[Transcript] #39: BIMA (Milvik) - How the HealthTech company is providing insurance & medical services across emerging markets
Transcript and reflections from the episode recorded October 3, 2021
Hello! Bankole here.
Bima Health is a microinsurance company, operating in 6 countries with over 5 million subscribers. Their primary business is an insurance platform where they work with insurers and look for different modes of distribution (e.g., Telcos) to sell the insurance. Premiums are low, and the business model is to make it up on volume. In October 2023, Bima was acquired by CapitalSG, an investment and advisory firm, focused on turnarounds.
When we covered them in 2021, I was bullish. Bima figured out distribution to go after a large opportunity for an underserved population. However, their experience shows the challenges of insurance and serving low-income customers.
Bima Health and Microinsurance
Bima’s founding story is impressive. It was an idea whose time had come: "bringing insurance and healthcare solutions to the unbanked and underbanked citizens of emerging countries across the world, leveraging the spread of mobile telephony and e-wallets". The market opportunity was significant - “~2 billion people in emerging markets excluded from insurance coverage, a $50B opportunity”. Electronic payments and mobile internet required for low-cost business models were everywhere. All that’s left is to convince the customers of the benefits of insurance, and we can get them to sign up.
The jury is still out on the viability of microinsurance. Premiums are too low for insurers to make money, consumers are indifferent or too poor to care. Boosters say this works at scale (a familiar fundraising argument), and people just need more information. The answer might be a lot more simple.
Low-income consumers are making rational choices on where to spend their money. These microinsurance plans offer very little coverage, especially for a young, illegible, and low-income population more likely to be reliant on traditional medicine. While it’s true that even minimal insurance can provide significant protection against catastrophic health expenses, the limited scope and restrictions of these plans mean they might only be useful in specific scenarios. Also, there are fewer healthcare facilities accessible to this population and many do not trust medical professionals. (Femi Kuti agrees).
What this means for Bima and similar startups
People will buy when insurance starts providing value. There are numerous initiatives too many to list that are working to address this. I’m optimistic that as we get better healthcare services, and customers see value in these programs, adoption will increase. Microinsurance can succeed, and the technology that powers service delivery and distribution can be the spark that ensures profitability and viability.
I’m rooting for Bima in the next phase of their evolution. Beyond diversification benefits, their international expansion also opened them up to a diverse pool of investors leading to the eventual acquisition in 2023. You can listen to the episode here and paid subscribers can find the transcript below.
Bankole.
Additional reading
Why People Don’t Buy Microinsurance | Blog | CGAP - link
How Milvik Bima took insurance and health solutions to emerging Asia and Africa - link
Traditional, complementary and alternative medicine use in Sub-Saharan Africa: a systematic review | BMJ Global Health -link
#39 - BIMA Health
[00:00:00] Olumide Ogunsanwo: Welcome to Afrobility, a conversation about African business and technology. Today, we're going to talk about BIMA, the insurance health tech company. We'll explore the BIMA story across six areas. Uno, we'll kick off with some context about healthcare in Africa. Dos, we'll talk about BIMA's founding early history. Tres, we'll do their fundraising and growth. Cuatro, we'll talk about monetization strategy. Cinco, we'll talk about the competitive positioning and potential exit options. And then seis, we'll end on our overall outlook. This episode was recorded on October 3rd, 2021.
[00:00:42] Bankole Makanju: we're talking about Bima Health, a micro insurance company headquartered in Sweden and London.
[00:00:47] Olumide Ogunsanwo: We're talking about Bima, aka Milvik, apparently that's, that's their official corporate name.
A health tech company that provides insurance and health services to emerging countries. Specifically, their primary health products are life and health insurance. They also offer a bunch of other services, telemedicine, pharmacy discounts, and so on. And they're in many different countries, especially in Africa and Asia, most notably Ghana, Bangladesh, Pakistan, and a few others.
So, excited to talk about them today.