Zamara Group: A Leading Provider of Financial and Insurance Solutions in East Africa

Interview with Sundeep Raichura, Group CEO at Zamara Group

Could you give us a historical background of Zamara Group?

Zamara Group has been in Kenya for the last 28 years. We started from very humble beginnings in 1994 as the branch office of a UK firm of consulting actuaries called Hymans Robertson. We were a very small outfit. We were simply handling the actuarial consulting work from the UK, but the business started growing rapidly. I joined in 1995. We were both on the insurance and pension side. The client base started increasing. In 2003, we became part of the Alexander Forbes Group, and that enabled us to increase the scope of our services, as well as the types of things we could do. We diversified into pension fund administration, investment consulting, and insurance broking. In 2017, because of changes in the Kenyan legislation, we rebranded to Zamara. And now, we have expanded into six countries in Africa, and we have a Pan African ambition as well.

What African countries have you expanded to?

As Zamara Group, we are a diversified financial services business specializing in actuarial, pensions, medical and insurance solutions. The countries that we currently operate in, other than Kenya, are Uganda, Tanzania, Rwanda, Malawi and Nigeria. The intention is to expand that geographic footprint to about 10 countries in the next three years as part of our strategic plan. We are looking to enter DRC (Democratic Republic of Congo) hopefully before the end of this year. Ghana is on the radar as well, and we are talking to a couple of people there. We have a number of partnerships and we are looking to see if we can turn those into a much deeper relationship.

What is the competitive advantage of Zamara Group?

Firstly, we have got a very solid track record in East Africa, and the countries that we operate in. We have a very capable leadership team, which has the skill set and the experience to offer solutions that are without peer in Kenya and the rest of the continent. We have spent time to understand the African market, the factors that affect things like savings habits and insurance behavioral aspects. We really understand the markets that we operate in, and that gives us a good edge over the rest of the competition. In the last three years, we have also invested very heavily in tech, particularly digital pensions and insurance solutions. We have a mass market digital pension solution. Last week, we launched a new aggregator platform for insurance products. Our aim is to increase the insurance and pension penetration rates on our continent, and we believe that we need to do things differently. We need to challenge tradition and come up with homegrown solutions that meet the needs of our people and our countries. By doing that, we believe that we can start changing the needle in terms of the level of insurance and pension penetration and benefit our economies at the same time.

Tell us more about the aggregator platform.

The aggregator platform is like a marketplace for our insurance and pension products. Currently, the aggregator platform is a shopping window for customers, particularly on the retail side, who want to purchase insurance or pension solutions. They can compare different products in the market, different insurance companies, they can look at the prices, they can compare product features and make the payment to receive their policy document. Besides, we can also hold their hands throughout, even in terms of the claims management process. It is a good opportunity for insurance companies to showcase what they have to offer to retail customers. We are also going to add a knowledge platform to our aggregator platform, so that people understand what insurance is, the importance of it, and the types of protection solutions that are on offer. We are looking at expanding our scope to include investment products, and we will be adding a suite of investment solutions to the aggregator portal in due course.

Tech is very critical in our part of the world. Africa can make a quantum leap by leveraging off tech and particularly the increased mobile penetration on our continent. Apart from the aggregator platform, we also have a pension platform under which every working Kenyan can open a secure pensions and insurance account linked to their national ID in less than two minutes. They can open their account, and they can contribute any amount from using any channel from anywhere as it is completely flexible. They can view their statement every day, and if they really need to access their money, they can. So we try to ask: what are the impediments to people taking up pension, savings and insurance products, and how do we offer them these in a very simple, easy and flexible manner, recognizing that the structure of our population and the nature of employment on our continent is very different to the Western world?

Since there is low penetration, what are you doing to increase that growth rate, not only in Kenya, but also East Africa and the rest of the continent?

