Not just any company can attract simultaneously the nation’s three largest unicorns to a strategic partnership, but that is exactly what Pasarpolis achieved: a series-A funding of estimated $5-8 million investment from Go-Jek, Tokopedia and Traveloka. Starting as an insurance comparison site, Pasarpolis has grown into an insurance technology (insurtech) startup offering microinsurance. The aim is to solve the protection gap by focusing on middle-to-lower income market through affordable insurance.
“Our mission is to maximize technology in democratizing protection to everyone, providing microinsurance and educate the importance of insurance among Indonesians. We are really redefining insurance by making it very simple and convenient for customers,” says Cleosent Randing, 31, Founder and CEO of Pasarpolis.
He founded Pasarpolis in 2015 after noting the low penetration and awareness of insurance in Indonesia. Thus, the company’s tagline of ‘insurance for all’.
Pasarpolis simplifies insurance claims processes using technology and invites people – particularly the middle-to-lower classes – to have better access to insurance. It is believed that people here shun insurance as they perceive it as being complicated and expensive. With the low insurance penetration rate in Indonesia at only 2.9%, Pasarpolis sees huge growth potentials in the sector. The products offered are tailored to cater to various needs of both customers and merchants across Pasarpolis’ ecosystem partners. For example, some popular ones are lifestyle products which include shipping returns, extended warranty, and purchase protection on e-commerce. Meanwhile for Go-Jek, protection is also available to the drivers and their belongings ranging from jackets, helmets, phones, and even customers’ food in case of an accident.
Another is travel insurance claim for flight cancellation on airlines/online travel agency (OTA). In partnership with Citilink, it insures up to one million passengers per month. Upon filling up the online flight form, one needs only to tick the insurance option provided below, which is priced as low as Rp 25,000, to have themselves registered. In a situation where a flight is delayed, the news will be sent from the responsible airline’s system to Pasarpolis’, which will then trigger an SMS/email notification sent to the claimant’s phone along with fund compensation. The instant process therefore conveniently eliminates the tedious traditional way of reporting and submitting claims and waiting for weeks to receive the refund.
Pasarpolis allocates the bulk of the unicorns’ investment for two main purposes. Firstly, to provide simple claim services that can cope with the speedy system of notifications for numerous customers as well as utilizing their big data to help insurance partners operate better. Secondly, to have more ecosystem partners with the aim to grow from the current number of 10 to 30 by the first quarter of 2019. In the larger scheme of things, it shows how insurtech can help address the socio-economic barriers of insurance, create valuable opportunities for ecosystem partners, and at the same time satisfy customers.
Currently, Pasarpolis is working with 30-40 traditional insurance companies. Even though Pasarpolis takes much lower fees compared to what insurance agents normally get, the scheme works well for both parties.
No agents will talk and offer Rp 5-10 million insurance policies to underinsured people like low-income Go-Jek drivers or farmers. By using Pasarpolis’ technology, however, these people can now have access to insurance. So, it does not alter nor replace the role of insurance agents. Rather, it improves the accessibility of insurance to more people.
By the second quarter of 2018, Pasarpolis already has 1.25 million customers, which is a 400% rise from around 200,000 customers in the second quarter of 2017, 250,000 of whom subscribe voluntarily from the strategic partnership with Gojek by paying an average of Rp 7,500 every month. Thanks to nearly 90% digitally handled claims management, Pasarpolis can reduce its overhead and operational expenses significantly. More potentials are to be gained from every single transaction of their partners such as Traveloka, Tokopedia, and JD.id as they have around 200 million insurable hits monthly.
Pasarpolis is also working with government-run social security BPJS as its only online partner where people can register or pay for the product through provider Telkomsel, where subscribers can pay using e-money T-Cash. It is also in discussion with national airline Garuda Indonesia on the same issue.
Encouraged by being the largest insurtech in Southeast Asia and following in the footsteps of Go-Jek’s expansion in the region, Pasarpolis has established offices and partnered with local insurance companies along with local ecosystem partners in Thailand and Vietnam, which allows them to target and service the market better. They plan to start operating by this month.
Looking ahead, Cleo believes that as digital businesses are on the rise here, it is only a matter of time before Indonesia will be on a par with China: around one-fifth of its population is insured and that insurtech makes most of its revenue from e-commerce. For example, Zhong An, which is backed by three giant Chinese technology companies, has a market capitalization of $18 billion. This is why the role of ecosystem partners is important, forcing Pasarpolis to be selective in seeking partners. From the recent investment, Pasarpolis will be able to learn how the unicorns’ have been servicing their ecosystem and thereby adding more services beneficial to potential customers.
“In other markets except Indonesia, most ecosystem partners have insurance technology. So, the challenge now is to educate ecosystem partners like the OTA and e-commerce to understand the value of insurtech that can drive customer satisfaction and increase revenue, and at the same time also enable us to deliver more insurance to people,” says Cleo.