Kenya’s leading telecom company, Safaricom, has obtained an insurance license from the Insurance Regulatory Authority (IRA), marking the end of a four-year wait. This license allows Safaricom to introduce insurance services to M-Pesa users with a new product called Bima, as announced by CEO Peter Ndegwa during the H1 2024 earnings call.
The Bima product aligns with Safaricom’s broader strategy to transform M-Pesa into a comprehensive financial services platform that meets customers’ “digital needs.” Safaricom had been piloting insurance offerings since 2020, awaiting regulatory clearance.
“Innovation remains critical. We have revamped our wealth proposition and have now secured an insurance intermediary license from the IRA,” Ndegwa noted.
“This will help us accelerate the rollout of insurance solutions. We expect to launch offerings in wealth, savings, and insurance during the second half of this financial year.”
Safaricom aims to leverage its 30 million active users, who transact over $11.6 billion (KES1.5 trillion) monthly, to expand its unit trust, savings, and insurance products, thereby countering declining revenue from calls and texts. With insurance penetration at just 3% in Kenya, Safaricom hopes M-Pesa’s popularity will facilitate its entry into the insurance market.
The telco’s push into financial services, such as wealth management and insurance on M-Pesa, has faced challenges, including calls from the Central Bank of Kenya (CBK) for Safaricom to separate its mobile money operations into a distinct entity.
M-Pesa already offers a unit trust product, Mali, and savings accounts through partnerships with KCB Group and NCBA, along with an overdraft service.
In H1 2024, M-Pesa accounted for 43% of Safaricom’s service revenue, with a 16.6% growth to $560 million (KES77.2 billion) compared to the previous year.
Safaricom currently controls 93.4% of Kenya’s mobile money market, with Airtel Money holding the remaining 6.6%, according to the Communications Authority of Kenya.
