleration programme that will include:
While the objective of BimLab is to create an enabling environment for insurance innovation, its purpose involves overcoming the recurrent challenges that have held back growth in Africa’s insurance markets. This includes a weak demand for insurance, which is driven by restrictive regulations, affordability and a lack of trust in insurance among consumers. Weak demand is accompanied by low-quality supply, which is a result of a lack of expertise in developing solutions, low margins due to a lack of data and modelling skills, and inefficient market reach. Tackling these barriers in a coordinated manner offers an opportunity to convert ideas into products, pilots into sustainable growth models and improve resilience among the underinsured.