Sparkle Plans Digital Distribution of Insurance by 2021

By Adedapo Adesanya

Sparkle, the Nigerian start-up that was founded by Mr Uzoma Dozie, is planning to move into digital distribution of general insurance products next years.

This was confirmed to the Africa Report by the former Diamond Bank CEO. Sparkle was granted a banking license by the Central Bank of Nigeria (CBN) this year.

Initially, Sparkle was launched for users to be able to split payment, make utilities and bill payments and also save their money, but with its banking license, it also plans to start offering consumer and small business loans at the end of the first quarter of 2021.

According to Mr Dozie, Sparkle has an in-country insurance partner but added that regulatory approval will be needed and the partner may need to upgrade their systems.

The company’s CEO believes that the platform will be able to take on the challenge of insurance penetration, which contributes only 0.3 per cent to the economy, making the country lag behind its continental peers.

According to him, the solution is due to fears that insurance claims will not be paid, adding that “cumbersome and complex” sign-up processes involved is also responsible for the low number.

“We haven’t democratised insurance,” Mr Dozie noted, explaining that, “People don’t understand it on a basic level. What am I paying for?”

He argued that the existing infrastructure cannot solve the problem. This indicates that he will be offering the Sparkle platform to roll out services while trying to solve the pre-existing inclusiveness problem.

The company has just signed a deal with Visa under which its customers will have greater freedom and flexibility in how they make payments. For instance, they can make in-app payments with the embedded Visa virtual card, and make e-commerce payments with the virtual card or with Visa-branded companion plastic cards attached to their Sparkle profile.

Sparkle customers will also benefit from a range of other digital payments initiatives from Visa, for example, by scanning the interoperable EMVCo Quick Response (QR) code or just entering an Alias such as phone number or merchant till number to pay for goods at merchant outlets.

The deal will also allow customers to receive cross-border remittances from family and friends who are Visa cardholders into their Sparkle account.

“Our partnership with Visa will bring a wide range of benefits to Sparkle’s customers, individuals, entrepreneurs and SMEs. We are excited to work with Visa as we strive to re-define e-commerce by removing barriers to business using technology and data.

“Working with a global partner like Visa allows us to deliver a bespoke and personalised service for our customers by tapping into large networks so they can fulfil their full potential,” Mr Dozie said.