PasarPolis

Affordable and accessible insurance for Southeast Asia

Industry:

Insurance

Region:

Southeast Asia

Website:

pasarpolis.io

30,000,000 0 +

Customers

50 0 +

Distribution partners

1 0 B+

Policies issued

PasarPolis is on a mission to make insurance accessible across Southeast Asia by underwriting and distributing tailored products for first-time customers via digital partner platforms and agents.

The Challenge

Indonesia, the largest economy in Southeast Asia, is home to almost 300 million people, over 40% of whom are aspiring middle class, living on between $3.30- $7.75 a day¹.

This rising middle class is also powering the broader economy. Indonesia is projected to be the world’s 6^th largest economy by 2027, with GDP set to grow at a rate of more than 5% next year, second behind only India². At a consumer level, digital spending is booming. Southeast Asia’s digital economy is projected to reach $100B in revenue this year³, led by Indonesia.

Despite its strong growth, Indonesia’s insurance penetration, measured as the ratio of premiums to GDP, remains low at 2.7%, compared with neighbouring countries like Singapore (12.5%), Malaysia (3.8%) and Thailand (4.6%)⁴.

This gap in penetration can be attributed to various factors including a lack of insurance literacy, with less than a third of the population understanding basic insurance products categories⁵. Trust in insurance companies is also low, in part due to perceptions of burdensome and overly complex paperwork, and unaffordable premiums⁶. As an example, applying for and claiming insurance in Indonesia is often a slow process, with claims sometimes taking months to process and even longer to be paid out⁷. For households with low spending power, these delays can cause significant financial stress.

Over the past several years, an increase in climate-change-related events, COVID-19 and other shocks have heightened people’s sense of vulnerability, spurring some growth in policies. Indonesia’s insurance industry has expanded by 8.67% on average over the past five years⁸, helped by a boom in digital financial services as well as increasing regulation. Indonesia is the only Southeast Asian country without compulsory Third-Party Liability insurance for motor vehicles but has laid out plans to introduce it as soon as next year. LeapFrog’s own Emerging Wealth and Health Index identified one in four emerging consumers planned to buy insurance in the next 12 months.

The country is also undergoing rapid urbanisation, and more than 70% of its population is expected to be living in cities by 2030, while more than 80% already use a smartphone daily. This presents significant opportunities for insurance providers, especially those companies that use technology to disrupt the traditional way of selling insurance.

1.World bank, Aspiring Indonesia – Expanding the middle class 2. OECD Economic Outlook, Interim Report September 2023 3. Google, Temasek, Bain & Company , e-Conomy SEA 2023 4. ASEAN Insurance Surveillance Report 2022 5. Roadmap for the Development and Strengthening of the Indonesia Insurance Industry 2023 – 2027 6. Tech in Asia, PasarPolis making insurance accessible in Indonesia 7. Roadmap for the Development and Strengthening of the Indonesian Insurance Industry 2023-2027 8. Antara News, Insurance industry has grown 8.67%: OJK

Insurance penetration of ASEAN countries 2022

PasarPolis' Solution

PasarPolis is a digital insurance company underwriting and distributing insurance to more than 30 million active customers across Indonesia, Vietnam and Thailand, many of whom are accessing insurance for the first time.

Founded in 2015, PasarPolis is Indonesia’s first full-stack insurtech, with the capability to control the end-to-end insurance value chain. The company is also a digital insurance broker that distributes embedded and modular insurance via partner platforms and provides a tech platform for agents to sell auto and property insurance.

The company has deep relationships with leading digital ecosystems in Indonesia such as Gojek, Tokopedia, and Xiaomi, giving it access to more than 100 million active users.Examples of the types of policies issued include short-term travel insurance, health and accident coverage for rideshare drivers and passengers, protection against damaged or missing products for small businesses and online shoppers, and insurance of mobile phones (a key productive asset for emerging consumers in Southeast Asia).

PasarPolis robust technology platform helps it to settle 97% of claims in less than 24 hours and provides the basis for it to deliver affordable products to even the most remote communities.

Approximately 40% of the company’s policyholders are informal sector workers such as drivers, couriers or small online businesses, and 60% live on less than $10 per day⁹. Its commitment to consumers includes a company-wide mandate to provide only products which are beneficial to consumers, and a prohibition against opt-out digital insurance models. With a team of data scientists and engineers stationed across India and Indonesia, PasarPolis leverages technology to help customers select highly customised products while keeping production costs low. This team also regularly reviews its product fit and will proactively discontinue products which are not receiving claims.

On average, one customer purchases up to four policies per quarter and nearly 60% of all policyholders purchase two or more policies per month.

9. Purchasing power parity

LeapFrog's Impact

LeapFrog invested in PasarPolis in September 2020 as part of the company’s Series B round, alongside Japanese venture capital firm SBI Investment, Chinese electronics maker Xiaomi and the venture arm linked to Indonesia’s technology platform Gojek.

Investing at such an early stage was atypical for LeapFrog. However, Pasarpolis’ innovative digital-first approach offered a unique opportunity for scale and impact.

PasarPolis has expanded rapidly since LeapFrog’s investment. Volumes have increased more than 7x and the platform has grown to include over 50 digital distribution partners and a new agency channel. Most importantly, LeapFrog has helped the company evolve into a full-stack insurance provider with a deeper talent bench, underwriting and actuarial expertise, stronger operations, and robust risk management processes. LeapFrog has also introduced the company to new investors and partners in Indonesia and more recently in Vietnam as the company looks to expand regionally.

LeapFrog is working closely with PasarPolis to create and underwrite new products related to device, automobile, health, property and life insurance. As a full-stack insurer, the company has control of the value chain and can adapt its products to its growing consumer base as it scales its impact across Southeast Asia.

LeapFrog’s in-house CX team has also worked alongside management to improve PasarPolis’ total loss damage product. The work resulted in a 25% uptick in policies sold and a reduction in claim turnaround time from 10 days to less than four. The CX team is also optimising the company’s agent app to improve productivity and retention.

LeapFrog’s efforts have contributed to PasarPolis’ increased social impact since investment. PasarPolis’ now reaches 35 million people, 21 million of whom are emerging consumers, a 2.6x increase . LeapFrog was instrumental in revamping the company‘s governance, including structuring the new Board and creating a management incentive aligned with stakeholder values. It has also supported PasarPolis to align to international ESG standards, such as implementing an ESG Policy and grievance mechanism and incorporating ESG considerations into its employee handbook and third-party vendor agreements.

PasarPolis reach growth since investment

PasarPolis

30,000,000 0 +

50 0 +

1 0 B+

The Challenge

Indonesia, the largest economy in Southeast Asia, is home to almost 300 million people, over 40% of whom are aspiring middle class, living on between $3.30- $7.75 a day1.

PasarPolis' Solution

PasarPolis is a digital insurance company underwriting and distributing insurance to more than 30 million active customers across Indonesia, Vietnam and Thailand, many of whom are accessing insurance for the first time.

LeapFrog's Impact

LeapFrog invested in PasarPolis in September 2020 as part of the company’s Series B round, alongside Japanese venture capital firm SBI Investment, Chinese electronics maker Xiaomi and the venture arm linked to Indonesia’s technology platform Gojek.

Learn more

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Indonesian digital insurer PasarPolis eyes Malaysia, Philippines

PasarPolis is now one of Indonesia's first full-stack insurtechs

ESG in Action - PasarPolis and LeapFrog

LeapFrog Investments release 2020 Impact Results

Expanding innovative insurance in a challenging year: PasarPolis