Zamara Group has been at the forefront of a number of initiatives in Kenya, as well as in other parts of Africa. We do a lot of work on advocacy. In terms of creating awareness, engaging with policy makers, engaging with regulators on the continent, on the importance of getting more of our people to save for their future and how valuable even simple insurance solutions can be. There is a lot of advocacy, creating awareness. We also do a lot in terms of providing the education, and we work very closely with other aggregators in the market. For example, in Kenya, almost 85% of our workforce is in the informal sector. These are not salaried people. And this 85% makes up for about 16 million Kenyans, which is a very similar statistic to the rest of Africa. So it is a sector that you cannot afford to ignore. Across Africa, we will have more than 500 million people with zero savings in the next two decades. That is a huge problem unless we do something about it.

By leveraging our numbers, we are trying to get the best rates for very simple insurance products, such as funeral cover, basic life cover, or health cover. There is a lot of demand for medical in our continent. We are trying to see if we can integrate hospital cash as an insurance product and even offer a simple medical insurance solution that could take care of outpatients and even a limited number of inpatient needs as well. So there is a lot to be done. I just feel that the scale of the problem is huge. In the Western world, most of the population is formalized. And even there they are having challenges in terms of all the old age security for their population. But in a continent like Africa, where 85% of the workforce is in the informal sector, we are still a very young continent. But what is going to happen in the next 20 years when these people drop off the workforce because they are no longer able to work due to old age, ill health, disability or even death? Inaction is not an option. Neither is a government financed old age pension plan. So doing something about this is very urgent. One of the things that we keep on talking about is the valuable benefits for our countries, because by harnessing our own savings, we will be able to create that long term savings base that can be deployed into productive areas of investment, and hopefully stimulate our economies and create those jobs that we so desperately need.

So, there is a much bigger agenda around this, and I am very resolute that a vibrant pension sector is going to be one of the pillars on which the future health of our economies is going to be built. On the advocacy level, I personally am doing a lot, not just where we currently have a presence, but also talking to many other countries. And things like pension reforms are on the agenda for a lot of policy makers in Africa. We are seeing a receptive audience.

Imported solutions will not work in Africa. What works in France, the UK or the US will not work in Ghana or Kenya, because our people are different. Our needs are different. Our ability to save is different. The level of understanding is different, and the types of solutions that we need would again be different. So there is a lot of work coming up with these homegrown solutions, and I believe Zamara can be proud of what it has been doing so far.

What has been the impact of the economic crisis and COVID-19 on insurance and pensions?

Africa was spared the worst of the COVID-19 health crisis as our population was remarkably resilient in terms of infection rates and the mortality from the disease. But when you look at the economic impact, Africa was not spared at all. In Kenya, for the first time ever, we actually saw a negative growth rate of about minus 0.5 in 2020. But since then, things have picked up. When I look at insurance and pensions, just as I say that every cloud has a silver lining, a couple of things happened with COVID-19. Firstly, this huge embracing of digitalization and tech has really helped, because there has been a huge increase in online banking, online shopping, and a better reception to insurance for protection and how that can help in future crisis, as well as the importance of saving. Because one of the things that COVID-19 did was to expose the very deep cracks in the social fabrics of our countries. Everybody was impacted, but the impact on the non salaried workforce was even higher. One of the main reasons for that is because people have near zero savings now. There has been a better appreciation of the importance of putting some money aside and having a certain level of life and medical cover. So yes, there was an immediate impact, but what I now see is more receptivity at the retail, individual, as well as the corporate level, to widen the level of protection that people take.

Are you into any CSR activities impacting society?

In Zamara, we have a very active CSR team that looks at areas that we can impact. The focus is very much on what we do: medical, pensions and insurance. So there are a couple of old age homes, hospitals and schools that we support. But we are looking to create the Zamara Foundation that will offer scholarships to talented maths students. We have the largest number of actuaries and the largest actuarial team in Sub Saharan Africa, outside of South Africa. So we are very keen on growing the maths talent pool. We will be offering sponsorships to talented maths students starting from Kenya, but then extending to other countries over time. As Zamara, we recently launched an initiative called Zamara Angaza. Angaza means enlighten. And this is where we are looking to promote financial literacy, because we see this as one of the biggest challenges to an improved uptake of financial products on our continent. We want to help people understand why it is important to save, budget, how you can minimize your debt, get out of debt, save better, etc. This program is targeted at the young and we will be starting in schools. That is a major initiative that we launched in July of this year.

