Inclusivity Solutions offers digital insurance solutions targeted at low-to-middle income consumers in emerging markets.
The company’s infrastructure – a platform called ASPin – supports the end-to-end insurance value chain. It partners with companies such as mobile network operators, banks and others to distribute products, and with local insurance companies to underwrite the risk.
The company helps both the distributor and the insurer find solutions tailored to the target market. Products span life, health and P&C and include simple life protection, hospital cash, personal accident, small business asset protection and education savings. Often these products are delivered by mobile phone and Inclusivity Solutions helps distribution partners collect premiums through channels such as M-Pesa, and local insurers settle claims.
Currently Inclusivity Solutions has products live in Rwanda, Kenya and Cote D’Ivoire, where they are serving 600,000 customers.
The company recently raised $1.5 million in Series A, and are backed by Goodwell Investments, Umkhathi Wethu Ventures (in partnership with Allan Gray) and RGAx. For 2019, they are focused on scaling their footprint and are looking towards other emerging markets in Eastern Europe, Asia and Latin America as well as developing their data and analytics capabilities.
THE OXBOW PARTNERS VIEW
The sale of simple, affordable insurance products – often referred to as microinsurance – to low-to-middle income consumers in emerging markets is gaining traction. The market presents a significant opportunity to firms like Inclusivity Solutions and insurers; estimates have put the total market size at around four billion policies globally. It is estimated that around 500 million policies have been sold in the past decade, suggesting considerable upside.
However, the market presents several challenges, too. Low customer awareness of the benefits of insurance (some customers do not realise that insurance is often bundled into SIM cards), low premiums and a lack of historic claims data are examples.
In this environment it is essential to maximise volumes and optimise operations and technology. Leveraging the capabilities of distribution partners and payment channels like M-Pesa is a good way to do this.
The segment dynamics also present challenges to multi-national groups who often have head offices in higher income centres such as Singapore or Johannesburg. To achieve operational efficiency it is essential to push operations into the lower-cost markets where many of the customers are, which can often require a rethink of global operating models.