The Role of Insurtech to Democratize Insurance Services

In the long run, insurance services are often associated with negative feedback. Complicated and expensive are probably the two things that most often attach to the stigma of insurance services in Indonesia. It's no wonder that insurance penetration in Indonesia is still around 2%.

This reality also hits PasarPolis when starting its business as an insurtech. PasarPolis' Founder & CEO Cleosent Randing said that this challenge was the company's foothold in the process of democratizing insurance services.

How can insurance be free from the bad stigma that has stuck for so many years? How can insurtech have great prospects in facilitating access to insurance products to the wider community? Cleo shared his knowledge and experience as the founder of PasarPolis in this #SelasaStartup session.

Insurance service democratization

Cleo explained that democratizing insurance services means that more people can access insurance products to ensure safety feeling. The key is in access. The high price of insurance products and the purchase claim process are examples of barriers to this access.

In fact, according to Cleo, the safety offered by insurance products is very important. The most common example is when the head of the family or a family member who acts as a provider falls ill and has to be hospitalized.

The costs incurred for treatment and medicine will certainly not just a penny. One incident is enough to shake a family's economy. That's where the role of insurance is so important. However, as we all know, these obstacles put insurance as a necessity in Indonesia.

"In an outline, it is how we use technology to reduce prices or costs for someone to get a sense of security," Cleo explained.

Insurtech has this ability. Technology allows insurtech players to open as wide access as possible to more people and reduce the price of insurance products to a level that can reach all levels of society.

PasarPolis way to create access

It is true that insurance penetration in this country is quite low. However, at the same time, the potential to develop in the industry is wide open. Cleo claims that PasarPolis is currently able to sell policies 60 times more than in their early years of operation.

"We are currently selling about 50 million policies a month," he added.

One of the main strategies for PasarPolis is to collaborate with large partners to sell insurance products. Call it Gojek, Tokopedia, to Traveloka.

The third one is investors and business partners of PasarPolis. They have a few millions of users. This strategic partnership is a shortcut in boosting insurance product sales.

However, Cleo admits that numbers such as users are not their only factor in determining collaboration. The similar vision and mission, the added value provided to consumers, and the use of technology are also considered. Cleo admitted that his team was quite selective before deciding to partner with others.

Technology is indeed playing quite a role in the effort to popularize insurance products to the wider community. PasarPolis practices this by creating insurance products at low prices and accessible on other platforms. An example is Go-Sure, as their collaboration with Gojek. Also, it is more often seen on Tokopedia. Every time you make checkout at Tokopedia, a small box will appear that allows prospective buyers to choose whether the items spent are insuranced or not.

Looking for more opportunities

PasarPolis also operates in Vietnam and Thailand. With more or less the same market conditions in Indonesia, PasarPolis draws a similar strategy: cooperating with the main digital platforms and offering affordable insurance products.

However, the pandemic is likely to encourage PasarPolis to find more maneuvers. With the current condition that demand for health products in all lines continues to increase, public awareness of the importance of having insurance has also increased.

"For example, people are going across region such as Surabaya or other provinces, there must be protection from Covid-19, and as we see it is still rare in Indonesia. We can see how we can provide a value proposition to the community," Cleo concluded.

–Original article is in Indonesian, translated by Kristin Siagian