When it comes to buying insurance in Kenya, the consumers have often been left at the mercy of brokers in striking good deals.
As a result, the brokers who are always economical with the truth, choose products that boost their business at the expense of the buyers.
Consequently for far too long, Kenya has been grappling with a low insurance uptake.
It is in the backdrop of this scenario that InsureAfrika, a portal with data on pricing, terms and conditions, allows customers to buy insurance after comparing offers from different companies.
InsureAfrika boss Gagandeep Hayer, 33, aims to give customers a choice and bring the convenience of access to a variety of insurance products.
A report by the Insurance Regulatory Authority (IRA) in 2013 singled out both lack of awareness for customers and lack of data for the insurers among the factors contributing to low appetite for cover in Kenya.
Driven by the commission they earn, the insurance brokers — a crucial go-between for the 46 insurers in Kenya — have perfected the art of selling only what they deem profitable.
At InsureAfrika, however, the tables are turning. Potential insurance buyers become their own brokers and consider offers from different underwriters.
Mr Gagandeep says he came up with the idea after learning from the best when he bought a car insurance through a broker last year.
“I noticed most of the transactions I did ended at the broker including the cheque I wrote. When my policy document came barely a month before the cover expired, I confirmed my doubts as to how direct the deal was linked to the insurer. I was not even sure whether I had been covered all that while,” he told Money.
At InsureAfrika, a customer fills an online form which enables the company staff to get in touch with them, link them with the insurer of choice and help close the deal.
At the moment, customers can buy car, health and travel insurance with each category asking for specific data.
Once filled, quotations from various insurers pop out giving the customer a chance to choose. On picking one, the customer gets a call informing one of the receipt before being allowed to seek further clarification.
A toll free line has been established for customers. A fully fledged call centre is also up and running.
The company has two revenue models; one for underwriters who pay a fixed amount for each lead (depending on type of cover) and second for those who pay a commission from the value of the premium from the leads that convert into a sale.
As at last week, the firm had recorded over Sh52 million worth of insurance by the 1,092 leads forwarded since its launch in April.
Since car insurance is compulsory in Kenya, the product tops the list of most enquiries followed by health and travel.
The entrepreneur, who worked in the US for a digital media firm, says the data they gather even from those whose sales are not closed, is crucial for filling the wide information gap in the industry.
“We are just opening the sales funnel for insurers wider so that they get qualified leads and easily convert them to sales since by the time a customer even fills our online form, they have almost made up their mind to buy,” he said.
InsureAfrika is also creating awareness, solving the problems of muted reporting by brokers as well as limited use of technology in the multi-billion shillings industry.
The company has since entered into agreement with 15 out of the 46 insurance firms in Kenya. More companies are already considering the business proposal.
Last week, InsureAfrika held a forum with the insurance regulator after the watchdog developed interest in the business model.
InsureAfrika allows the underwriters to provide the latest data on their offers.
“We’ve received over Sh25 million worth of requests for car insurance quotes and close to Sh10 million worth of requests for health insurance. We have had travel insurance service seekers, who visit our site late in the night. We are making insurance accessible 24-hours-a-day and the potential is huge,” he added.
The company is banking on Kenya’s rapid Internet uptake with over 26 million people accessing the Internet at the moment to boost access to insurance information and services.
Last month, Google released a consumer survey which shows a growing trend in Kenyans’ online shopping culture with 42 per cent seeking to find the cost of various products.
Asked whether he is pushing the brokers who have dominated the sector out of business, Mr Hayer smiles, noting that there is more than the sale.
“We are creating an online bridge between consumers and insurance providers and there are a lot advantages here including the freedom to compare products and choose independently. This is the transparency customers have been waiting for in this sector,” he told Money.