Anchoring insurance new normal in Kenya

BY KEVIN MOTAROKI

We live in an age of change. Traditional insurance business models are being replaced by new thinking, new competition, new ways of delivering results and new challenges. Insurers are under pressure to adopt change at a time when waves of wholesale and specific global trends promise increasingly complex risks and consumer demand for effective ways to provide resilience in these uncertain times. Disruption, in insurance, calls for leaders to rise to the occasion, to grasp the upside of this interruption and create products that can adapt to these emerging needs. The Nairobi Business Monthly spoke to Jihan Abass, the founder and CEO of Griffin Insurance and Lami (colloquially, a path for digital insurance products to travel), the technology on which the motor insurance app rides, about opportunities in the industry for the future.

The history of insurance products is an account of human ambition and growth. The earliest policies, dating as far back as the13th Century, covered losses by ship merchants going through foreign lands, enabling them to share the risk of trade. Motor vehicle insurance came a couple of centuries later, in the early 1900s. Life insurance, accident, and health insurance, and now everything from business interruption insurance to cyber insurance, to covers for pocket gadgets, reflect innovations developed by insurers to allow consumers to take risks for growth, and for individuals or families to survive in the face of unexpected eventualities. The secondary result of such innovation has been life-improving novelty in other sectors, including manufacturing, travel, tourism and so forth.

The ninety-year old history of motor vehicle insurance, starting off in the 1930s, has been one of obscurity and jargon, punctuated by bouts of sporadic advances. But while innovation may be among the most desired of corporate goals, it may well be the least understood too.

Whereas most corporate executives recognise the value of innovation, few bother to put in pioneering work, opting instead to ride on the work of the brave few who venture into the unknown. Fewer still really understand the process of implementing innovation in a business model, to successfully integrate it into their systems – which is why such hesitation is not much a failure as it is a recognition of the reality of corporate bottom lines. 

Yet, for some others, innovation is what defines their entrepreneurial personas – because they have to compete for new digital-native customers. This calls for disrupting the status quo, with new digital products and businesses that reinvent conventional insurance models. For those who can leverage it, digitisation, which offers methods of delivering the same product in new ways both serves to win over customers and create
new revenue streams.

So far, digital has been the missing link. By combining the possibilities that the digital age offers with the desire to innovate, insurers can deliver great products, including in areas previously deemed un-insurance-like.

The first things you notice when you enter Jihan’s office, situated on the fourth floor of Rhapta Heights are the scribblings on the glass partitions. 

“Someone is always writing down an idea, whether standalone or as an add-on to another,” she says. It is a practice she encourages because the idea of officialdom is how great ideas become lost in that elaborate conveyance belt.

She prefers and wears her informality with purpose; one, which, when you listen to her, you find, is almost synonymous with her desire to innovate, to stay ahead of the curve. The aura around her is what you could describe as an authentic informality. At 26, she is neither bothered by trifles nor given to elaborate preliminaries. We sat down for an on-the-ball chat on her promising start-up.

What does the insurance space look like from where you sit?

The insurance industry has not changed much in the last fifty years or so. With the Griffin motor insurance app, we are trying to take insurance to the new age, with the objective and promise to offer an experience people of my generation can resonate with.

What do people of your generation want with insurance?

Speed, that’s for sure. We don’t want to fill forms or call people. These are all unnecessary hurdles, especially when I am giving you money for a service. With the car insurance app, we have slimmed down the process of obtaining insurance to less than two minutes – you get a quote and purchase a policy within that time. We offer real-time underwriting, which doesn’t happen anywhere else in the country.

Two minutes is fast…

Relatively speaking, it is. Within that time you can transact your business, you can file a claim, you can pause your cover, and you can downgrade or upgrade your policy. Within that time, you can also call for help if you need emergency rescue. We have on board the largest network of emergency service providers. If you are in an accident or in need of roadside help, you press a button and help will come to where you are within 15 minutes – whether that is an ambulance or tow truck.

What was your motivation when you started out?

The question that brought it all together was, how can we offer more value than just an insurance sticker? How can we add more? We realised we needed to reduce the time taken to purchase insurance. How we do it is to give you the policy and do our due diligence afterwards. If you purchase a Third Party policy, we issue and send it immediately we receive payment – as an electronic sticker. For comprehensive policies, we have a separate system for valuation. After we issue you with a policy, we send a valuer to you within 24 hours – that is our promise – or at a time of your choosing beyond the 24 hours.

What else sets you apart?

The problem we are trying to solve is insurance penetration and uptake. Many Africans rely on a single source for their upkeep, but they are not given to protecting it, mostly because the cost of doing that is too high. We set out to change that by making insurance, and the process of getting it, as affordable and straightforward as possible. Insurance should not be a luxury; everyone should be able to protect their assets. Thinking around the idea of people protecting themselves is important.

You studied Finance and Business Administration at Cass Business School in the UK, one of the most illustrious business schools in Europe. Why insurance?

