How Insurance Tech is taking over Southeast Asia
Southeast Asia arrived late to the digital commerce party but is making up for it now. A massive shift to mobile, begun during the COVID-19 lockdowns, is driving consumer behaviour and online transactions within the region. It’s good for the digital economy and a huge opportunity for digital insurance and insurance tech companies.
Insurtech businesses are enterprises that straddle the worlds of insurance and technology. Their tech-powered offerings are designed to simplify the insurance experience. Southeast Asia could be an interesting space for insurtechs to test out their solutions for two main reasons:
Market size: India and the Southeast Asia region have a combined population of two billion (Source: SwissRe).
Underpenetrated market: Traditional insurance carriers have failed to make much headway in terms of market penetration. It’s time for insure tech players to give it their best shot.
A few additional factors will play into the hands of insurance tech companies:
The region’s fast-growing middle class could number 350 million in 2022.
The middle class has a substantial disposable income—USD 300 billion according to one estimate (Source: The Fintech Times).
One drawback is that average internet penetration in the region is middling. Current estimates put the internet penetration rate at 54%, well under 71% for China and 89% for the US (Source: SwissRe). But these are early days, and there’s no question that digital adoption is on the growth path. That means the time is ripe for insurance tech businesses like Turtlefin to jump in and disrupt the risk protection space in the Southeast Asia region.
A new model for policy distribution
Although customers today are accustomed to buying policies separately, that extra step has never felt seamless. If anything, complexity rises when the buyer shops through a digital insurance platform. With no agent to provide guidance, the customer must wade through the insurance jargon on their own, compare a series of nearly identical-looking policies, and decide what constitutes sufficient coverage for their needs.
None of this comes easy, which may explain some of the resistance to buying insurance online. But thankfully for customers, the old insurance platform is evolving. Artificial intelligence (AI), machine learning (ML), application programming interfaces (APIs), and data analytics are central to the new distribution model.
Consider a hypothetical digital user, Anita, who is shopping for a smartphone on an eCommerce website. After comparing the specs of many smartphone models, she makes a selection and heads to the digital checkout. The platform instantly generates an insurance offer tailored to the new smartphone. This automated offer promises comprehensive damage protection at a reasonable premium. If Anita accepts the deal, she can pay for the smartphone and the insurance in a single transaction and get a fully insured smartphone straight out of the box.
This is insurance taken directly to the customer in their time of need. It’s what insurtechs like Turtlefin are trying to achieve by embedding insurance plans into a range of transactions.
More intermediaries, more insurance: The Turtlefin way
Turtlefin is an India-based insurtech enabler that works over a dozen banks in India and the Middle East. The company supports insurance intermediaries to create a smooth digital experience for customers.
How intermediaries gain: By partnering with Turtlefin, insurance intermediaries can remove the complexity from their customers’ insurance purchase experience.
New vertical: Turtlefin converts the online sales channel of a partner business into a digital insurance platform. Now, the partner can sell insurance online, offering products from over 30 insurers, without shifting focus from their core business.
Expedited processes: A simplified insurance platform minimises the workload for personnel and improves turnaround times. Staff can select the best plans for customers, manage data, and carry out other back-end processes without any lags.
Sales training: Interactive learning tools enable intermediaries to level up their sales team. Partners can design their own compliance courses and get certified online through Turtlefin’s interactive platform
How customers gain: Customers no longer have to go out looking for insurance that suits their requirements. Insurance goes where the customer is.
Convenience: Any digital transaction becomes an opportunity to buy insurance. Customers could view and compare offers while banking or shopping online.
Relevant: From travel insurance, while booking flight tickets to asset insurance while buying furniture, Turtlefin’s insurance API introduces tailored offers at the digital checkout.
Easy onboarding: Verification and enrolment is completely streamlined. When the customer accepts a policy offer, onboarding happens digitally through a single interface.
Big Opportunities Ahead:
Things are getting interesting in the insurance space. A recent survey conducted in the Southeast Asia region noted that over 40% of consumers would prefer shopping for insurance via online channels (Source: SwissRe). As online penetration grows and new generations of digital natives reach adulthood, these numbers are bound to increase.
With insurtech companies like Turtlefin opening the doors to experimentation, the focus is on designing easily embedded products and creating frictionless customer experiences. The various markets that makeup Southeast Asia will each have different coverage requirements, of course. Nevertheless, digital insurance that is accessible and affordable will show the way forward throughout the region.