ESUSU: MicroInsurance Nigeria

We are building micro-insurance products that are affordable, accessible, and needed.

18 years working with global carriers, and 8 years in Financial Services in Nigeria.

Problem Statement
Access to many types of insurance in Nigeria is not available and in some cases unaffordable.
The key drivers of Microinsurance to reduce the vulnerability of low-income earners include appropriate cover, simple and easily understood products, manageable premiums, suitable delivery channels and convenient premium collection methods. The microinsurance business model is based on low-premium policies, and this in itself creates a challenge for micro insurers. In order words, micro insurers have to offer low-premium policies while taking into consideration the high costs of the underwriting and distribution processes.
Also, there is lack of transparency in the claims process i.e. insurance companies refusing to payout on claims, which has led to widespread mistrust towards the idea of insurance in Nigeria.
Furthermore, undercollaterization (i.e. a scenario where the outstanding principal balance of all Insured Obligations exceeds the outstanding principal balance of the funds securing the Insured Obligations) has been known to be an issue in the micro-insurance and the insurance industry in Nigeria despite the efforts by the regulatory authorities to guard against this.

Proposed Solution

To address these issues, Esusu aims to use blockchain technologies to deploy micro-insurance products that are affordable, accessible, and needed. Esusu's key differentiator will be a DApp created on the Cardano blockchain to automate the premium payment, liquidity provision, claims process for micro-insurance and ultimately reduce the underwriting and distribution costs.

Insurance Products

Life and Health to begin with as they have lower capital requirements

Tech/Cardano Use:

Atala Prism Once Available

Main components of the DApp will be:

Onboarding/Purchasing Policy
Maintaining liquidity:
The required liquidity for operating a microinsurance business in Nigeria as provided in the NAICOM guidelines will be maintained by the Liquidity pool of the Esusu DApp. The funds will be a combination of premium receipts and investor funds. The pool will facilitate deposit of funds
by investors and receipt of premium payments.
Premium Calculation:
The functionality of integration and deployment of risk models developed by Esusu's actuarial team or by a third party on behalf of Esusu will be integrated into the Esusu DApp to facilitate premium calculations for prospective policy holders.
Claims handling, processing and payment.
One of the major problems with insurance in Nigeria is the lack of transparency in the claims process i.e. insurance companies refusing to payout on claims. Esusu seeks to change this by providing an automated and transparent claims handling process which utilises a combination of smart contracts and input from the qualitative assessment by the incident assessors.

How does this proposal meet the Challenge objective?

We believe that this proposal meets the grow Africa challenge in the following ways:
It is tapping into a market / space that has not yet been fully explored, and where there is significant room for improvement in the practices and service delivery of existing market players.
The success of this venture will mean increased awareness, penetration and adoption of micro-insurance and therefore Cardano (since we are building it on Cardano blockchain) in one of Africa's largest markets.
Even though this venture could be done on a standalone basis, we welcome the opportunity to collaborate with other projects requiring similar technological solutions, as this would further drive adoption of Cardano across multiple projects.

Go to Market

Esusu aims to reach its target customers via partnership models.
65% of customers using brokerage and agency channels.
35% via partnership with microfinance institutions to either directly sell the individual microinsurance policies or bundle them with other micro-financial products.

Funding Requirements

The Funding sought will go towards the tailoring Atala to meet our requirements, development of our website, marketing content and regulatory capitalisation requirements.

Budget Total = $75,000

Programming cost (SOR & URS incorporation) - $ 8,000
1 actuarial scientist / mathematician to develop risk model 3 months - $15,000
Team of 4 locals to gather information for developing risk models 3 months $6,000
Capitalisation requirement - $40,000
Website development - $1,200
Marketing personnel (initial phase) for 6 months - $4,800 ($800 USD per month for 1 manager and 1 support staff)

About the team

Quasar - 18 years working with global carriers, and 8 years in Financial Services in Nigeria.
Mo – 16 years engineering and project management experience, with good knowledge and understanding of blockchain technologies (certifications include - CSc Decentralised Applications and Certificate of blockchain studies)

References that validate ability to execute

Available upon request, under NDA with several clients

Project Milestones

End of Month 3

• Registration with the Nigerian Corporate Affairs Commission complete
• Website Design complete fully loaded with relevant information, documentation, roadmaps, investor slides etc
• Data gathering requirements and scope identified
• Discussions with Atala Prism initiated along with Statement of Requirements (SOR) and User requirements Specification (URS) produced

End of month 6

• SOR / URS integration into Atala Prism completed and ready for testing
• Application with National Insurance Commission filed
• Partners for distributing products identified
• Data gathering complete

End of Month 9

• Risk models developed
• On-boarding of at least one partner - MOU's, CA agreements, commercial negotiations

End of Month 12

• SOR / URS incorporation fully tested and ready for launch
• Product Launch

Challenges
Typical challenges for anyone trying to enter the insurance market in Nigeria
• Public apathy against insurance from historical stories of failure to pay claims
• Unhealthy price competition hindering efforts to build financial capacity
• Inability of the operators to agree under their association to determine the market rates
• Fake operators and unprofessional conducts of certain market players
• Dearth of high performing executives with the right attitude and passion

Complete product design and file with https://www.naicom.gov.ng/