As the world moves towards digital channels of communicating and doing things, the insurance industry is not left behind. We had a word with Jeremiah of CoverApp Kenya and this is what he had to say.
What’s your name and what’s your position at CoverApp?
My name is Jeremiah Siage and I’m one of the three co-founders of CoveApp. My specific responsibilities revolve around business development and I also oversee the technical team. I look after the digital financial services side of the business too.
Who are the other co-founders?
We are three co-founders, myself and two ladies.
Tell us more about CoverApp. How does it work? What are the advantages over traditional insurance?
CoverApp is an Insure-Tech platform which enables you to access insurance services from your mobile phone through a mobile app.. You can also access the platform on the web because we have a web app, which gives you the same experience without having to download the app. CoverApp enables you to find information about insurance products, to select the ones that you find suitable and to select the best option from a range of options that are availed to you in terms of products and pricing. It also enables you to choose your most suitable premium payment plan. We give all that flexibility to our customers, unlike the traditional methods.
Once you’ve made your informed choice CoverApp also enables you to make the premium payment right within the same platform. Whether you choose to make your premium payments monthly or annually you can do it with the same level of ease and comfort.
Once you’ve made your premium payment, it enables you to also receive confirmation of payment and get your insurance contract or policy document via email, all in under five minutes of your time.
How does it work?
You need to enroll on the platform after either downloading the app on your phone or accessing it on web. You put in your KYC details like name, address, phone number and email address. Once you’ve enrolled yourself, then you have created a profile or an account with us through which you can now look for, select and purchase insurance and other emergency products.
Why create an account? Because we want to improve your experience. If today you want to buy car insurance and you want to buy a home contents cover, you’ll probably go to a person who will give you a bunch of papers for car insurance to fill out, and a separate bunch for home insurance. You’re the same person with the same ID number but you’ll fill the forms and attach the ID copy (where required) twice.
We’re trying to save you this trouble. Once we have your details, we’ll pick them and populate the form so that you only need to put in any required information that you haven’t put in before. This makes the process a lot quicker and a lot more friendly.
We also help you manage some of these documents. Many insurance companies will never remember where they kept your documents. You give them a copy of your car logbook this year, you’ll get an insurance cover, and same time next year when you’re renewing the cover, they’ll ask you for a copy again. We try to save you that trouble so that once we’ve saved the documents in soft copy, they’re kept securely for controlled retrieval when they’re required again. When next you need something, you just pick the product and the form will be populated to the extent that the information is already available on your profile.
For example, if you need travel insurance: We have your profile already so all you have to put in is probably a destination, purpose of travel and dates of travel; get a quote, pay, and you’re done. That is how we improve the experience.
Our advantage over traditional insurance is basically all the above. Everything we’re doing is trying to improve the experience over the traditional. Instead of handling a bunch of papers every time, we keep your information securely and you only come to buy what you need.
The other thing is that we also have unique products that have been designed with the Kenyan consumer in mind. For instance, our home contents product has been designed by us. It is a lot easier to buy, and has been made relevant and suitable for the mass market.
Traditionally, the smallest sum assured that that some of the domestic policies would give you is about Kenya Shillings half a million, which also comes with proportionately high premiums. You have to prepare a catalogue of the items in your house and put a value to each one of them, submit the list to the insurance company and then they give you a quotation. You can then start the process of filling in the proposal form and get on with the rest of the process.
We’ve totally reworked that and now we give you a package which is based on pre-defined benefits. So, if you take a package that will pay you up to Ksh. 50,000/-, all we need is pictures of the things that you’re covering and you’re done. You don’t need to go and do a list and indicate the value of your items because we will tell you, if you lose your phone, for example, we’ll pay you based on the package you picked – say Ksh.10,000/-. We do not need to know what the value of the phone is. If you report the phone lost, we confirm that it is lost and you’ll be entitled to your reimbursement of Ksh.10,000/-. It doesn’t matter whether the phone was worth Ksh.5,000/- or Kshs.10,000/- at that point. You’ll get the 10,000/- with which you decide whether to buy a phone worth that amount or to top it up and buy a more expensive phone, or buy a cheaper phone and save the rest of the money.
What informed your decision to venture into app-based insurance?
Our decision was informed by years of observing what is happening in the insurance sector and years of experience from inside the insurance industry. We each had had a chance to work at and with various insurance companies in Kenya and internationally. We saw what was going on first-hand. We have taken an interest especially in inclusive insurance and some of the challenges that it has and continues to face, and decided to create an entirely different experience that is relevant to the current insurance consumer.
We felt that the industry had been left a few decades back by all the other financial services. Banking has evolved, remittances have transformed and e-Commerce is growing rapidly backed by electronic payment platforms. A lot of financial services were already available to the mass market digitally but to a large extent, insurance was not.
My partners, were already running AB Consultants – an insurance consultancy firm building capacity and offering training to insurance companies especially in inclusive insurance business strategies all over Africa. They invited me to a conference to give a talk on how technology could be used to improve the access to insurance products. As I prepared my material for the conference, I realized that there were a lot of things that could be done.
