In developed countries and markets, the insurance market has in the past few years grown exponentially, driven largely by the largest number of insurtech companies.
The industry has been under massive pressure to transform resulting in insurtech which are technology-led companies that enter the sector, taking advantage of new technologies to provide coverage to a more digitally savvy clientele.
Elsewhere, the insurance sector continues to attract more and more investments in technology and its expansion does not stop. The same can however not be said about the sector in Botswana.
As it stands, the country only has two insurtech that originate from outside the country but have opened shop locally. This is despite the trend in which many industries and countries are moving towards digital business.
The slow pace uptake on technology in the insurance sector in Botswana has been directly linked to regulation. It has since emerged that Insurtech fall outside the country’s regulations thus remain unregulated as they do not have a category of what they can or cannot do.
The Centre for Financial Regulation and Inclusion (CENFRI)’s Kate Rinehart says the Value proposition of insurtech is solving old age insurance challenges that traditional providers face.
“With increased technology, data analytics you can get better knowledge on customers, increased access to customers and it is easier to design products to meet consumer needs”, said Rinehart
CENFRI is an independent, not for profit think tank based in Capetown with recognised thought leaders on matters relating financial sector development in emerging markets.
On the importance of digitisation in insurance companies, Rinehart says, “Insurtech help make things more efficient and save costs. Digital platforms digitize the economic activity of connecting buyers and seller of goods using existing payment methods and data.”
Rinehar says another advantage of Insurtech is that they are bringing people who operated in the informal sector to the formal sector which great potential for growth of the sector,” Rinehart continued.
Botswana has more insurance providers in market than ever before, with 8 in life insurance and even more in non-life provisions.
From 2017 to 2018, the life sector grew by 11 percent in terms of Gross Written Premiums and held 74 percent of the insurance market share. The whole insurance sector’s gross written premiums have been contributing around 3 percent to GDP over the past several years.