Except for South Africa, at 70%, Africa’s insurance market currently stands at a mere 2.78% overall penetration as of 2019. This low rate is partly attributable to most insurance providers on the continent failing to offer insurance coverage and products that suit the needs of an African consumer.
In Kenya, for example, less than 20% of the population has access to health insurance. This low penetration level is reflected in auto, life and other forms of insurance coverage, leaving many vulnerable to emergency financial shocks and unforeseen black swan events such as Covid-19. As a result, out of pocket payments are still the predominant method of financing healthcare in Kenya and many African countries.
One reason for such low insurance adoption is that current offerings are often inflexible and provide little to no value to users. It also contributes to the archaic distribution and administration of policies, which mainly still rely on brick-and-mortar channels where policies are sold and processed manually.
This poor setup naturally results in longer processing cycles and higher distribution costs. For example, under most insurance policies, customers face restrictions on what is covered, lack a proper understanding of coverage terms, face complicated and lengthy claims processes, and find a lack of adequate customer support.
The uptake of private insurance has also been extremely slow, with 89 per cent of the 20% that have access to health insurance in Kenya currently covered by government schemes such as the National Hospital Insurance Fund. This is mainly because customers often lack awareness and access to information, and previous experiences scar many.
This is the problem Lami is solving.
The Future: Lami
Lami’s insurance platform enables partner businesses - including banks, tech companies, and other entities – to quickly and seamlessly offer digital insurance products to their users via Lami’s API. The company also connects partner organisations with underwriters and allows them to provide a superior customer experience.
Through Lami’s API, users can get a quotation for motor, medical, or other insurance products in seconds, customise the benefits, adjust the premium to suit their needs, and get their policy documents instantly.
One of Lami’s key differentiators is its ability to develop products quickly. In contrast to the rigid 18-month cycle of traditional providers, Lami’s direct integration with insurance companies means they can go from product creation to launch in about a month. The team is also looking at creative use cases that have the potential to cover customers across more areas of their lives, from travel insurance for daily bus rides to digital insurance to protect valuable assets, in addition to simple vehicle coverage.
The insurtech startup has partnered with more than 25 active underwriters, including Britam, Pioneer, and Madison Insurance, distributing more than 30 products, including medical, motor, employee benefits, and device insurance. As an innovator in the digital insurance space, Lami aims to continue diversifying its business by looking for new partners and building on its core technology.
Since Lami reaches users through a brand they already know and trust, it avoids investing in outreach and brand building. For example, in September 2021, the company announced a partnership with Sendy to launch a “per-trip insurance policy for transporters in Kenya”. By integrating with existing platforms, they are taking a new approach to customer acquisition, which has been the hamstring of most new insurance products.
How does Lami Work?
Lami’s product’s centre is its flexible insurance rating engine and direct integration with several parties and insurance companies. Lami co-designs innovative products with its underwriting partners to offer businesses unique insurance products that can be extended to their underlying customer base to meet their needs and cash flows, such as monthly medical policies for employees at startups and small scale businesses.
Lami’s digital insurance platform leverages cloud computing, automation, and third-party service providers such as emergency and valuation, or identity and asset verification databases, to offer a comprehensive ecosystem for the businesses they partner with to develop, distribute and manage highly streamlined and competitive insurance products that are designed to meet their customers’ needs.
In addition, Lami’s API integrates with these digital organisations to reach the uninsured user. It automates the underwriting and claims processes to offer seamless insurance products that meet users’ needs. This simultaneously increases the organisation’s value to those customers while decreasing costs for Lami.
On the other hand, Lami’s platform and API allow current insurance companies to digitise their existing offerings, seamlessly link with underwriters, and access dashboards with detailed customer data to enhance decision-making. This digitisation also enables other types of businesses to begin offering insurance through their existing interfaces.
Lami’s partners can co-create products with underwriters that better meet the customers’ needs through its API. They can also tweak and adjust existing products to become more relevant and accessible, improve risk profiling, and make swift product changes to respond to the changing customer preferences.
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The Team
Founded in 2018 by Jihan Abass to democratise customers’ needs insurance products in Kenya, Lami has a multinational and cross-disciplinary team spread out in Africa and Europe.
Jihan Abass, Founder & CEO; Before starting Lami, Jihan was formerly a commodity futures trader and sugar trader at a trading house in London, United Kingdom, where she traded on the New York City and London sugar markets. She has an MBA from the University of Oxford and an undergraduate degree in Finance from CASS Business School, London.
Roy Perlot, CFO/COO; Roy has entrepreneurial and investment experience as a shareholder and through Private Equity roles on Boards and directly and in-directly through management roles through operational involvement in portfolio companies and direct corporate experience as Head of Corporate Development and CFO in the technology sector. In addition, he has valuable experience in aspects involved with M&A and Private Equity (Investment side and Portfolio management) through Morgan Stanley, Lazard, Exotix and Helios Investment Partners.
At Future Africa, we are excited to be a part of Lami’s journey to transform the future of insurtech across Africa. We welcome Lami's team to the Future Africa community.
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