I believed in the idea so strongly that after the conference, I asked them, “you know what? all this is possible, all this can be done, but who is going to do it? Why don’t we be the ones to do it? Instead of talking about it why don’t we get into implementation?”
So, we agreed to set up CoverApp based on the realization that things could be done differently. We were convinced that going digital was the much needed solution in terms of accessing insurance information, product distribution, modes of payment, raising insurance claims, verifying the claims, monitoring the processes, managing clients’ documentation and in so many other insurance business processes. We just felt that a well thought out platform would be able to deliver all the needed business solutions, so we decided to build that platform. That’s how CoverApp came up.
Do you have a background in insurance? Or tech? Or both?
We all have a background in insurance. I worked in two different insurance companies in different capacities. My first experience from college was to sell health insurance for AAR and then later on after years of being in employment elsewhere I also did a consultancy assignment for two years at CIC Insurance Group, where I was rolling out their insurance distribution platform called M-Bima.
Anne has worked in the industry for a long time. She worked for CIC where she was heading the micro insurance business.
Barbra is an actuarial scientist who has also worked in various insurance companies both locally and in Canada.
As for Tech, yes. I have a background in managing digital financial services. I have managed technical platforms for companies that offer financial services such as mobile money. I’m also a consultant in that broad area of digital financial services and we support businesses that roll out platforms that offer various financial services. None that offers insurance services like CoverApp but for mobile money, agent banking, remittance platforms and agent network management.
All that is part of what I do. So yes, we have some background in tech. We’re not hardcore techies but we understand tech in providing business solutions and we work with techies all the time.
How old is CoverApp and how are Kenyans embracing it?
We started developing CoverApp sometime in 2017 so it took us time to get it working the way we wanted it to work considering it is a platform that we were developing to make a difference. So certain things were new and we had to code things the right way. We’ve gone through a few years of trying to refine it and to make sure that it is actually working as intended. We’ve been piloting as we develop and making some limited sales with our close direct contacts since 2018. But some time in 2019 we started communicating CoverApp around the end of November which is when I’d say we’ve been all out with the platform as we know it today.
In terms of reception in the market, Kenyans are happy with any solution that is relevant to them. We have seen some very happy and satisfied customers and we have seen a lot of people showing interest. We have seen Kenyans who know about insurance but they don’t quite make the decision to buy and we’re trying to make that easier. We want people to be able to make an informed decision but make it quickly and that is why we brought everything to their fingertips.
I’d say we’ve just started the journey to get into the mass market. It will take a bit of time, resources and effort but we know we’ll get there. The initial feedback that we’re getting from the customers we have is quite positive. People are appreciating the convenience that CoverApp gives them.
What do apps like CoverApp mean for the traditional insurance salesman/woman?
Interesting question. Allow me to answer that in two parts.
The first part is that we deliver the same service that they deliver but in a much more convenient way that empowers the customer to make their own decision. So in one way I’d say that we improve what they’re doing.
Some of them may view it as a threat to their livelihood but this is change. Change has happened everywhere. Banking is different and some insurance companies are also introducing their own mobile apps, so the way people do insurance is changing. That’s a fact. We’re just leading the way.
The other way in which I want to answer that question is that we have a module which we’re about to roll out, which is the agency module. This will enable them to still sell insurance products, but instead of using forms, they’ll be using the app to get all the details from a customer and submit. We’ll still be able to have them using CoverApp and earn commissions. They’re not necessarily being kicked out of a job, but we’re creating a platform that will enable them to work with us and sell the products that we have on the platform, only that this time it will be a lot easier, a lot simpler and paperless. They can therefore continue doing what they’re doing with the help of our platform.
Insurance uptake in the country is and has mostly been dismal. Is the availability of digital products increasing uptake in general?
I’d say it will. It may not be evident now or in the short run, but we believe that in the long run this will happen. We will have more people feeling more comfortable with the whole idea of insurance. We are also expecting that some of the people who have already consumed insurance products will find it easier to remain in the insurance companies’ books because the products are easier to access.
Today a lot of people don’t buy insurance, not because they can’t afford it, but because the process of accessing it is cumbersome. Some of them may even have taken insurance but fall off after a short time because the renewal process is long and tedious. So, they’re out of cover and they may never come back. We want to make it easy to pay up so that you can renew your policy from wherever you are without stopping what you’re doing.
The same way we’re sending money from our bedrooms and doing our banking from home or our offices, we want insurance to be accessed and consumed that way.
At the moment, and for motor insurance especially, clients still have to have a sticker delivered to them. Will there be a point where everything will be 100% paperless?
We’re getting there very fast. The Insurance Regulatory Authority has already allowed digital certificates to be sent to customers and I can confirm that. I got my car insurance renewed last month and my insurance underwriter just emailed my digital insurance certificate to me. I was then able to print it and stick it on my windscreen. We still have to display it because the law requires it to be displayed but the company does not need to print and deliver a physical copy to you.
The other thing that has helped is that the digital certificate and indeed any motor insurance certificate that we have in Kenya now can be verified through the Association of Kenya Insurers (AKI) VIC Verification App. If you have a sticker on your car and you have that app, you can scan it and it will show you the car’s insurance details. It will even show you your underwriter. The industry has developed a national database of motor covers.
