How smart contracts and mobile technology is changing the insurance landscape in Africa

With low penetration rates, innovative insurance companies are turning to tech with tools like smart contracts to bring more to the fold.

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According to experts, the insurance penetration in Africa lags behind the world average. Its rate is less than 3% compared to global averages of almost 8%. With growing threats, Africa poses a case for innovation but only if the challenges are dealt with.

Affordability is a key factor that has kept many away from insurance products. The premium payments and slow claims process have made many sceptical about the benefits of insurance. However, experts now believe those challenges can be tackled through the use of technology. With technology, the rise of microinsurance that enables small premium payments are key to unlocking the plateaued growth of insurance in Africa.

Research firm Brookings states in their analysis that: “Technology adoption and innovation are the keys to growth in the African insurance industry. Microinsurance could also change the name of the game, as it can reach Africa’s rising middle class through small-scale, low-cost, low-risk products.”

These Microinsurance products can partner with or be a product of telecommunication firms that have a larger audience spread across the various economic groups.

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