Power through Partnership – New market opportunities for InsurTech in the ride-hailing sector

The ride-hailing market in Africa is currently booming. In 2019 a total of $128.4 million USD was invested into transport and logistics companies in rounds totalling $1 million USD or more. In 2019, 13% of the total investment went into transport and logistics, 40.6% of this was invested in ride-hailing or ridesharing solutions.

We surveyed bodaboda motorcycle taxi riders who are either independent or affiliated with ride-hailing companies in Nairobi. We look in more detail at both insurance coverage and some of the factors influencing purchasing decisions.

Microinsurance has a low but growing market penetration

The market penetration for microinsurance products is currently 2.6% of the population living under $2 USD per day

Our survey suggests that customers are knowledgeable and see value in insurance

100% of survey respondents agreed that they knew about available insurance products and 73% of respondents agreed that insurance products are important

Partnerships are an effective way of increasing penetration, however, barriers still remain to effective product retention

Independent drivers, unaffiliated with any ride-hailing company, were less likely to have any insurance products other than those that are a mandatory requirement. 35% of riders affiliated with a ride-hailing company had personal health insurance and over 90% had comprehensive motor insurance. 0% of independent riders had any form of health and comprehensive insurance cover.

This report was first published in December 2019.

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