South Africa’s insurance and tech startup Nobuntu has raised an undisclosed amount of private equity funding from fintech holding company Crossfin to scale its operations, Disrupt Africa reports. According to Crunchbase, the startup – which pays you more as you grow older – has raised USD 200 K asides the recent financial development.
Nobuntu was founded in 2016 by Reka Barole and Rusk Taska. The tech startup designs and distributes community-minded savings products designed to help South Africans prepare for old age, with hopes to revolutionize the retirement savings industry in South Africa.
Crossfin, a two-year old S.A-based financial services firm who invests in fintech solutions to enable growth for African and foreign economies, has funded 11 companies so far, including Retail Capital, Crossgate, Atura and Blue Garnet. Founded by Anton Gaylard and Dean Sparrow, the company has two investors, has raised one ventures series unknown round, and has made 4 lead investments.
Across the continent, South Africa is the one country where insurance garners quite a premium, and that is made possible by its amalgamation with technology to make it easier for South Africans to insure cars, houses, and savings. The sector in Africa as a whole is termed by Financial Times as “a giant waking up.”
In some regards, the South African market is one of the most advanced in the world, with a premium-to-GDP ratio of over 20 percent that stands as one of the highest, and a well-regulated, well-managed and innovative set of insurers. With the government introducing new sets of laws to watchdog the sector, the insurance market is becoming more sophisticated.
Insurance kicked off in South Africa as two branch offices were established by the United Empire and Continental Life Assurance Association and the Alliance British and Foreign Fire and Life Insurance Company, in 1826. As many other companies established their own branches, some three decades later, the market thrived and became highly international. As the 19th century snowballed to an end, the then Cape Colony had over 50 insurers providing coverage of different measures.
December 2014, South Africa’s primary short-term insurers experienced a gross premium of USD 8.88 Bn, from USD 8.31 Bn in the previous year. The country also had impressive numbers in Q1 2015, when the short-term insurers generated USD 2.42 Bn in gross premiums.
The sector also has its moments; many South Africans are poor, unbanked, uninsured and underinsured. The Financial Stability Board reports that insurance in South Africa faces several challenges as well as risks. Save the high unemployment rate and slow economic growth which take their toll on insurance in S.A, FSB notes more technical drawbacks such as insufficient data, lack of historical data, retrogressing systems, the need for better risk management, cost management, and governance.
Nonetheless, insurance startups are on the move, and many of them are leveraging bespoke insurance-tech models to serve the country better. According to PWC’s 19th Annual Global CEO survey, medium-to-long-term trends will disrupt the insurance industry by 2020, more so than most other industries. The report cites that the most prominent of these trends would be fintechs, changing demographics, and regulation among others.
This year alone, South African insurance startups such as Ctrl, Santam Insurance, and InvestSure have completed significant funding rounds to scale, expand or launch more products. While most of these rounds were undisclosed, they yet gave credence to a rapidly developing insurance cum tech sector in South Africa.
Featured Image: Ventureburn
South Africa’s insurance and tech startup Nobuntu has raised an undisclosed amount of private equity funding from fintech holding company Crossfin to scale its operations, Disrupt Africa reports. According to Crunchbase, the startup - which pays you more as you grow older - has raised USD 200 K asides the…
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