As we’ve seen around the world, and especially across the African continent, most low-income people don’t have a financial safety net when emergencies and challenges arise. Only 3 percent of Africans outside of South Africa have access to insurance, compared to 8 percent of those in developed markets and 6 percent globally. People with access to insurance products are typically higher-income consumers. Lami Technologies, an Accion Venture Lab investee, works to broaden access to affordable and relevant insurance in Africa so that more people can build financial security.
Through Lami’s tech platform, business-to-consumer (B2C) businesses like banks and e-commerce companies can develop and sell insurance to their customers. This approach allows low-income consumers to purchase insurance specific to their needs from businesses they already know and trust. The Lami team and their partners aim to put their customers’ needs first by upholding a customer-centric approach to product design and serving end clients with insurance offerings that are relevant to their lives.
After its founding in 2018 by Jihan Abass, Lami launched a B2C offering that proves that their back-end can support the distribution of insurance for larger partners and reach even more people. Today, they work with several insurers, reinsurers, and partners in Kenya and are exploring international markets such as Nigeria, Egypt, and Uganda. Lami’s model is well-positioned for international expansion and furthering their goal of providing coverage for more Africans across the region. We’re excited to invest in Lami because they:
Reach low-income Africans with affordable, relevant insurance
Because of the low adoption rate of insurance across Africa, many people are financially underprepared for life’s emergencies and unaware of the importance and relevance of insurance. Lami offers an innovative solution for these customers by expanding their options for affordable insurance, thus providing more protection that may not have been offered in the past. There is ample space for an innovator like Lami to grow by reaching the large population of uninsured people in Africa and introducing more products into the market.
Lami has the potential to significantly expand the selection of insurance products available to end customers. They have found interesting ways to embed insurance into their customers’ daily lives by meeting people where they are, from making online purchases to taking public transportation. Lami provides an alternative pathway for consumers to purchase affordable, convenient insurance by allowing them to buy customized products from banks, telecommunications companies, and other businesses that partner with Lami. These partners, Lami’s B2B clients, can draw on their understanding of their customer base to create products tailored to the needs of specific segments. Core to their model is their effort to offer the right insurance products to customers at the right moment via the most appropriate channel and partner. The fact that the insurance products are sold by brands that consumers already know builds trust and awareness in the market at large, which helps overcome major barriers to uptake.
Leverage technology to quickly and efficiently offer embedded insurance
Lami streamlines each step of the insurance process for their partner businesses, from user management to claims payout. Their technology compresses the timeline to launch an insurance product from 18 months to one month and reduces the development costs for a B2B client to deploy an insurance product by 80 percent. In doing so, Lami opens the door for a broad array of new providers to offer contextualized insurance for traditionally underserved clients. Through its infrastructure model, Lami can help accelerate insurance penetration in Kenya and other African markets.
Corporate clients such as banks, telcos, e-commerce platforms, and logistics companies work with Lami to design digital insurance products tailored to the needs of their customers and employees. Products are white-labeled and sold with the client brand and through the client’s website or app, using Lami’s APIs, while Lami runs all the back-end processes. We envision that with an offering like this, more corporate clients will be excited to build financial services offerings into the services and products they provide for their customers. With access to Lami’s technology, partners, and know-how, they can better serve their customers.
Utilize unique data to provide affordable insurance that meets people’s needs
Lami sits between B2B corporate clients and underwriting partners (i.e., insurance companies), allowing Lami to request, capture, and interpret unique data that can help them better design, price, and distribute insurance offerings. During the onboarding process, Lami works closely with its B2B partners to ensure they are gathering the right kind of data from that client’s platform to provide and ultimately design insurance offerings for consumers and businesses. From there, Lami liaises with underwriters to design products. From an impact perspective, we believe that Lami will be in a position to “widen the funnel” to include traditionally underserved consumers who will now gain access to these products while allowing partners and underwriters to distribute competitively priced products.
We are excited about Lami’s future and look forward to supporting the company as they grow and expand, helping close the gaps between insured and uninsured people across Africa.