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PasarPolis is looking to expand its presence across Southeast Asia with a focus on Vietnam and Thailand in 2021.
Indonesia-based insurtech startup PasarPolis has raised US$5 million in equity finance from International Finance Corporation (IFC), the startup announced yesterday. IFC is a sister organization of the World Bank, and a leading global development institution focused on the private sector in emerging economies.
The latest funding comes after PasarPolis raised $54 million in Series B financing six months ago. The startup will leverage its strategic collaboration with IFC to increase insurance inclusion through the development of affordable micro-insurance products, the press release noted.
The statement added that the startup already provides 80 active products that are specially designed to meet the needs of consumers from disadvantaged backgrounds.
IFC’s Country Manager for Indonesia, Malaysia and Timor-Leste, Azam Khan said, “At IFC, we are excited to make this investment in PasarPolis, Southeast Asia’s largest insurance technology platform that is gearing up to expand its digital distribution channels, making insurance more accessible and affordable especially for the underserved and those living in remote areas.”
Founded in 2015, PasarPolis claims to currently serve 30 million customers, or 11% of the Indonesian population. According to the press statement, 90% of PasarPolis consumers are first-time buyers. It added that 40% of PasarPolis policyholders work in the informal sector, including in ride-haling services, courier services, and online micro, small, and medium enterprises.
The startup focuses on offering customized insurance products through its scalable AI-powered platform. PasarPolis claims that its platform offers easy on-boarding, product creation flexibility, and a claims portal for policy holders that notifies customers when their policy coverage can be claimed.
“PasarPolis’ technology is designed to provide the best end-to-end experience for consumers, from the product selection process to the claims process,” PasarPolis Founder and CEO Cleosent Randing said.
Southeast Asia’s Wide Insurance Gap Offers Endless Opportunity
In 2018, the non-life insurance penetration in the Asia-Pacific (APAC) region was only 2.1%, according to Ernst & Young estimates. The property and casualty insurance protection gap in APAC amounted to $126 billion in 2018. In the ASEAN countries, the ratio of non-life insurance premiums to GDP is at 1%, less than a third of the global average.
In Indonesia, the insurance penetration rate in 2018 stood at 2.77%, according to figures from the General Insurance Association of Indonesia (AAUI).
This wide gap in insurance protection presents a lucrative opportunity for insurtech in Southeast Asia. PasarPolis plans to increase insurance penetration and literacy across Southeast Asia, with a focus on Vietnam and Thailand in 2021, the statement noted.
“From an industrial point of view, Vietnam and Indonesia have similar criteria for the insurance market, although awareness of insurance in Vietnam is still relatively low compared to Indonesia, or Thailand, which is maturing fast,” Randing noted.
Fernanda Lima, Partner at LeapFrog Investments, an existing investor in PasarPolis said, “With 30 insurance companies, and 25 digital partners, together serving millions of new customers last year, the opportunity for PasarPolis to expand its offering and geographic reach is extraordinary.”
PasarPolis counts Xiaomi, Traveloka, Tokopedia, GoJek and other well-established players among its investors. Its two main competitors are Jakarta-based Qoala and Singapore headquartered Grab Financial Group.
Header image courtesy of PasarPolis