We’re moving into digital solutions and on this, I would want to commend the authorities in Kenya for enabling and facilitating. We’re very confident that sooner or later the laws will also change and maybe the need to actually stick the motor insurance certificate on the windshield will be removed. What will probably be important is just to check the registration of a car and the details of that car will pop, including whether its insurance is valid or not. I don’t think we’re too far from there and that will be a very big step in the right direction. But for now, you have to put up the certificate for verification.
What are your plans for expansion of products? Do you plan to venture into medical for example?
We have a long list of products that we want to bring on board and the rate at which we bring them on board will depend on how simple the product can be made. How much can we simplify it for customers to be able to make an informed decision on an app? Our plans include products that may touch all classes of insurance but we will have to simplify them to a level where it is possible for you to make an informed decision before you buy on-the-go
There are some products that may be too complex for that kind of purchase decision making.. For example, most of life insurance products may require much more explanation than people can absorb through an app. They’re long term and there will be a lot of details that need to be understood. We don’t believe in having people buy when they don’t fully understand what they’re signing up for. That’s why we’ve been treading very cautiously to make sure that we’re doing it right.
Medical insurance will be a little challenging unless we get a really simple medical product because sometimes to get medical insurance you require to go for a medical examination and you may need to declare a lot of things about your health. So, we can digitize a lot of that but we want to be sure that we give the underwriter all the information that they require, and still make the process simple and convenient for the customer. That’s why we started with products that can be consumed that way.
But I believe that as more digital products become available, we’ll pretty much be able to get everything on a platform like ours. We’re moving in that direction step by step.
How does digital insurance work with age old industry habits and laid down Government directives and regulations?
I’d say that Kenya is lucky to be what it is. To be honest I think everyone realizes the need for change. Yes, there are old habits in the industry and there are old ways of doing business that are pretty much set but the industry realizes that things have to change. We’re already seeing a lot of players trying to either develop their own digital solutions or trying to embrace third party digital solutions like ours.
It may take time and it may be faster in some organizations than others. Laws are likely to be modified to fit the digital space and we would encourage that because some of those laws were done a very long time ago – maybe three or four decades back. That would open up the industry.
I believe that that is probably the way our insurance penetration is going to move from the 3% level to 5% and probably 10% over the next few years. I think that in the next 10 years things will be very different and the next five years is what will build the critical mass for the big change that we expect to see in 10 years.
Any hindrances or/and incentives from Government?
I wouldn’t say there are any hindrances. There have been challenges but things are changing. We’re seeing the regulator and the industry association (AKI) being open to addressing some of the age-old challenges using digital platforms and embracing partners.
Indeed we have continental bodies like Africa Re who are actually encouraging non insurance players (non-insurance in terms of non-underwriters like ourselves) to work with the industry because they recognize that the industry might not have the capacity to do everything on their own. When they partner with insure-techs and other providers like us and others, then we can achieve the change that we want to see.
We think that there is a lot of goodwill in the industry. There might be limitations of capacity but the will is there and I wouldn’t say that the hindrances are anything big. Whatever is there that we’re struggling with today is probably short lived and will be surmounted sooner or later.
I haven’t seen any real incentives as such from Government but then again the insurance industry is an industry whose business is driven by incentives. For a lot of insurance companies in Kenya, the main channels that they use to get their business are sales agents, agencies and brokers. These intermediaries are driven by the commissions they earn. The industry knows that they need to put in incentives to get the business. If they find a channel that’s more efficient in helping them get more customers with less paper and more transparency in the information that they get, I believe they’ll put the right incentives in that direction so that they get the full benefits.
How are you looking at and dealing with competition?
First of all, who is competition? Insurance companies whether they’re offering digital solutions or not are not competition – they’re our partners. We’re a channel that they use so we really are not competing with insurance companies. We serve them.
Other players who may be offering digital solutions are welcome because this space is big. The more people we have helping the change toward digital the better because we’ll expand the view. We’ve got a huge field which no single player will manage all on their own.
We therefore welcome competition. We’d want them to come because that will help us drive innovation and keep us thinking on improving further. Together we can get the whole industry moving in one direction.
Of course we expect to get a significant share of the business, but we do not want to discourage competition as long as it is ethical competition based on innovation and with the customer in mind, I believe it will help the entire industry.
Our real competition is actually consumption – the things that people do with their money and then they forget about buying insurance. Where you put that 200 or 300 or 500 bob every month while you could actually get yourself a cover that will make you more resilient so that if you lose an item that you have in your house you can be compensated. That is what we really need to be addressing and that is why we’re educating the people on insurance products
We’re not telling the Kenyan consumer to stop doing the things that make him or her happy but we’re trying to make them realize that if they spend a little bit of money to make themselves more resilient, then they can survive the financial shocks better. That is why we spend a lot of time on education and training, and just trying to get people to understand that they don’t have to earn so much money to get insurance. And it doesn’t have to be forced down on you. The moment you appreciate that you need it and you see the benefits, and we make it easy for you to access it, we will have succeeded. That is really what we think we need to be doing in terms of competition.