A Sri Lankan architect who transformed one of Asia’s oldest insurers explains why the continent’s operators should stop listening to big consultancies
Insurance penetration in Nigeria sits at 0.3% of GDP. Kenya manages 2.7%. South Africa leads the continent at nearly 17%, but that figure is propped up by a mature pension industry that most African markets lack.
The conventional wisdom from global consultancies is seductive but dangerous: rip out your legacy systems, invest hundreds of millions in new platforms, and hope you survive the five-year implementation journey. For insurers operating in capital-constrained markets, this advice is not just impractical—it is a recipe for bankruptcy.
Indika Udaya Kumara has spent over a decade proving there is another way. As the software architect who led the digital transformation of one of Sri Lanka’s largest insurers, he oversaw the modernisation of systems dating back to the early 1990s—without the wholesale platform replacement that consultants typically recommend.
“The most successful digital transformations in emerging markets do not require abandoning legacy systems,” Kumara argues. “They require building intelligent integration layers that make those systems invisible to customers.”
His approach offers a blueprint for African insurers facing similar constraints. And he believes the continent is uniquely positioned to leapfrog competitors by adopting it.
The Integration Layer Approach
Most African insurers run on legacy core systems—platforms like eBao, TurnKey, or bespoke solutions built a decade or more ago. These systems process policies reliably, but they were never designed for the omnichannel, real-time experiences that mobile-first customers expect.
The mistake, Kumara explains, is thinking the core system needs replacing. It does not. What it needs is a translation layer.
“A well-designed integration architecture sits between customer touchpoints and legacy systems,” he says. “Customer-facing applications communicate with a unified API gateway that translates modern interaction patterns into the batch-oriented protocols that legacy systems understand. The customer sees instant quotations and same-day policy issuance. The core system processes transactions exactly as it always has.”
No migration risk. No three-year implementation timeline. No hundreds of millions in capital expenditure.
This is not theory. At the Sri Lankan insurer where Kumara served as lead architect, his team used this approach to transform a 30-year-old mainframe operation into a cloud-native platform processing over 10,000 API transactions per second. Policy approvals that once took days now complete in under 30 minutes. The work earned recognition from Celent, the global insurance technology research firm—rare acknowledgement for an emerging market insurer competing against far larger global players.
“Insurers across Asia have used this approach to achieve 40-50% premium growth while competitors were still stuck in multi-year platform migrations,” Kumara notes. “The same playbook applies to Africa—with one significant advantage.”
Africa’s Mobile Money Edge
M-Pesa processes over $314 billion annually. MTN Mobile Money, Airtel Money, and dozens of other platforms have normalised digital financial services for populations that never had bank accounts. Africa has already solved the hardest problem in financial inclusion: getting people comfortable transacting digitally.
Insurance has been slower to capitalise on this infrastructure than lending or payments, but the rails are already there. Nigerian insurtechs like Casava and Curacel are building API layers that connect traditional insurers to mobile-first distribution. Kenyan platforms like Turaco are embedding insurance into apps people already use.
“The opportunity for traditional insurers is to stop fighting these platforms and start powering them,” Kumara advises. “Become infrastructure, not competition.”
The Trust Problem Technology Can Actually Solve
Insurance penetration is not low simply because distribution is inconvenient. It is low because customers do not trust insurers to pay claims.
Nigeria’s motor vehicle claims ratio sat at 0.43 in 2016—insurers paid out less than half of what they collected in premiums. Customers notice. Cultural barriers compound the problem; in some communities, buying life insurance is seen as tempting fate, which is why savvy insurers have rebranded “funeral insurance” as “family protection plans.”
Technology cannot fix cultural resistance overnight, Kumara acknowledges, but it can fix the operational failures that destroy trust.
“Faster claims processing, enabled by integration layers that eliminate manual handoffs, turns weeks into days. Real-time analytics platforms flag fraudulent claims early, which means legitimate claims get paid faster. Customers who experience fast, fair settlement become advocates.”
At the insurer he transformed, claims processing times dropped by over 60%. Field agents equipped with mobile tools could resolve customer queries in real-time rather than submitting paper forms to the head office. The technology did not change the product—it changed the experience.
The Ecosystem Play
Kumara’s most counterintuitive advice for African insurers: stop trying to own the customer relationship.
“The winning strategy is not to compete with mobile money platforms but to become invisible infrastructure within them,” he argues.
The Nigerian market has seen early moves: GTBank’s Beta Health product with Hygeia, Zenith Bank’s partnership with Prudential, PiggyVest’s integration with Avon HMO. But these remain exceptions. Most insurers are still building their own apps, fighting for attention against WhatsApp, TikTok, and mobile money platforms that customers check dozens of times daily.
Embedded insurance—policies sold within banking apps, e-commerce checkouts, ride-hailing platforms—reduces customer acquisition costs to near zero. Policy persistence improves when premiums are debited automatically from the wallets customers already use. Data feedback loops from partner platforms improve underwriting accuracy over time.
“The technical requirements are straightforward: OAuth-based authentication, well-documented APIs, real-time premium calculation endpoints,” Kumara explains. “The hard part is organisational—convincing boards that invisible distribution beats branded apps.”
What Insurance Executives Should Do Now
Drawing on his experience transforming legacy systems across multiple insurers, Kumara offers four priorities for African insurance executives:
First, invest in integration architecture before customer-facing applications. “A well-designed API layer pays dividends across every subsequent digital initiative. This is not glamorous work, and it is hard to sell to boards focused on customer-facing innovation. But it is the foundation everything else depends on.”
Second, apply AI to operational problems with clear revenue impact. Lapse prevention, claims fraud detection, and underwriting automation all offer immediate ROI. “AI projects that do not connect directly to revenue metrics do not survive budget cycles,” he warns.
Third, partner aggressively with mobile money operators and banks. In markets where mobile wallet penetration exceeds traditional banking, embedded insurance is not just a distribution channel—it is the distribution channel.
Fourth, build internal technical capability. “Sustainable transformation requires teams who understand both business context and technical architecture. Outsourced implementations create dependency; internal capability creates optionality.”
The Path Forward
Africa’s insurance industry is at an inflexion point. Regulatory changes are forcing adoption—Nigeria’s compulsory motor insurance already drives nearly 30% of gross premium income. Microinsurance licensing is lowering barriers to entry, with capital requirements as low as ₦40 million compared to ₦2-10 billion for traditional insurers. A generation of customers who have never known life without smartphones expects digital experiences that most insurers cannot currently deliver.
Kumara, who is now exploring opportunities to bring his transformation expertise to the global market, remains optimistic about Africa’s potential.
“The insurers who thrive over the coming decade will not be those who spend the most on technology,” he predicts. “They will be those who most creatively bridge the gap between where their systems are today and where their customers need them to be tomorrow.”
The wrecking ball approach to legacy modernisation was always a luxury most markets could not afford. As Kumara’s track record demonstrates, it was also unnecessary.
