Mycover.ai the insurtech startup building Africa’s digital insurance infrastructure, has announced the close of a $1.25 million pre-seed funding round, today, led by Ventures Platform. The round included 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. MyCover.ai will use this capital injection to bolster its in-house operations and tech talent, invest heavily in its proprietary technology and strategically expand its operations into other African markets.
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. The company addresses these problems by leveraging technology to transform key touchpoints in the insurance value-chain: underwriting and product development, distribution and insurance claims.
MyCover.ai provides an open insurance API that integrates with leading insurance companies and allows other businesses and innovators to seamlessly embed these insurance products into their platforms. They differentiate themselves by the breadth of partnerships with leading insurance companies, such as Hygeia, Leadyway, Sovereign Trust, AIICO and Allianz to name a few and their low code option for businesses who seek to embed insurance products into their offerings.
The insurtech company’s mission is to provide financial security to Africans by improving access to insurance products. In Africa, insurance is a way of providing savings to the most vulnerable; 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% of Nigeria’s population is insured. The majority of the population have 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. In the wider African market, over half of the countries in the continent have insurance penetration rates below 2%. 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%. MyCover.ai’s unique suite of products have been developed to close this gap and solve the previously insurmountable problem of insurance adoption in Nigeria and the rest of Africa.
Since its launch, MyCover.ai has quickly established itself as the clear market leader for innovative insurance solutions, with over $1M in gross written premiums, strong partnerships with leading insurance providers and the launch of multiple innovative insurance products to the market.
MyCover.ai’s powerful API integration facilitates seamless collaboration with external partners, empowering businesses from various sectors to effortlessly integrate insurance into their products and services, with the inclusion of a white label option, without incurring any additional risks or costs. These businesses are presented with the opportunity to offer insurance policies as add-ons on top of their existing core products.
MyCover.ai’s extensive range of products have been used by businesses across various sectors and verticals such as logistics and mobility/ride hailing, ecommerce, BNPL platforms, fintechs and more. For instance, a third party Logistics company can offer on-demand Goods In Transit Coverage for goods moved on its fleet, as well as provide health insurance and personal accident cover to its riders. All claims and insurance processes can be conveniently managed in a smooth and timely manner on its platform.
Adding to MyCover.ai’s all-encompassing range of services and support, is MyCoverGenius, the first and only B2B platform in Nigeria which offers the opportunity for clients to directly purchase insurance products from the company. This novel platform addresses a common oversight by legacy insurance companies that often overlook the entrepreneurs and SMEs present in the Total Addressable Market. With MyCoverGenius, business owners are able to conveniently and effectively cover their staff and assets, scaling up or down in relation to the growth in business operations. The company also provides low code tools for offline stores as well as its proprietary Software Developer Kit (SDK), where partners can easily distribute insurance products and elevate customer experiences with little or no tech burden on their business.
Commenting on the raise, MyCover.ai’s CEO and co-founder Adebowale Banjo 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 in accelerating the attainment of our objectives.”
MyCoverAi co-founder 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”.
The Africa insurance market size is on an upward trajectory with a size that soared to $81.6B in 2022. The Size of the market is projected to rise to $123.8B by 2028, exhibiting a CAGR of 7.19% from 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.