Bitesize InsurTech: BIMA

June 18, 2016 Chris Sandilands

This week we highlight BIMA (pronounced “Beema”, and Swahili for “insurance”), a mobile micro-insurance broker aimed at under developed markets. To date it has raised $60m in funding, most recently completing a Series C last year.

This is no longer a startup – it is 6 years old – so what is it doing in our weekly bitesize? We bring it to your attention because of its success in bringing insurance to the masses of “uninsureds”. 80% of their customers have never bought an insurance policy before.

The BIMA mobile insurance platform offers life, health and accident insurance directly to consumers as well as a white-label service for use by MFIs (microfinance institutions) and mobile operators. Mobile has a high penetration rate in underdeveloped markets and is proving successful as a means to introduce new buyers to financial products.

Partnering with financial service businesses also makes a lot of sense for mobile operators, as products can be configured to incentivise customer loyalty and increase mobile usage. For example, Tigo (part of Millicom telecoms group) has created a “Family Care” life insurance product, underwritten by the Prudential. Cover depends on a minimum monthly airtime payment, and they’ve seen retention and average spend rise. BIMA manage product development, marketing and policy administration (including claims).

Using mobile operators’ billing methods, premiums are charged on a pay-as-you-go basis in blocks of a few months. As you would expect when over 90% of its customers live on less than $10 a day, policy amounts are “micro” in value. As an example, the flagship own-brand product, Family Life Protect, costs $6 for up to $300 of cover over 12 months.

Clearly, volume is the game and BIMA does not disappoint.  It was launched in Ghana in late 2010 and now operates in fifteen markets across Africa, Asia and South America. It employs over 3,500 agents, generates 500,000 new customers each month and has provided insurance to over 20 million customers so far.

This is clearly a force for good in providing millions of people with protection, when previously they relied on the Gods.  However, and as you would expect, it is also a force for making money.  BIMA is building a customer base from the ground up, and many of their customers will form part of the global emerging middle class.  There is a tipping point when the aspirational recognise that they have something to protect, typically their health and that of their family. This often then develops into the desire to protect the education of their children (a proxy for future wealth) before spreading into the desire to protect physical items.  If one can access this train early on, as BIMA appears to have done, and retain their loyalty with good service, then the future looks very bright for this business.

In short, BIMA offers a product that is perceived as of value, at a price point that is affordable, sold in a way that is convenient!