Egypt’s first hackathon focused on creating an inclusive and tech-enabled insurance sector

The Insur;Hack (focusing specifically on insurtech) was a collaborative effort with Promotion of Access to Financial Services for Small and Medium Enterprises (PAFSMA), Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) Egypt, Financial Regulatory Authority (FRA) of Egypt, Insurance Federation of Egypt, American University in Cairo (AUC), Venture Lab, Rainmaking Innovation and insight2impact.  The Insur;Hack was designed to provide competing teams with sector-specific training and mentorship, as well as the chance to win financial and physical resources that enable them to ideate, prototype and build digital products that can help to disrupt the insurance industry.

The event sought to pioneer innovation in Egypt’s insurance sector by addressing the Egyptian insurance sector’s main barriers to inclusive insurance. The Insur;Hack initiative aimed to solve challenges for providers as identified through industry engagement and research which included multi-country review of inclusive insurance. These challenges were focused on the four challenge statements:

Challenge 1: Developing data analysis and assessment tools for insurance companies.

The problem: Insurance providers struggle to access, collect, analyse and interpret data about their markets and customers.

Data has always been crucial to insurance provision. With increasing availability of data, and with increasingly powerful data analysis methods, the opportunities for insurance providers to better design and distribute their products are expanding rapidly. Yet one of the most common challenges communicated by Egyptian insurance providers is that of accessing, collecting, storing, analysing and interpreting data.

This challenge required the development of a data and analytics tool for insurance providers to overcome these hurdles.

Challenge 2: Transforming the insurance agent

The problem: Insurance distribution via agents and brokers doesn’t reach sufficient mass market scale.

One of the most common challenges experienced by insurance providers in Egypt is that of distribution to their clients. Distribution of insurance in developing markets is notoriously difficult. ­Target markets are geographically dispersed outside of urban areas and margins in inclusive insurance are low, thus constraining the business model. Insurance distribution in Egypt is mostly done directly by insurance companies or through intermediaries such as brokers and agents. However, incentive structures, infrastructure challenges and low trust by customers prohibit these intermediaries from successfully reaching the mass market.

This challenge required a digital solution to improve the functioning of insurance agents, encouraging and enabling them to more successfully reach the mass market.

Challenge 3: Reaching the low-income insurance segment

The problem: There is low take-up of insurance products among the low-income customer segment.

Low-income customer segments are notoriously difficult to reach with insurance products. This means that this target market, despite experiencing regular and severe shocks, uses other (often sub-optimal) coping mechanisms in Egypt. Common reasons for this include a lack of perceived value from the insurance products on offer; low trust in insurance companies; a lack of awareness of insurance products; and a feeling that ‘insurance products are not for people like me’.

This challenge required the development of an insurance solution that better suits the needs of the low-income target market.

Challenge 4: Creating a competitive edge for SME insurance

The problem: Current insurance offerings provide insufficient value to SME customers.

SMEs (excluding micro-enterprises) are a sector that has high potential for insurance provision, yet they are generally underserved by the industry. Conversations with Egyptian insurers have illustrated that, in their experience, SMEs do understand the value of insurance products. However, they do not feel that insurance products sufficiently meet their needs. Common complaints include: a lack of comprehensive insurance products for small businesses; a lack of suitable group products for SME employees; and engaging with insurance providers carries a high administrative burden. From the perspective of the insurer, cost-effective distribution and servicing of the products are challenging.

This challenge required a solution that provides SMEs with sufficient value and that makes for cost-effective distribution.

Read more about the solutions and winners in the full report:

Insight2impact (i2ifacility) was funded by the Bill and Melinda Gates Foundation in partnership with the Mastercard Foundation. The programme was established and driven by Cenfri and Finmark Trust.