MyCover.ai, the insurtech startup building Africa’s digital insurance infrastructure has officially secured a $1.25 million pre-seed funding round to bolster its in-house operations and tech talent, invest heavily in its proprietary technology and strategically expand its operations into other African markets.
The round led by Ventures Platform, includes participation from Founders Factory Africa and TechStars, who are making a follow-on investment after the startup’s participation in its 2022 Toronto Accelerator program.
Adebowale Banjo, CEO of MyCover.ai said, “The current insurance landscape is plagued by fragmentation and inefficiencies that hinder distribution and adoption. Affordable, accessible, and frictionless insurance remains a significant challenge for many customers, and we are proud to be at the forefront of change, constructing a robust infrastructure that addresses these critical issues head-on.”
“We are building the rails that will power the growth and adoption of insurance across Africa, and we are delighted to have the support of our new and returning investors whose deep knowledge and extensive expertise in our region will help accelerate the attainment of our objectives,” he said.
Founded in 2021, MyCover.ai is focused on addressing the pain points that exist in the African insurance market, such as the lack of access, inadequate coverage, the unaffordability of insurance products, and the poor customer experience surrounding insurance processes.
By operating across three essential touchpoints, the company addresses these problems: underwriting and product development, distribution, and insurance claims, where the claims processes are streamlined for insurance companies and the end-users.
In the wider African market, over half of the countries in the continent have insurance penetration rates below 2 percent. South Africa, however, remains a reference point of what can be achieved and exceeded on the continent, with an insurance penetration rate of 16.99 percent. MyCover.ai’s suite of products has been developed to close this gap and solve the previously insurmountable problem of insurance distribution in Nigeria and the rest of Africa.
The company provides an open insurance API that integrates with leading insurance companies, such as Hygeia, Leadway, Sovereign Trust, AIICO Insurance, and Allianz, to offer over 30 personalised insurance products, allowing other businesses and innovators to embed these insurance products into their platforms.
MyCover.ai’s collaboration with insurance companies ensures that their products are efficiently distributed through the API, offering benefits such as faster and cost-effective distribution, access to customer utilisation data, simplified onboarding and policy management processes, access to new customer segments, improved claims processes, and opportunities to develop new products. For startups and businesses looking to embed insurance into their offerings, MyCover.ai provides easy integration through its API and SDK, enabling seamless insurance offerings to customers and, ultimately, revenue growth.
The insurtech company’s mission is to provide financial security to Africans by improving access to insurance products. Nigerians, for example, are exposed to a wide range of risks and vulnerabilities on a daily basis. From health challenges to asset loss and damage and the potential loss of livelihood, the threats faced are multifaceted.
According to the National Insurance Commission (NAICOM), only 0.5 percent of Nigeria’s population is insured. The majority of the population has never purchased insurance policies and resort to out-of-pocket payments in times of loss – if they can even afford it. This dire situation leaves individuals vulnerable and struggling to recover from unfavourable incidents, often plunging them into abject poverty.
Dotun Olowoporoku, General Partner at Ventures Platform, commented, “Adebowale and his team are reshaping the insurance landscape in Nigeria and have their eyes set on the wider African market, by building the much-needed insurance infrastructure on the continent.
“Unlike other insurtech solutions that focus on specific areas of insurance penetration among the underserved, MyCover.ai takes a collaborative approach and offers a suite of services that cover the entire spectrum of these challenges. We are confident in their vision and operational pedigree, and we are excited to support their growth as they continue to empower businesses and individuals through scalable and innovative insurance solutions,” Olowoporoku said.
The African insurance market is on an upward trajectory, with a size that soared to $81.6 billion in 2022. The market size is projected to rise to $123.8 billion by 2028, exhibiting a CAGR of 7.19 percent between 2022 – 2028.
Traditional insurers have, however, struggled to extend their services to the vast population, with insurance penetration remaining below par. However, with the growth of a young population, the rise of technology, including widespread smartphone adoption and affordable internet access, coupled with global opportunities and the exponential growth of fintech solutions, MyCover.ai emerges as a catalyst for change.