Safaricom in November last year announced it had acquired an insurance license from the insurance regulator Insurance Regulatory Authority after a four year wait.
This development marked Safaricom’s entry and expansion into a new market segment riddled with inefficiencies with the potential to disrupt the sector for good.
Today, the firm announced its looking into getting into under $1 micro-insurance products for public service vehicle passengers who use Kenya’s popular 14 to 33-seater vans dubbed Matatus.
Speaking at the Connected Africa Summit in Diani, Kwale County, Victor Odada, Head of M-PESA Payments at Safaricom said, “M PESA now is not just about payments. It’s a full ecosystem play. We’re not just doing payments now. We’re looking at now bringing in insurance. Insurance in everything you do. It is an embedded insurance in everything you do.”
From money transfers and merchant payments and wealth, Safaricom is making a major foray into insurance, especially micro-insurance.
According to a UN report, the insurance industry in Kenya is characterized by a low penetration rate and numerous providers, with 58 licensed insurance and 5 reinsurance firms. However, penetration rates are still low at 2.3% significantly below the global average of 7.2%.
“When I look at the insurance, it should, it’s something you get as you want. Sometimes you need it for that simple trip from Nairobi to Mombasa, you can buy insurance on the fly,” said Odada. “Get it for a hundred shillings ($0.82), or less. Once you land, you know you are covered for bags, and so on and so forth. Be it on the bus.”
Safaricom said it’s looking at empowering customers to be able to make right decisions and spend wisely.
“Where we’re headed is about accessibility, empowerment, digital literacy and catering for all segments. We are powering the nation, but at the same same time, we need to empower the nation. So it’s one thing to power the nation, is another to empower the nation.