MyCover.ai is on a mission to provide financial security to Africans by improving access to insurance products. Despite Nigeria being Africa's most populous country, its insurance penetration rate is among the lowest in the region, currently standing at just 0.5% as of March 2022.
In contrast, South Africa's insurance penetration rate is much higher, at around 14%, while Kenya's is around 2.8%. However, the low insurance penetration rate in Nigeria is not unique to the country, according to the African Insurance Barometer 2021, insurance penetration in Africa as a whole is only 2.8%, which is significantly lower than the global average of 6.2%.
The same report found that only 16% of Africans have any form of insurance coverage, compared to the global average of 26%. This highlights the significant insurance gap that exists in Africa.
One of the main reasons for the low insurance penetration in Africa is a lack of awareness and understanding of insurance products. Many people view insurance as an unnecessary expense or do not understand how insurance can benefit them.
The Co-founder and CEO of MyCover.ai, Adebowale Banjo, believes that Nigeria's low insurance penetration rate is largely due to a lack of insurance education. He explains that insurance should be viewed as a vital financial principle, just like savings and investments.
Banjo uses the analogy of a football team to describe the roles that different financial instruments play in one's financial life. “Your financial life can be likened to a football team. Investments are your strikers because they get you riches, wealth and improve your net worth (scoring goals).
Your savings are your midfielders, and they perform two major roles: protecting the defence and launching the attack. You take from your savings to build your investments, and they also come in handy to bail you out during rainy days.
But no football team plays with only strikers and midfielders, they also need defenders. This is where insurance comes in; when life deals you a bad hand, insurance is your cover. When your car has an accident, insurance is your cover. When you suddenly fall sick, insurance can cover you.
Hence, you don’t have to dip into your savings or investments to cover the cost of repair or a hospital bill, your insurance company covers all that, protecting your finances. So living without insurance is like a football team playing with only midfielders and attackers and no defenders.
Unfortunately, that's what most people do. When you fall ill, if you don't have a health insurance plan, it means, you will take your savings, and spend it in the hospital. Whereas if you had an insurance plan, it serves as a form of defence to your savings and investments.”
MyCover.ai is an open insurance API that enables businesses and innovators to embed and distribute insurance to anyone in Africa. Additionally, MyCoverGenius, the startup's solution for small and medium-sized businesses, allows them to buy insurance products directly from the platform while offering a seamless experience; it is the one-stop shop for insurance.
Through partnerships with fintechs, e-commerce platforms, logistics companies, lenders, proptechs, and other industries, MyCover.ai aims to improve access to insurance products and make insurance adoption more widespread.
MyCover.ai is working to drive the adoption of insurance by building Africa's digital insurance infrastructure. The startup, which is backed by Techstars Toronto, currently offers integration to 9 leading insurance companies with more than 30 insurance products, including Health Insurance, Credit Life Insurance, Gadget Insurance, Travel Insurance, and Goods in Transit insurance among many other insurance products.
Banjo believes that embedded insurance, a form of digital bundling that allows startups to offer insurance policies as an add-on, is an effective way to increase insurance adoption. MyCover.ai is already integrating with over 30 insurance distributors and has positioned itself as the go-to partner for embedded insurance solutions on the continent.
The startup, which was founded in November 2020, is led by Adebowale Banjo, co-founder and CEO; Alexander Igwe-Ifendu, Co-founder/Chief Product Officer; and Fred Ebho, Co-Founder/Chief Technology Officer.
MyCover.ai plans to deepen its presence in Nigeria and then venture into other African markets like Kenya, Ghana, and Rwanda. The potential for growth is immense, particularly with the continent's young, upwardly mobile population that has access to the internet.
MyCover.ai is poised to lead the way in driving the expansion of insurance development in the region. The startup's innovative approach to insurance is a step towards a more financially inclusive future for the continent.