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Kenya’s insurtech Turaco maintains target of 1 billion users as it raises $10 million in funding • londonbusinessblog.com

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Insurance penetration in Africa is currently below 3%, largely due to the slow adoption of innovation in the sector. Many insurers rely on traditional agent and paperwork systems to sign up new customers, which limits customer reach and hinders adoption of their products. However, there is a turning point ahead as insurtechs like Kenya-based insurtech Turaco introduce new technologies and products that are disrupting the market.

Due to its B2B2C model, turaco has created an extensive distribution channel that allows it to tap into a large pool of potential customers in its markets and provide insurance to a group that has never used it before.

Driven by a viable business model, the startup, which also operates in Uganda and Nigeria, has entered its growth phase and is looking at more partnerships to drive mass insurance adoption in Africa.

The startup’s planned growth comes against the backdrop of a $10 million Series A-share financing in a round led by AfricInvest, through the Cathay Africinvest Innovation Fund (CAIF) and Novastar Ventures. Enza Capital, Global Partnerships, Zephyr Acorn, Operator Stack, Asi Ventures Limited and Push Ventures also participated in the round, bringing Turaco’s total funding to 13.3 million.

“We want to insure a billion people in the next 25 years and we are building towards that. It’s a bold goal in every way and I can’t even really describe how to get there, but I have a clear vision to secure 100 million people. To reach that next stage of growth, you need to partner with some of the biggest brands in the world. We have the right mix of talent, ambition, technology and vision to get there. But it’s certainly a long road for us,” Ted PantoneTuraco co-founder and CEO told londonbusinessblog.com.

Pantone co-founded with . Turaco on Peter Gross after their stint with MIC Global (Micro-Ensure), a technology-enabled embedded insurer.

“Insuring a billion people is what I want to do for the rest of my life, and this is both socially and commercially scalable,” he said.

Through API integration, Turaco’s partners such as PayGo companies (M-KOPA), ride-hailing platforms (SafeBoda), fintechs and microfinance institutions can bundle insurance with their core products or services.

The insurtech works closely with each partner to “design and distribute its insurance products as a white-label offering”. The customers buy life, asset, medical and auto insurance from as little as $0.20.

“We usually get over 50% conversion rates when we sell to these partnerships because the value proposition really makes sense. And people are very aware of the risks, such as medical emergencies and the hospital bill. Demand is not the problem. People actually really want to buy insurance if it’s properly designed for them from a price proposal, and if it’s sold in a frictionless, efficient way. So most of our innovation really revolves around the distribution model. That’s really the key we’re making to make it really easy for people to say yes and then pay for the insurance,” Pantone said.

The insurtech has so far reached more than half a million customers, of whom 268,000 are active. The number of users has grown by 300% since 2020. Pantone attributed the growth to their business model and value proposition, which he says works for both partners and end users.

“As insurance penetration in Sub-Saharan Africa remains below 3%, one of the lowest rates in the world, we believe Turaco has developed the tools and know-how to fill this gap and reach low-income people with products that are tailored to their needs, so a critical part of the effort to help protect the most underprivileged from unforeseen financial burdens and shocks,” AfricInvest and CAIF co-head, partner Yassine Oussaifi, said in a statement.

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