How smart contracts and mobile technology are changing the insurance landscape in Africa

Insurance penetration in Africa is below the global average, experts say. Its rate is less than 3% against world averages of almost 8%. In the face of growing threats, Africa presents a case for innovation, but only if the challenges are met.

Affordability is a key factor that has kept many people away from insurance products. The premium payment and the slowness of the claims process have made many people skeptical about the benefits of insurance. However, experts now believe that these challenges can be overcome through the use of technology. Along with technology, the rise of microinsurance that enables the payment of small premiums is essential to unlock the capped insurance growth in Africa.

Research firm Brookings states in its analysis that: “The adoption and innovation of technology is the key to growth in the insurance sector in Africa. Microinsurance could also change the name of the game, as it can reach Africa’s growing middle class through small-scale, low-cost, low-risk products.

These microinsurance products can combine or be a product of telecommunications companies that have a wider audience spread across different economic groups.

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