I was out for dinner once and got to talking with my waiter for the evening, who told me she didn’t have insurance. It was then that it struck me; with digital insurance, even she could afford to pay for her own health cover. And what a revolution that would be! 

That I don’t have a background in insurance could be my biggest asset; it was easy for me to resonate with the conversation we were having. Having no background in the industry also worked for me in the sense that it is difficult for people who have been in the industry for long to innovate around insurance, to create new products. With no preconceived notions about the trade, I can better appreciate what a consumer wants. So for me, it was about a problem that came so vividly before me, in a manner or process that is not stifled by systems and procedures. 

I started with car insurance because, as a start-up, I needed a place to begin – every motorist needs insurance so this was an easy pick. But, with time, I hope to be able to go back to my waiter friend and say, “hey, I have just the product for you.”

What was your initial investment?

I have put in upwards of$500, 000 (Sh50 million).

Have you broken even?

Not yet. I hope to do so in the next year or so.

How is the uptake so far?

We have thousands of downloads, which have translated into a lot of purchases as well. On average we do more than a few sales every day.

Traditionally, insurance is cyclical; it has been sold annually. Our flexibility – you can purchase a cover for a month, a couple of months or a year, depending on the product – has worked for us. We cater for the moneyed and unmoneyed alike. For instance, we are not going to lock out an Uber bodaboda who wants to purchase but cannot afford a monthly premium. We understand that not everyone is able to pay in lump sum.

The industry has not changed much in the last fifty or so years. We are trying to take it to the new age, with the objective and promise to offer an experience people of my generation can resonate with.

Jihan Abass

What is the fastest claim you have ever paid?

15 minutes. There was a claim, a genuine one, the client provided us with all the information we needed, there was no reason to hold or reject it so we paid it immediately.

How many claims have you paid out so far?

We have paid three out of four lodged. The fastest was settled in 15 minutes. In an industry where the average time for claim settlement is 60 days, we commit to take a week at the longest.

In your experience, how accommodating is our policy regime towards
start-ups?

I honestly think it is very unfriendly. In a country with unemployment levels as high as ours, people are not incentivised to leave their stable jobs to innovate. As a country, we need to offer better incentives to start-ups, including tax breaks and workable rebates. Kenya is a technological hub, and it is discouraging that we have not thought up proper incentives. The reason we have so many foreign start-ups is because foreign investors get better motivation than locals, to set up and operate. The policy regime favours them.

The regulator Insurance Regulatory Authority (IRA), on the other hand, has been quite receptive to our ideas on insurance, and is in fact a facilitator of innovation. Happily, IRA understands that the reason penetration is so low is because existing models are not appealing to many segments of the population, a situation exacerbated by a lack of trust between consumers and providers.

Speaking of innovation, what does it mean to you – to innovate?

It is about transformation. And real transformation is about using technology in inventive ways to achieve true customer focus across entire organisation processes. The simplest expressions of efficiency and speed (in settling claims) are what the client has a right to expect. Innovation doesn’t have to be technology, if tech is not an aid. It is about having the presence of mind to know what
works a given time.

What, in your view, is the best thing about Griffin?

We get a lot of positive feedback on our customer service; there is a lot of praise for the customer experience we offer.

What is your idea of an elegant customer experience?

Speed, which translates into efficiency. I hope that I can further cut the time taken to obtain a product from our app from 2 minutes to, say, 40 seconds. I also want to be able to pay out claims immediately.

Is that realistic?

Yes. With AI, which is our next frontier, and which is the platform we are now working on, it is definitely possible.

So, pausing insurance… Doesn’t that work against me – in case something happens to my car while the policy is paused?

When you pause a comprehensive policy cover it reverts to Third Party, so you are still covered for fire and theft, until you can return and reactivate your initial policy.

What is the one thing that gives digital insurance an edge over conventional models?

Speed, easily. Speed is good, even in countering fraud. Think about it: the reason there is insurance fraud in insurance is because of the time taken – to process, to assess, to compile a report… That lapse is what gives room for fraud. For us, if you have an accident, the emergency services will immediately come to you, collect available info, including photos, and post that info to us. There is not a lot of room to falsify information. 

Secondly are the partnerships we have with other players in the insurance space, including garages, underwriters and dealers. In this business, business relationships and partnerships mean everything.

How do you look to external actors, like Uber or amazon, for inspiration?

The standards become that much higher for us. We have to be more efficient, to constantly innovate. The one difference between them and us is that we are here, we understand the market, we are in the best position to fix the issues we encounter, as we understand them. So, even if amazon decided to set up a product here, we’d have the upper hand; the question is how we deal with it. I think that the idea of such lofty competition keeps us on our toes, which is good.

What are you working on now?

There is a lot more to do to cater for the 90% who are un-insured. For the moment, I want to focus on taking Griffin off the ground.

What are you struggling with now?

Raising funds. It is extremely difficult to fundraise in Kenya, there are too many hurdles. Brand awareness is another. People don’t know that they can trust what we are selling using the model we have; happily, we dismantle that wall every day. 

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