Kenya-based startup, Lami Technologies has reportedly raised $1.8 million in seed funding. The insurance company is planning to direct these funds towards promoting their digital insurance platform and accelerating insurance uptake in Africa.
A seed-stage investor, Accion Venture Lab, which supports financial services focused on underserved markets, led the funding round.
Other investors in the round included Acuity Ventures, AAIC, P1 Ventures, The Continent Venture Partners, Consonance, and Future Africa, reports suggest. Lami CEO and founder, Jihan Abass established the company back in 2018 to democratize insurance solutions in Kenya.
Eastern Africa’s total gross written premiums (GWP) was $3.3 billion in 2018, while South Africa’s GWP was $48.3 billion in the same year, claim reliable sources.
Africa supposedly has a low insurance uptake because of conventional distribution of insurance policies that mainly relies on brick-and-mortar channels, which makes the processing cycle longer. As a result, this also affects the way customers pay premiums.
Thus, as selling directly to consumers is a tedious process, Lami reportedly opted for a B2B2C approach to leverage the trust garnered by platforms that consumers had already been using.
Through an API, the company apparently allows startups, banks, and organizations to offer digital insurance solutions to their customers. Lami’s platform can also be employed by partner businesses for their own insurance needs, reports suggest.
Abass reportedly said that the main problem that Lami set out to solve was the fact that 97% of the African population does not invest in insurance.
She claimed that Lami has brought down the claims processing period for an average African insurer from 90 days to one week, which has fortified consumer trust in the three-year-old insurance company.
She added that the company had been trying to decipher the reason for the low insurance uptake in the region, especially reflected in the 2.4% penetration level in Kenya, which houses over 50 insurance firms.
Lami boasts of a diverse consumer base with companies like Stanbic Bank and HR platform WorkPay that use its API for their insurance operations. Reportedly, an insurance platform launch on Jumia, an e-commerce platform, is also on the cards for Lami in the future.