Due to the growth and rising demand of the middle class in Africa, indigenous online shopping mall, Jumia and one of the world’s asset management and insurance leaders, AXA have decided to collaborate to bring insurance services toAfricans via online and mobile platforms. According to Vayanos and Hammond (2006), a thriving insurance sector is not only evidence of an efficient financial service sector, but it is also a key barometer for measuring a healthy economy.
Jumia is part of a broader ecosystem of services providing opportunities for local African businesses to operate with the fast-growing African consumers and the middle class. AXA is a multinational insurance conglomerate of independently run businesses, operated according to the laws and regulations of many different countries.
In a 2015 report by auditing outfit KPMG, it was cited that insurance in Africa is practically non-existent except within the upper echelons of society.
“Despite its importance for economic development, the majority of African countries lack access to insurance products. Access to insurance only starts to increase quickly in the upper middle income brackets, but with most Africans still struggling to meet their basic food and other day-to-day needs, insurance is still a long way off,” says the report.
However, Jumia and AXA are about to change that narrative as AXA’s African insurance companies plan to propose custom-made insurance products to Jumia (www.Jumia.com) and AIG’s e-commerce client base through its ecosystem of marketplaces and classifieds services. Africa’s low penetration rates, the rise of the middle class and urbanization play a huge role in this decision.
Both companies see the potential in Africa as an emerging market and they intend to provide the fast growing middle class economy, the opportunity to partake in activities within the insurance sector, while contributing to developing Africa’s economy by exposing new financial opportunities for consumers and businesses on the continent.
KPMG conducted a research in 2013 to determine the rate of penetration of insurance on the continent and the result was less than encouraging.
However, when presented with the option of accessing insurance services through mobile phones and the internet, the figures are likely to increase due to growing internet proliferation on the continent. According to internet world stats, Africa is experiencing a steady rise in internet access and use, thanks to projects initiated by Facebook for attempting to bring internet access to remote regions on the continent.
“We expect Africa’s e-commerce and online businesses to develop rapidly as a result of the strong growth of the middle class coupled with the increasing mobile phone and internet penetration. “Internet is creating unparalleled opportunities for consumers and businesses in Africa to connect and do business in a new way. We continue to be very excited about the growth prospects of Jumia and this new partnership will enable us to capture them,” said Sacha Poignonnec and Jeremy Hodara, founders and co-CEOs of Jumia and the Africa Internet Group (AIG).
“Going forward, we aim to enable African consumers to better access insurance solutions to create sustainable financial well-being throughout their lives and those of their dependants,” added Denis Duverne, Deputy CEO of AXA.