What is your vision for the future of Zamara Group in terms of expansion?

In Kenya, the size of the untapped potential is still huge. As part of our strategic plan for the next five years, we are looking to firstly expand the range of our services to include wider savings solutions and investment products. We are looking to widen the market segments that we operate in. We have been a very strong corporate player, but we are making a breakthrough into the SME, MSME, retail, as well as the mass market space. Leveraging on that track record, we are looking to see how we can deepen the presence that we currently have in the other five countries. For example, in every country we are looking at what we currently offer vis-à-vis what we can. For example, in Kenya, there is about seven to eight different services or solutions that we offer. In Uganda, there is perhaps only two. So how do we increase what we offer in Uganda? In Rwanda, we are an insurance broker. We are just about to receive our license to offer pensions administration. In Tanzania, we are a pure actuarial services player at the moment, but we are hoping to get an insurance broking license. In Nigeria, we are an actuarial services provider and we have an insurance broking license that is dormant. We want to activate that, but we are also looking to see how we can offer an outsourced administration solution to a pension fund administrator there. DRC has just recently become part of the East African community. There is a huge country population of over 100 million, and Kinshasa alone is about 18 million, so there is massive potential. In that scenario, we feel that our services would be well required and we believe that we can get a first mover advantage. Ghana is on our radar too. We have also looked at Zambia, as well as another huge dormant giant which is Ethiopia. Again, it is a huge country with a population growing very rapidly and it seems to be embracing market driven changes, so we hope to look at this country as well. Overall, in the next three years, we would expect to be in 10 African countries, offering a lot more in each of those countries.

Is Zamara Group going to finance this expansion or are investors coming in?

So far, all the expansion that we have done has been financed with our internal resources. Zamara has never borrowed in its history. But we are now at a stage where, if we are to look at some of these big ticket countries, particularly a place like DRC, we may need access to capital. The first inclination is to look at financing from our existing financiers: the banks. At an appropriate stage, we may need to see how to raise more capital, whether it is from our existing shareholders or inviting other strategic investors on board into Zamara. But it is definitely something that we will need to address in a not-too-distant future. We are also being very cautious about the pace of our expansion, because in the short space of five years, we have moved from one country to being in six countries. Other than the couple that we are looking at now, we feel that we will enter a phase of consolidation, deepening our presence in each of those countries.

What is your inspiration and philosophy in life?

I am very passionate, almost evangelical about getting people to save for their future. I spend a lot of my time talking to Kenyans and Africans about the importance of saving, showing them how easily it can be done and how it can benefit them. So that is a passion. I eat, drink and dream pensions. I have a very strong belief in our continent and the potential of our countries. And I really want to see how we can harness our own resources and change the course of Africa’s progress. I believe that the next two decades are for our continent, and I want to play an important part in addressing a side of that equation, which is to help harness our own resources by supplying that capital. So that is a key passion for me. As an individual, I do not subscribe to that old adage of “under promise and over deliver”. I always set the bar high and work towards it. No human progress can happen unless you set the bar high. I love what I do. My work is my hobby, and I love the impact of my work, both at the individual and national level.

ABOUT SUNDEEP RAICHURA: Sundeep Raichura is a qualified actuary and Group CEO of Zamara Group with over 30 years of experience in actuarial, pensions, and investment consultancy. He has been involved in and contributed to all aspects of the pension conversation in Kenya, ranging from pension reform, regulatory enhancement, product innovation, pension fund investments, and much more. He is the current Chairman of the Kenya Pension Funds Investment Consortium (KEPFIC).

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