Jamii Africa, a Tanzanian insurance technology firm, received $1 million funding during Q3 of the year as it seeks to accelerate it business across its market of operation, and venture into Kenya.
The InsurTech, a micro-health mobile policy management platform that offers insurance policies for as low as Ksh100 per month through mobile phones, was funded by Bill & Melinda Gates Foundation, GSMA Ecosystem Accelerator Innovation Fund, Seedstars World, Tiphub, XL Africa, US-based entrepreneur Patrick Munis and a number of undisclosed Investors.
The financial backing is one of the 57 InsurTech transactions that were successfully completed globally during the period under review, a 27 per cent drop compared to the Q2 of the year, says Willis Towers Watson in its latest Quarterly InsurTech Briefing.
Global InsurTech firms closed $1.3 billion of funding during the Q3, which was more than double the funding volume over the prior quarter.
The trend of growing round sizes continues. Q3 2018 saw eight transactions over $40 million, compared with six in the first half of 2018.
Insurance and reinsurance companies continue to actively participate in the funding of InsurTech, but the pace decreased as compared with prior quarter.
Interest in InsurTech has soared of the last few years as they are able to take unique approaches to incorporate technology in order to address inefficiencies or coverage gaps that exist within the existing insurance ecosystem.
Also, they are using data (third-party and proprietary), advanced sensors and Internet of Things capabilities to develop a new paradigm of insurance offerings for the connected world.
“Customers demand peace of mind, and high basis risk substantially diminishes the value proposition of insurance,” says Rafal Walkiewicz, chief executive officer, Willis Towers Watson Securities.
InsurTech firms are also becoming a favourable option as they are deploying parametric structures compared indemnity-based insurance. This enables them to pay out a predefined sum based on a trigger chosen as a proxy for a loss.
“The impact of parametric insurance can be much more profound than simply lowering frictional costs and mitigating the potential for fraud,” added Mr Walkiewicz.
According to the brief by WLTW, early-stage investments remained strong; Seed and Series A accounted for 64 per cent of total transactions since 2013 and 58 per cent in the quarter under review.
Property and Casualty funding volume increased by 32 per cent over Q2 2018 and increased 224 per cent from Q3 2017. There were 40 P&C transactions in the quarter, which was slightly below the 44 transactions in Q2 2018, but 48 per cent higher than Q3 2017.
Life and Health funding volume was up 367 per cent from Q2 2018 and increased 406 per cent from Q3 of 2017. Despite the overall deal count being down from Q2 2018 and Q3 2017, the $687 million in funding value for the quarter was the highest amount since Q2 of 2017 and the third highest on record.
Jamii Africa has partnered with Jubilee Insurance to target low-income, informal-sector workers in Tanzania. Its platform performs all the administration activities of an insurer and allows over 20,000 active users to access over 400 hospitals.
There are a number of InsurTech firms in Kenya notably being WazInsure by GrassRoots Bima, BlueWave, Bismart, KakBima and InsureAfrika.
