West African InsurTech, Cova Raises 10k Euro to Simplify Insurance Integration in Africa

The InsurTech company COVA received a significant investment of 10,000 Euros from CAN, reinforcing its commitment to supporting businesses and individuals in their daily struggles by providing affordable and easily accessible insurance services.

This investment marks a pivotal moment both for COVA and for the booming startup ecosystem in Cameroon.

All the details in the press release below:

Thanks to COVA's innovative approach, the company, led by CEO Virginie POUNA, is poised to revolutionise the insurance landscape in Cameroon and other African countries.

COVA LIFE

For those who are not sure about which insurance to subscribe to, at least they can guarantee the financial side. COVA Life allows you to set up insurance annually for the people of your choice. You pay an amount between 8,000 francs and 20,000 francs depending on your age and you are guaranteed that your loved ones will receive 1,000,000 francs in the event of death or disability. This reassures you of the continuity of financial support for your family or children in case the worst happens.

COVA FOR PIKINS

For those who want to ensure their children live a stable life while protecting their future, COVA for Pikins offers a contract that combines savings and foresight. You invest your savings at a guaranteed interest rate of 4.75% per year, allowing you to collect your capital at the end of 5 years. Simultaneously, you pay a small amount to guarantee the payment of a large capital sum to your designated loved ones if the worst happens during the contract period. For example, pay 1000 francs per month for 1,000,000 francs guaranteed in the event of an incident. You set up a payment by bank transfer, you can also contribute to the platform via Mobile Money after payment of the first premium.

COVA FOR FAMILY

The whole family is covered in health insurance by a single contract. COVA Family allows a person or a family (father, mother and up to 3 children) to cover themselves against the risks of illness. A single contract for an entire family. Assistance of up to 70% payable in advance or reimbursed to your mobile money account within one hour

COVA FOR WORKERS

COVA for Workers allows you to cover the risks of accidents during travel (traffic, work, home, and other accidents). You only need to pay 500 francs per day to have peace of mind for a year, as the insurance covers medical costs up to 250,000 francs. Additionally, it provides fixed compensation based on the care required following hospitalization.

COVA MBOA DIASPORA

This is for those wishing to travel or who need to assist family members in their travelling process.

COVA Mboa allows a person, community, family etc. to receive donations and financial assistance in case of the death of a parent.

COVA assists both individuals and businesses in their assurance procedures without them having to endure the hustles and complicated administrative tasks that come with many insurance companies. With COVA, the subscription process is simplified, and personalised services can be granted to customers according to their needs.

Despite the claims stating that the adoption of insurance in Africa is slow, insurance services existed but not in the ways InsurTech functions. According to the article of Rodrig Mbock “ECONOMIQUE REPORTAGE”

In Africa, traditional methods of self-insurance function by transferring and managing risks collectively, and generally take the form of community savings supervised by a “wise man” or governed by relationships. It is common in Africa to share risks and resources in order to provide help to people in difficulty.

In addition to tontines (a joint financial arrangement whereby the participants usually contribute equally a certain amount of money or utilities for a each member individually during a certain time, usually one month) , non-profit or membership-based associations, such as burial societies in South Africa (Culturally, funerals are more than the burial of a loved one. Most often, it is a very important event which brings together all the families of the same community or more) It is further explained in the article of Serge KOFFI “Le très rentable business du funéraire en Afrique du sud”. or "iddirs" (An association of people that have the objective of providing social and economic insurance for their communities in the event of death, accident, damages to property, etc) for small farmers in Ethiopia, have established risk-sharing systems for individuals who do not have formal insurance this is explained in the article of D. Aredo “The IDDIR: an informal insurance arrangement in Ethiopia”.

COVA knows and understands this traditional method of insurance, which is why amongst it services, it proposes insurance policies for communities, families, and even enterprises to cover frequent issues like finances, fire incidents, thefts, or sickness but also covers difficulties present in most African countries like, Agriculture, Borrower death and even provides capital in the event of bereavement affecting the member or client, to provide financial support to their family. We shall further explain below, how insurance affects economic growth.

1. Insurance contributes as an accelerator for the African economy

Insurance firms have a significant role in the expansion and stability of economies, as well as in the fair distribution of income and interpersonal cohesion. There are two ways to analyse this increasing effect of activity: first, by looking at the primary function of insurance, which is to pay out compensation in the event that risk materialises, and second, by looking at the institutional investor role, which is connected to the accumulation of technical provisions for future compensation payments. When someone is insured, they are able to make riskier decisions than they would if they were on their own. Examples of these decisions include starting a business, developing new technologies, constructing a factory or other infrastructure, etc. In fact, people have peace of mind and find it easier to make decisions that will impact their productivity and long-term investments when these risks are insured.

Then, insurance influences the reduction of interest rates and the extension of credit maturities. By ensuring the protection of businesses and households against loss of property, damage or problems repaying a loan, it helps reduce credit risk and prevent both stress and loss of properties in case the credits are not paid.

2. Protection against unpredictable events

For people and local economies, insurance also serves as a stabilising and resilient element during extreme disasters. By shifting the risk to insurance companies, it enables them, for example, to protect themselves against natural disasters. Finally, by enabling the accumulation and pooling of risks, insurance offers the idea of solidarity between people and generations on a concrete financial basis.

Making use of new technologies to assist the African communities

COVA's approach to promoting insurance services in Cameroon and on the African continent is to offer connected and accessible services. The insurance industry's digital innovation and digitalization will enable a reduction of client service costs, a rationalisation of internal processes, and most importantly, the provision of an enhanced client experience to a larger number of people.

In fact, the goal of the assurance startup is to democratise subscriptions and reestablish Africans' trust in the actors.