Nigerian startup ETAP was launched to make buying and claiming on car insurance smooth and enjoyable, a philosophy that is built into its name, which stands for “easy as taking a picture”.
Launched in April 2022, ETAP provides drivers with access to a range of daily, weekly, monthly and quarterly plans to choose from. It uses machine learning to build intelligent risk profiles that determine appropriate premiums for each driver, allowing them to achieve lower premiums by driving safely.
Using advanced telematics, the driving experience is gamified to improve driving behaviour and drivers can earn Safe Driving Points that can be exchanged for shopping vouchers for the most in-demand retail outlets, fuel, cinema and concert tickets, and other exciting experiences.
ETAP has insured hundreds of thousands of individual trips, and in April of last year secured US$1.5 million in pre-seed funding to grow its team and drive the adoption of car insurance across Africa.
The startup’s CEO Ibraheem Babalola told Disrupt Africa that the African continent had one of the highest risk environments in the world, yet also the lowest insurance penetration.
“The big problems are around slow digitisation, inappropriate pricing, cultural bias, public apathy, and inefficient manual processes, leading to a less than three per cent penetration across the continent,” he said.
“But Africa has a really big insurable market, the potential for growth in the African insurance market is significant and largely untapped. The expanding middle class, increasing financial inclusion, supportive regulatory environment, and growing awareness about the benefits of insurance provides an exciting opportunity to unlock value and establish a leading position in this dynamic market.”
Indeed, the potential market size is over US$2 trillion, and Babalola said he believed the growth opportunity would be unlocked by companies leveraging technology to address the underlined challenges of the sector – like ETAP.
“In Nigeria, despite car insurance being mandatory, only two of every nine cars on Nigerian roads are insured. Today, 80 per cent of our customers are first-time policyholders highlighting our impact in driving the number upwards from 22 per cent compliance,” he said.
“We believe that innovating in insurance in Africa goes beyond just digitising long forms but truly redesigning and reimagining the insurance processes and offerings in a way that makes sense for the customers of today.”
ETAP has experienced a positive reception, with over three million kilometres of insured trips driven via its app so far. It has also rolled out “ETAP Enterprise” tailored for companies, fleet managers, auto-loan providers, and their fleets and drivers.
“Now, we have Nigerian banks enjoying the power of ETAP as well as numerous companies, including ride-hailing companies such as Bolt, and Balloon – an ETAP product – is coming this quarter, specifically built for insurance companies to distribute faster and increase their revenues by empowering their agents and gig workers,” said Babalola.
Busy times, then. This growth has been funded by investors including the Toyota Tsusho Corporation, through its corporate venture capital arm Mobility 54, as well as the likes of Graph Ventures, Tangerine Insurance, and Newmont.
“Our approach to investors and capital-raising has been very strategic, as we see investors as partners on a journey together, so we typically only welcome investors that can bring more value beyond deploying capital,” said Babalola, who added that the startup monetised via gross premiums written.
“Our revenue generation is anchored on our dual-sided model that not only enhances the insurance experience for consumers but also accelerates revenue and distribution for traditional insurance companies and their agents,” he said.
Babalola said ETAP, which believes it has built the “most powerful car insurance product in Africa, was operational in Nigeria, but “building for Africa”.
“We are in the final stages of our approval to launch in Ghana, and then we have our Francophone targets after. Our expansion plans are robust – we aim to scale across Africa.”