PasarPolis says its insurtech business is on the right track, thanks to big tech partners

In Indonesia — a very tough market to sell insurance products — the insurtech firm PasarPolis believes its strategy of piggybacking on big tech firms, and also roping them as investors, has been effective.

The company has forged ties with around 40 partners — ride-hailing giant Gojek, online marketplaces Tokopedia, Shopee, and Lazada, smartphone maker Xiaomi, and payments firm DANA to name a few — to sell a variety of insurance products covering health, vehicle, accident, property, travel, and life.

Crack-screen protection for smartphones, for instance, has become PasarPolis’s flagship product. It offers the service in partnership with Xiaomi, which is also its investor, and online marketplace platforms Shopee and Tokopedia.

Xiaomi was Indonesia’s top-selling smartphone brand with a market share of 28% in the second quarter of this year, according to technology market analyst Canalys.

“We see a potential market in device protection insurance. It’s still tiny — while most of the adult population has smartphones, only 3 million gadget users have device insurance in Indonesia. Our exclusive partnership with Xiaomi will anchor our device insurance rollout,” said PasarPolis founder Cleosent Randing in an exclusive chat with DealStreetAsia.

Xiaomi had participated in PasarPolis’s $54 million Series B round in September 2020 along with LeapFrog Investments, SBI Investments, Alpha JWC, and Intudo Ventures.

PasarPolis has also forged close ties with Gojek. The ride-hailing firm’s venture capital arm Go-Ventures invested in PasarPolis in July 2018 in a Series A round. Since then, PasarPolis has offered insurance products to millions of Gojek users and merchants through the GoSure feature, embedded in the Gojek app.

It had also partnered with Gojek-owned GoSend to provide insurance when customers send parcels on the logistics service. This business partnership has benefitted from the growth of e-commerce in the region, Randing had told Nikkei Asia last year.

PasarPolis also distributes its insurance products through Tokopedia and travel website Traveloka, and also, to a smaller extent, through offline agents.

Gojek, Tokopedia, and Traveloka had invested in Pasarpolis in 2018. At the time, Gojek founder and CEO Nadiem Makarim had said: “This strategic partnership with PasarPolis will support Gojek’s ecosystem where our driver-partners have the access to insurance with an affordable premium. Today, there are more than 250,000 of our driver partners who enjoy insurance programs offered by PasarPolis.”

Not many insurtech platforms have employed the strategy of partnering with big tech firms and embedding insurance products on their tech platforms. PasarPolis’s competitors such as Lifepal, Fuse, and Futuready, for instance, have chosen to become insurance marketplaces.

Fuse, backed by Jack Ma’s family office, works with agents to sell insurance products to end customers. It also has a microinsurance model through which it offers small-ticket insurance top-ups; a B2C insurance aggregator; and a financial institution model, where it teams up with multi-finance companies.

Explaining the rationale behind PasarPolis’s partnership strategy Randing said: “We want to pivot to building customer-centric insurance products that fit into the digital lifestyle of consumers. People in Indonesia never dream about buying insurance. They dream about living their lives.”

Low penetration, high potential

Insurance penetration in Indonesia has been stuck in low single-digits.

In June 2021, insurance penetration in the country stood at 3.11% — only a tad up from 2.92% in end-2020 — lagging behind Singapore, Malaysia, Thailand, and the Philippines. The lack of trust in insurers, consumer protection issues, and lack of financial literacy are among the factors behind the low adoption of insurance products.

However, given the pandemic-induced pick-up in investments in the fintech sector — digital wallets, P2P lending, wealth tech etc. — insurtech players, too, are hopeful that there will be some benefits from the overall interest in digital technology.

As on Sept. 25, twenty insurtech firms had cumulatively raised $510 million in Southeast Asia in 2021, according to DealStreetAsia DATA VANTAGE‘s SE Asia Private Capital Markets Report 2021.

PasarPolis’s management believes the potential of insurance is still huge.

“If you look at China, I think the whole of fintech and insurtech growth actually came with GDP growth. As the population becomes more wealthy, they move to the next level of needs — protecting investments and spending,” Wei Xiong Teo, senior vice president of strategy and product at Pasar Polis told DealStreetAsia.

GDP growth in Indonesia is projected to rise to 4% in 2021, following a GDP contraction of 2.07% in 2020. “Hence I think the inflection points will come very soon, but we are really at the early stage,” said Teo.

Established in 2015, PasarPolis started its journey as an aggregator of insurance products, but shifted to a B2B2C insurtech company after it launched the partnership with Gojek, becoming the first to launch microinsurance products in the market.

Expansion

PasarPolis launched in Thailand and Vietnam in 2019, expanding beyond Indonesia. It has applied the partnership strategy in these markets as well.

PasarPolis teamed up with e-commerce platforms Shopee in Thailand and Vietnam’s Sendo to sell insurance products.

This year, the company witnessed a five-fold year-on-year growth in revenue from its three markets, said Randing. He added that the firm has exceeded one billion insurance policies and reached more than 24 million customers — doubling from last year. 

PasarPolis also launched PasarPolis Mitra last year, an offline to online (O2O) approach, where drivers and gig workers can offer and sell insurance to customers. Currently, it has 60,000 mitras/partners registered in the app. Next stage, the company will continue investing in product/experience innovations, by partnering with more firms and providing frictionless purchases and faster claim settlements. 

The e-Conomy SEA 2021 report by Google, Temasek, and Bain & Co showed that insurtech is the fastest-growing digital financial service in Southeast Asia, behind lending. Gross written premiums (GWP) are expected to reach $9 billion by 2025 from $3.2 billion in 2021.

At the same time, the sector may undergo a lot of flux.

Indonesia’s Financial Services Authority (OJK) is preparing a regulation for insurance products and services that can be sold by digital insurance brokerage companies. Currently, OJK urges insurtech firms to sell only products that are easy to understand through digital channels.

Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.

Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.