Insuretech startup, Lami Technologies, is partnering with Unchorlight Kenya (UNK), to bring financial security for boda boda riders in Kenya by providing them with insurance covers.
UNK is a mobility fintech company that delivers a rent-to-own model finance service known as ZARIBEE for boda boda riders in Kenya. The model finance service aims to empower riders with easier access to motorcycles by supporting them with affordable digital credit to acquire riders’ own bikes and accelerate the power of the country by supporting them to form a ‘reliable community’ in which they grow together.
Through its partnership with Lami, UNK will now offer its riders protection with motorcycle insurance and personal accident cover which are essential to them.
According to a report launched by Car & General in 2022, there are 1.2 million boda boda riders in Kenya, 9 out of 10 boda boda’s are used for commercial purposes, representing over 1 million jobs created, where 75 percent are youth and 6 percent women and subsequently contributing to 3.4 percent of the country’s GDP. The huge growth in the sector has been accompanied by avoidable injuries and deaths.
More data from NTSA shows that 30 percent of road traffic accidents involve boda boda’s and indicates the majority of the accidents tend to involve injury. The accidents cause the injured to rely on already overburdened families and friends to help cover the hospital bills through contributions/harambees.
Focus on the boda boda industry has primarily been on financing solutions, overlooking safety and insurance. As of 2020, the insurance penetration rate in Kenya decreased to 2.17 percent, down from 2.34 percent in the preceding year and 2 out of every 3 boda boda riders are either underinsured or uninsured. Most boda boda’s can’t afford annual premium payments for their insurance covers and the current insurance policies available include lengthy paper-based processes with claims taking up to 30 days or more. This partnership is harnessed towards bridging the insurance gap by providing affordable, efficient, and relevant insurance that will protect riders and their customers from financial losses in the case of an accident or other incidents. It will also help increase the safety and reliability of boda boda services for customers.
“Boda boda’s are critical to Kenya’s transport system, and with the number of riders growing year by year, it is important to address the insurance gap in this sub-sector. As such, we are proud to have partnered with Unchorlight in leveraging our technology to launch reliable and suitable insurance coverage for boda boda riders, an integral part of Kenya’s economy. With thousands of people using boda boda’s daily, our digital insurance platform integrated into this solution will have a substantial and positive impact on driving inclusive growth for riders in Kenya,” Waithera Thinguri, Head of Business Growth, Lami Technologies said.
Since its inception in 2020, Lami has improved insurance distribution by developing relevant technical platforms for insurance distribution. Through Lami’s platforms, UNK can access instant motor and personal accident insurance for its riders and credit life insurance on the motorbikes issued on Rent-to-Own basis. UNK will also be able to access products from multiple underwriters, therefore, increasing its insurance portfolio. With this partnership, riders no longer have to deal with the slow issuance of motorcycle certificates and policy documents. Additionally, this partnership has also led to reduced conflicts with law enforcement agencies as there is increased compliance.