In sub-Saharan Africa, 52% of adults save in some way, according to the World Bank. Over the last decade, South Africa has made positive strides in financial inclusion, and more than 80% of the adult population now has bank accounts. But real financial inclusion is more than just having a bank account.

“Everyone, regardless of income level, nationality, gender, race, or occupation, should have universal access to products that safeguard their financial future,” says Charlotte Koep, CEO of insurtech company Root Platform. “This includes insurance and other products which empower individuals and communities to manage their financial risks, enable them to invest in their future, and participate more fully in the economy.”

Despite progress, reaching under-served consumers and informal sector businesses remains a challenge. A significant portion of the population still can’t access comprehensive financial services. This means that traditional insurers that develop affordable solutions for under-served communities have the opportunity to expand market demand for their products.

Because traditional insurers often still rely on legacy systems and technology, their ability to innovate, expand their product offerings, and engage with their customer base in a familiar setting, is limited.

Insurtech platforms give traditional insurers the ability to easily innovate and grow their product offerings and reach. APIs that seamlessly integrate with older systems enable insurance companies to develop and deliver new products more efficiently, without completely overhauling their existing infrastructure.

“Insurance, like many other products, is not one-size-fits all. Providing the right solution for a customer and their unique circumstances gives broader coverage to consumers who need it most. At the same time, greater efficiencies in policy sales, administration, and claims processing can lead to cost savings for insurers who can pass that saving on to policyholders.

“At its core, insurance provides protection against risks and uncertainties for individuals and businesses,” says Koep. “Without car insurance, for example, an accident could result in financial ruin for the driver. Uninsured business owners are unable to take the necessary risks to run and grow their businesses.”

One example of how insurtech facilitates financial inclusion is Mr Price’s range of insurance products for its store card holders. Products include life cover, lost card protection, account protection, commuter personal accident plans that cover death and injury, funeral plans that cover the whole family, and all-round insurance cover.

“Insurance solutions like these have not been generally available to lower-income consumers until now,” Koep comments. “Driven by technology, these advancements show the potential for insurtech to reach underserved markets and provide financial protection for different life stages and living needs.

“When people have access to the full range of financial services and are given the opportunity to buy these services in a familiar and comfortable setting, they can better plan for long-term goals, handle unexpected emergencies, and manage risk. This empowers families and businesses to invest in education, health, and entrepreneurship.”

Koep also stresses the need for greater education around insurance. “Insurance is often misunderstood,” she says. “Educating people about the importance and benefits of insurance will improve financial literacy and freedom and help them make informed decisions about their financial protection.”