Nigeria’s Curacel raises funds to strengthen insurance offerings and expand into North Africa • TechCrunch

Up to 2.8% of Africans are uninsured, which is less than half the global average of 6.3%, making it the least insured continent in the world. Despite the abysmal number, there is good news. According to a McKinsey report, most African countries have experienced double-digit insurance growth at CAGR in local currency over the last five years, thus positioning the region as the second fastest growing country for insurance globally after Latin America.

The booming market is indicative that insurtechs are actively providing various solutions to businesses and end consumers, helping them to manage purchasing risks, from buying cars to accessing accommodation.

In the latest development, Curacel, a Nigeria-based platform aimed at driving insurance penetration in emerging markets through APIs, allowing insurers to connect with digital distribution channels and manage their claims, raised $3 million in seed funding. Founded by Henry Mascot and John Dada in 2019, Curacel is building the “rails to make insurance work for the next billion Africans and empower businesses everywhere with the technology to embed insurance for their users.”

Initially, Curacel was intended to be an electronic health information management platform for healthcare professionals, allowing clinics to digitize and manage paper records, consultations, patient communications, billing and reporting through a web application. But soon the co-founders noticed a much bigger problem in healthcare, particularly with regard to insurance.

While insurance penetration is very low in Africa, many insurers’ processes are time-consuming, expensive and prone to fraud and waste because they use paper and outdated technology. As a result, African insurers lose billions annually on fraudulent, wasteful and abusive (FWA) claims, making them cautious and risk-averse when dealing with customers. The pivot meant that Curacel’s new business focused on providing technology to help insurers mitigate losses while digitizing and settling more legitimate claims, with only the human intervention required for quality control.

“At the end of 2019, we started to solve a problem for health insurers regarding the infrastructure for digitizing claims. And our main thought when we started doing this was that insurers across the continent were losing about 20% of their premiums to fraud, waste and abuse. Something needed to be done to reduce fraud so that insurers could reinvest in creating cheaper end-consumer products,” Mascot said in an interview with TechCrunch.

The YC-backed startup is doing for insurtech what Flutterwave, Stitch and Anchor did for payments and banking with its various APIs. The three-year-old company is rolling out insurance products to multiple companies to increase inclusion and adoption on the continent. So far, its technology caters to claims distribution and automation.

The distribution business is essentially the Grow integrated insurance product. It is used by more than 100 companies, including banks, fintechs, logistics and e-commerce platforms in eight African markets: Nigeria, Ghana, Kenya, Uganda, Tanzania, Rwanda, Morocco and Egypt. Some of these clients that Curacel says increase their recurring revenues with its digital insurance products include ALAT, Providus, PalmPay and Float.

The Curace team

On the other hand, claims automation is aimed exclusively at insurers, who use the platform to improve the efficiency and accuracy of their claims processes; Curacel currently has 20 of them as partners, including AXA Mansard, Old Mutual and Jubilee Insurance. Curacel says its “AI-powered” infrastructure means claims can be submitted and processed in real time, helping insurers reduce their claims cycle by more than 70% and process up to 10 times more claims.

The Nigerian insurtech, which works with more than 5,000 service providers across its eight markets, claims to have processed more than $100 million in claims since inception. Last year, Curacel increased its transaction volume by 600% and increased its revenue by 500%, it said in a statement. The company’s revenue comes from charging an annual fee for processing claims and detecting fraud. It also sets premium rates and charges companies for using its APIs.

While currently working around claims and distribution, Mascot said Curacel would be looking to provide insurance underwriting and payment services through its APIs. Diversifying its products is a way to stay ahead of the competition, which is becoming increasingly fierce in Africa’s insurtech landscapes. Companies such as Lami, backed by Harlem Capital, and Naked, backed by Naspers, provide similar services to increase insurance penetration in their respective markets.

“We have complaints and distribution, which are our preferred products. In the future, we want to handle subscriptions, payments, and so on. We want to build that platform that, in the future, allows insurers to run some of their business or run all of their business across our ecosystem,” noted CEO Mascot in Curacel’s product roadmap.

On the conference call, Mascot mentioned several times that insurtech was built to serve businesses in emerging markets, not just Africa. The chief executive hopes that the recent rollout of Curacel’s service in North Africa via Egypt and Morocco will act as a precursor to doing the same for companies outside Africa. For now, however, the company will use the investment to deepen its presence across the continent.

Investors in the initial round include Tencent, Blue Point Capital Partners, Pioneer Fund, Olive Tree Capital, Y Combinator and AAF Management and Elefund (investors in New York-based insurtech Sure; the latter also backed Pie Insurance).

“Africa remains a relatively untapped market when it comes to insurance and technology presents the best opportunity to reach new users and offer excellent services,” commented Serik Kaldykulov, general partner of Elefund, in the round. “Curacel has built a suite of solutions and an impressive track record of success that makes us very excited to support them in their mission to use technology to drive insurance inclusion in Africa.”

Fitbit CEO James Park, Flutterwave CEO Olugbenga Agboola and Kuda CEO Babs Ogundeyi were some of the individual investors in the initial round. Curacel says that some executives from Covergenius, Zopper and Pie Insurance will join its advisory board as part of the round.

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