In an impressive feat, Turaco, the African insure-tech company committed to providing affordable insurance solutions, has announced that it has surpassed a significant milestone of insuring over 1,000,000 lives four years after it was founded in 2019. With a $10 million Series A funding secured in September 2022, Turaco has leveraged this investment to achieve rapid growth. Operating in Nigeria, Kenya, and Uganda, Turaco has successfully offered a much-needed safety net against financial shocks to mass market consumers.
This remarkable achievement includes 350,000 new customers who joined Turaco’s insurance program within the last three months. This surge in customer uptake can be attributed to the company’s recent partnership with Airtel Money Uganda and Prudential Uganda. The overwhelming response underscores the demand for Turaco’s innovative and customer-centric products and approach. The Airtel Hospital Sente product, designed to be user-friendly and accessible, offers a simple two-step USSD sign-up process and ensures an average turnaround time of 15 hours for claims processing and payment.
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To understand the significance of Turaco’s milestone, one must consider the alarming statistics in Africa. Every year, an estimated 89 million Africans face catastrophic health events, often spending up to 10% of their income on a single incident. Shockingly, these health emergencies push 14 million Africans into poverty annually. One of the contributing factors is the lack of insurance coverage, as less than 2% of individuals in East and West Africa have access to insurance. Turaco is determined to bridge this gap by expanding access to affordable and straightforward insurance products.
Turaco’s key strategy lies in forming partnerships with leading tech-enabled companies, including M-KOPA, Paga, One Acre Fund, and Vision Fund. Through these collaborations, Turaco designs white-labeled insurance products, allowing customers to sign up and pay for insurance while purchasing other goods or services. This strategic approach has proven successful, as Turaco achieves a conversion rate of over 50% when selling insurance through these partnerships. By addressing price points and ensuring a frictionless and efficient distribution model, Turaco has created a value proposition that resonates with customers and meets their specific needs.
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Ted Pantone, the CEO and Co-Founder of Turaco, expressed his excitement about surpassing the 1 million customer mark, emphasizing the impact it has on individuals and communities. He said, “This number represents 1,000,000 individual mothers, fathers, children, and community members that have access to better healthcare and improved financial resiliency as a result of Turaco insurance. We are excited to continue on our path to 1 billion people insured.”
Turaco’s sustainable business strategy has facilitated its expansion, with operations now established in Uganda and Nigeria. The company is actively seeking further partnerships to accelerate the adoption of mass market insurance across Africa. The collaboration with pay-as-you-go firms like M-KOPA, ride-hailing platforms such as SafeBoda, fintech companies, and microfinance institutions allows Turaco to offer insurance bundled with their main products or services through API integration. Customers can secure life, asset, medical, and auto insurance for as little as $0.2.
Pantone emphasized the demand for insurance among Africans and the importance of designing and selling products with a focus on affordability and a seamless customer experience. He stated, “Demand is not the issue. People actually really want to buy insurance if it’s designed appropriately for them from a price point value proposition, and if it’s sold in a frictionless, efficient manner. So, most of our innovation is really around the distribution model. That’s really the key we are fixing to make it really easy for people to say yes, and then pay for insurance.”
In summary, here are the key strategies that enabled Turaco achieve this milestone:
- Strategic Partnerships: Turaco formed partnerships with influential tech-enabled companies, including Airtel Money Uganda, Prudential Uganda, M-KOPA, Paga, One Acre Fund, and Vision Fund. These collaborations enabled the design of white-labeled insurance products, allowing customers to easily sign up and pay for insurance while purchasing other products or services.
- Customer-Centric Approach: Turaco’s commitment to customer satisfaction is evident in its innovative and simplified processes. The two-step USSD sign-up process and the average 15-hour turnaround time for claims processing and payment have resonated well with customers, highlighting the company’s dedication to providing simple and user-friendly experiences.
- Addressing Urgent Needs: Turaco identified the pressing issue of catastrophic health events affecting 89 million Africans annually, leading to significant financial burdens and pushing 14 million individuals into poverty each year. By offering affordable and accessible insurance products, Turaco addresses these needs and empowers individuals with better healthcare and improved financial resilience.
- API Integration with Partners: Turaco leveraged API integration to collaborate closely with partners such as PayGo firms like M-KOPA, ride-hailing platforms like SafeBoda, fintech companies, and microfinance institutions. By bundling insurance with their primary goods or services, Turaco significantly expanded its reach and achieved a high conversion rate, as low as $0.2, for life, asset, medical, and auto insurance.
- Innovative Distribution Model: Recognizing the limited insurance penetration in Africa due to outdated procedures and excessive paperwork, Turaco revolutionized the distribution model. By employing disruptive technology and efficient sales processes, Turaco ensured a frictionless and efficient experience for customers, enabling a higher acceptance rate and driving demand for insurance products.
While insurance penetration in Africa remains below 3%, the emergence of insurtech companies like Turaco signifies a turning point for the industry. Traditional insurers have relied on outdated procedures that involve agents and extensive paperwork, limiting their reach and hindering product acceptance. However, disruptive technologies and innovative products introduced by insurtechs like Turaco are revolutionizing the market, promising a brighter future for insurance coverage in Africa.
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Charles Rapulu Udoh
Charles Rapulu Udoh is a Lagos-based lawyer, who has several years of experience working in Africa’s burgeoning tech startup industry. He has closed multi-million dollar deals bordering on venture capital, private equity, intellectual property (trademark, patent or design, etc.), mergers and acquisitions, in countries such as in the Delaware, New York, UK, Singapore, British Virgin Islands, South Africa, Nigeria etc. He’s also a corporate governance and cross-border data privacy and tax expert.
As an award-winning writer and researcher, he is passionate about telling the African startup story, and is one of the continent’s pioneers in this regard