Afrigather Kenya’s greatest telco Safaricom has secured an insurance coverage licence from the Insurance coverage Regulatory Authority (IRA), ending a four-year wait. The corporate will now provide insurance coverage providers to its M-Pesa customers with a brand new product, Bima, its CEO Peter Ndegwa stated throughout Thursday’s H1 2024 earnings name.
The brand new product aligns with the telco’s technique to broaden M-Pesa right into a monetary service supplier that responds to its prospects’ “digital wants.” The corporate has been testing insurance coverage merchandise since 2020, awaiting regulatory approval.
“Innovation stays essential. We now have revamped our wealth proposition and have now obtained an insurance coverage middleman license from the Insurance coverage Regulatory Authority,” Ndegwa stated.
“This can assist us speed up our rollout of insurance coverage options, we count on to rollout propositions in each wealth and financial savings but in addition insurance coverage within the second half of this monetary yr.”
Safaricom is eager to faucet into the over 30 million lively customers who transact over $11.6 billion (KES1.5 trillion) month-to-month to develop its unit belief, financial savings, and insurance coverage merchandise and offset a decline in calls and textual content income. With simply 3% insurance coverage penetration in Kenya, Safaricom hopes to experience on M-Pesa’s reputation to get a chunk of the insurance coverage market.
The telco’s plans to extend monetary providers like wealth administration and insurance coverage on its M-Pesa platform have run into a number of issues, together with a push from the Central Financial institution of Kenya (CBK) for the corporate to separate its cellular cash right into a separate unit.
M-Pesa already has a unit belief product, Mali, and financial savings accounts by way of partnerships with KCB Group and NCBA. It additionally has an overdraft product.
In H1 2024, M-Pesa accounted for 43% of the service income after posting a 16.6% progress to $560 million (KES77.2 billion), in comparison with an identical interval final yr.
Safaricom controls a 93.4% share of Kenya’s cellular cash market, leaving Airtel Cash with 6.6%, in keeping with the Communications Authority of Kenya.
