PasarPolis could reshape the Indonesian insurance market
Founded in 2015, PasarPolis has established a reputation for customer-centric operations fused with a technology-driven outlook. It currently creates over two million new policies each day and takes an average time of just 18 seconds to process claims.
A rising trend in the insurance industry, microinsurance can be a cheap and effective safety net for those who could typically not afford regular insurance premiums. It is the development of digital technology that has enabled this trend to grow, and PasarPolis’ simplified interface could see its popularity within Indonesia increase significantly.
A recent by Bloomberg stated that Cleosent Randing, CEO of PasarPolis, was seeking to use the generated capital to develop the company’s AI (artificial intelligence) capabilities, which would enable policies to become more bespoke and therefore more accomodating to customers’ unique requirements.
“Some big insurance companies are more than a hundred years old and there hasn’t been a lot of innovation in the industry,” he said.
“As Amazon is building innovation against the likes of Macy’s, we want to ultimately make insurance a delightful experience where you don’t need to make claims but they will be made automatically.”
This innovative thinking will be crucial to developing the Indonesian insurance market; a study by found a large-scale problem with ‘insurance literacy’ among the population, with a mere 15.8% of adults reportedly familiar with the concept.
The same study found that a general lack of digital and financial literacy, combined with an ingrained mistrust of domestic financial institutions from the , amounted to a malaise in the Indonesian insurance market.
However, with 43% of the population now officially above the poverty threshold, companies like PasarPolis, which pride themselves on a simplified, affordable and fast-paced level of service, could finally win over the public and reshape the industry accordingly.
Global investment in insurtech reaches all-time high
Global investment in the InsurTech sector reached an emphatic record during H1, 2021, as half-year funding of US$7.4 billion exceeded full-year investment in 2020, and in every other year, according to the new Quarterly InsurTech Briefing from Willis Towers Watson.
It was found that the latest quarter saw 162 deals yield more than $4,824 million in investment, a 210% increase over Q2, 2020. The enormous quarterly total, itself more than any annual total before 2019, was driven largely by 15 mega-rounds of $100 million or more. Collectively, these deals reached $3.3 billion, or two-thirds of total funding during the quarter. The money was raised predominantly by later-stage players seeking expansion.
A need for the insurance community to reflect digital changes
Series B and C fundraisings drove a large number of deals in the second quarter, but the number of early-stage deals also increased. They were up by more than 9% from the previous quarter, and 200% from pandemic-stricken Q2, 2020. As a percentage of overall deals, early-stage activity held roughly steady, at 57%.
InsurTechs focused on distribution accounted for 55% of start-up deals, and for 10 of the 15 mega-rounds. Most of the distribution InsurTechs target reduced dependence on agent channels. Of all Q2 deals, 73% were for P&C-related InsurTechs, while 43 companies raised funds for L&H technology. Funds were raised by companies from 35 countries, including new entrants Botswana, Mali, Romania, Saudi Arabia, and Turkey.
Dr. Andrew Johnston, global head of InsurTech at Willis Re, said: “As technology changes our lives, society will demand an insurance community that reflects and supports our changing, digitally empowered behaviours. Consumers and businesses increasingly expect insurance to be delivered when and how they want it, and risk carriers that fail to respond will fall away over time. To embrace technology is a minimum survival condition. Those that use it to redefine service in the insurance world will thrive. That means a positive future for InsurTechs that bring a truly differentiated business approach to our industry. Some of them will create untold long-term opportunities for themselves and the insurance sector.”