The ongoing expansion of Africa’s mobile networks and ecosystems is driving unprecedented levels of digital and financial inclusion across the continent, and is already helping build more economically active populations and more equitable societies, says Lukas Barnard, chief technology and information officer (CTIO) of African Insurtech aYo Holdings.

The GSMA’s Mobile Economy Report 2022 shows significant increases in mobile money activity and other financial services on the continent, which highlights the fact that more Africans are able to access a range of financial services from their mobile phones, says Barnard. The GSMA expects the global economic contribution of mobile to increase by more than US$400 billion by 2025.

aYo Holdings, which is 100% owned by telecommunications giant MTN, grew strongly through 2021 into 2022, breaking through the 17 million enrolled customer mark in its fifth year of operations. This rapid expansion has seen the company evolve into a major player in the African microinsurance market using a ‘pay as you go’ insurance model, that gives policyholders the flexibility to have the cover they need at any given time. 

aYo’s vision is to continue to grow into the largest financial services technology platform in Africa by enabling the distribution of a range of affordable and accessible micro financial services products.

“Our relationship with MTN is the key that unlocked the ability to deliver this product. As a result, millions of Africans have access to and are engaging with life and hospital insurance for the first time, which is driving greater financial inclusion – and the range of financial services is only going to grow,” said Barnard.

However, Barnard says any company looking to provide financial services on the continent will need to have a robust technology backbone and be able to scale rapidly while cost-effectively managing material volumes of nano transactions.

“We have a digital focused, cloud-only and mobile-first strategy across the business. All customer touchpoints are digital, which means that we have a completely paperless customer process. Customers send claims related documents to us via WhatsApp. This allows us to reach customers in remote locations and villages across the continent – which has always been the biggest barrier to entry for any Insurtech,” said Barnard. 

Insurtechs also have to be able to deal with massive volumes of data at incredible speeds. aYo’s transactions are real-time, which means the company processes around 200 policy adjustments per second around the clock. 

“Because African Insurtechs predominantly serve the irregular income segment of the market, they have to align with their customer spend patterns. Our customers purchase cover when they can afford to do so, which means there are often surprise spikes in activity. Only by being in the cloud can we dynamically adjust our processing capacity to match customer spend patterns and volume fluctuations,” said Barnard.