Embedded Insurance for Fintech Startups in Nigeria
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Embedded Insurance for Fintech Startups in Nigeria

For about 10 years Fintech was the poster child for the African startup ecosystem, especially in Nigeria. However, Fintech's supreme reign has been declining lately as the sector now needs urgent innovation to thrive. Enters embedded insurance for Fintech startups in Nigeria.

A little backstory... 

According to EFInA Access 2 Finance 2021 report, only 27% of Nigerians are financially healthy, 39% are financially coping while 34% are financially vulnerable. In the same year, the Nigerian Fintech sector handled close to $700 million in digital transactions.

Fintechs' rapid growth has been banking on providing affordable financial services and products that give Nigerians easy access to finance, credit, insurance, pension, etc. Between 2021 and now, what has changed? Is over-saturation responsible for slow growth?

Embedded Insurance for Fintechs in Nigeria

No, far from it.

Many socio-economic factors like the crypto crash, government's monetary policies, acute inflation, neck-breaking competition within a growing niche, are responsible for the slow-down of the growth of Fintech in Nigeria, by extension Africa.

Lest we forget… Fintech offers more than just payments to Nigerians. 

It provides access to  insurance, credit and pension. Insurance and credit in particular have shown a lot of potential, and as such both are posing as the possible cure for Fintech's ailment if sufficiently explored through embedded insurance. 

We'll unwrap how embedded insurance can help Fintechs in Nigeria drive user and revenue growth in a bit.

Most Common Fintech Products & Services in Nigeria

1. Digital Payments: specializes in online and offline payments that let people send money to others through wallet accounts, without passing through brick-and-mortar banks. Eg: Paystack, Paga, Opay, Moniepoint, etc.

2. Cross-border Payments: facilitates faster and cheaper international money transfers from one country to another without currency exchange or securing FX. Eg: PayDay, Flutterwave, Chipper Cash, Geegpay, etc.

3. Credit: simplifies the way people borrow money by offering low-interest, no collateral, quick and instant loans to customers, especially those who can't access banks. Eg: Fairmoney, Kuda, RenMoney, Aella Credit, etc.

4 Personal Finance: offers affordable savings, investment, budgeting, trading as well as financial advisory that is quite more affordable than investment bankers and asset managers' portfolio management services. Eg: Bamboo, PiggyVest, Carbon, Palmpay, etc.

5. Buy Now Pay Later: these are pseudo-Fintech (embedded Finance) startups that allow customers to acquire products and services while paying in installments from partner vendors over an agreed period of time at minimal interest rates. Eg: Spleet, Small Small, etc.

Embedded Insurance for Fintechs in Nigeria

Innovate or Die, Way Forward for Nigerian Fintechs?

Remember how some of these Fintech products exploded during Covid-19 lockdown? 

While 2020 was checkered with monumental crises for the most part of the world, the same period turned out to bring rapid growth for digital payments, cross-border payments, remittances and lending businesses, as people were stuck in the same place for a long time but could instantly send their monies on errand. 

This immobility and the need to survive in isolation created more demands for Fintech products and services than supply. New Fintechs launched, more banks and businesses introduced credit products for people to adjust to their new realities.

That surge in demand is slowly dying down now that people move freely around. As if that was not enough, commercial banks and Telecoms who ought to be partners in propagating the growth of Fintech have become fierce competitors by replicating solutions they could have partnered with.

For these reasons and more, Fintech startups in Nigeria are in search of a magic wand.

Fortunately, embedded insurance is here to help. Across the globe, embedding insurance in Fintech products have boosted account usage for 60% of users which has led to increased sales and revenue. 

How fast Nigerian Fintechs can adopt embedded insurance will determine how well they can improve brand trust, loyalty and retention among their fleeting customers who roam from one new app offering goodies to another one taking zero charges.

Embedded Insurance for Fintech Case Study

Oze, is an all-in-one business app catering to startups and small businesses in Ghana and Nigeria. It needed to drive efficient and cost-effective acquisition of credit life insurance on their platform in order to reduce default rate and non-performing loans to the barest minimum.

How Embedded Insurance Helped Oze Drive growth?

With Curacel Grow's AI-powered embedded insurance infrastructure, Oze has been able to get Credit Life insurance for loan applicants in a fraction of the time it takes to negotiate with multiple insurance underwriters across Africa on their own. 

Curacel Grow's partnership has led to significant improvements in Oze's insurance procurement process, saving time and manpower typically spent on acquiring insurance. Read more on how Curacel Partners with Oze for Streamlined and Affordable Credit Life Loan Coverage.

Benefits of Embedded Insurance to Fintechs

  • Tailored insurance products boost transaction volume and value
  • It reduces concerns over product quality and service delivery
  • Warranty from insurance strengthens retention and conversion
  • Digital insurance grows brand loyalty and advocacy

Embedded Insurance Services for Fintechs

Some embedded insurance offerings Fintechs can embed include but not limited to:

  • Job Loss Insurance
  • Asset Cover
  • Gadget Insurance

Contact our team today and let's help your Fintech products and services stand out in the market. Get started now.

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