African countries are yet to catch up with social security and safety programs commonly used in the West, where the government provides health insurance and unemployment benefits to citizens.
The general perception of insurance on the continent has been bland for years, and its penetration rate, except South Africa, is subpar. Per a McKinsey study in 2018, Africa’s insurance market stood at a 3% penetration rate; with South Africa excluded, it was 1.12%.
Only 1.9% of its adult population had one form of insurance policy in Nigeria as of 2018. Despite the dire situation, many startups are springing up to broaden insurance coverage across the country.
In the news today is one such company: Casava. The self-described “Nigeria’s first 100% digital insurance company” has raised a $4 million pre-seed round. It’s the largest pre-seed for an African insurtech company and second-largest for a Nigerian startup after Nestcoin, whose round was announced a day before.
Berlin-based Target Global led the pre-seed round, with foreign VCs and angel investors such as Entrée Capital, Oliver Jung, Tom Blomfield, Ed Robinson and Brandon Krieg participating.
The local investors involved are all founders. They include Uche Pedro, Babs Ogundeyi, Musty Mustapha, Shola Akinlade, Olugbenga “GB” Agboola, Honey Ogundeyi, Tosin Eniolorunda and Opeyemi Awoyemi, among others.
Bode Pedro is the founder and CEO of Casava. Before starting Casava, Pedro ran VisaCover, an insurance brokerage company, in 2014. The idea for Casava came while VisaCover provided an alternative in the auto insurance market by allowing drivers of Uber, which was one of its partners, to make weekly insurance payments instead of quarterly or yearly payments insurance partners before it operated.
“We saw mass adoption and knew the market needed insurance payments to be broken down. But then we noticed that as brokers, we didn’t have full control about that process and we weren’t giving people the best experience,” Pedro told TechCrunch on a call.
“We knew if we were going to take insurance to the next level, then maybe we need to control that product and be involved in product end-to-end.”
After the serial entrepreneur exited the insurance brokerage company in 2016, Pedro brought on Olusegun Makinde, an ex-VP at JP Morgan, as chief operating officer to build Casava in 2019. The team cruised to get a micro-insurance license and launched fully …….