Interest in Thai Insurtech Sector Picks upby Fintech News Singapore March 2, 2021
Interest in Thailand’s insurtech sector is picking up, with companies in the space closing million dollar funding rounds, incumbents ramping up digital capabilities, and foreign companies entering the market.
So far, 2021 has seen two Thai insurtech companies securing funding. The two Series A rounds were closed by Muang Thai Broker (US$6.7 million), the operator of online insurance comparison platform and sales platform Gettgo, and AppMan (US$4.6 million), the operator of AgentMate, an electronic point-of-sale (POS) that digitizes the sales process of life and non-life insurance.
AppMan, one of Thailand’s insurtech pioneers, said it will use the proceeds to expand and develop innovative technologies in the Asia Pacific (APAC) region, including artificial intelligence (AI) for insights screening for insurance and financial services incumbents.
Founded in 2011, AppMan has since expanded across Southeast Asia, opening offices in Ho Chi Minh City, Vietnam, and Jakarta, Indonesia.
Muang Thai Broker (MTB)’s US$6.7 million Series A funding round came from parent company Muang Thai Group Holdings (MTGH).
MTB, the only MTGH subsidiary authorized by Thailand’s Office of Insurance Commission (OIC) to sell both life and non-life insurance products, launched Gettgo in 2018 in response to the increasing role of technology and digital platforms in the insurance industry.
MTB said it will spend the capital injection on improving its distribution platform and developing omni-channels to help customers gather information and easily make comparisons between complex insurance products.
Insurtech regulatory sandbox welcomes new participant
Over the past years, the Thai insurtech industry has been supported by regulators which view technology as an enabler for financial inclusion.
Earlier this month, the OIC welcomed another insurtech project to join its regulatory sandbox program: a pay-as-you-drive insurance product developed by insurance firm Mitsui Sumitomo Insurance Group (MSIG) Thailand and mobile leader Advanced Info Service (AIS).
The product, known as Prakan Kubdee (Good Driving Insurance), calculates premiums from real driving behavior, gauging five key factors: distance, speed, journey time, time of the day driven and areas driven. It uses an Internet-of-Things (IoT) device attached to the vehicle’s on-board diagnostic (OBD) port to capture more in-depth, accurate data than a smartphone app would. Data are transmitted through the AIS network to MSIG’s cloud-based system where they are processed.
The offering also comes with digital payment capabilities from the AIS digital payment gateway system, MPay One, allowing for a more convenient, digital experiences, said Alistair David Johnston, managing director of new business at AIS.
The idea for Prakan Kubdee emerged during the global pandemic, Rattapol Gitisakchaiyakul, CEO of MSIG Thailand, said, noting that COVID-19 has forced incumbents to innovate and adjust to “the new normal.”
With Prakan Kubdee, customers can save up to 50% on their motor insurance premiums and receive 24-hour customer support, MSIG said, adding that research has shown that up to 60% of drivers have never been in an accident and have good driving behavior but still end up paying the same premiums as rickers customers.
Promoting innovation in the insurance sector
The OIC launched its insurtech sandbox in 2017 after establishing the Center of Insurtech Thailand for research, technological exchange and insurance product development. The sandbox allows insurance firms and tech firms to beta test their insurtech innovations.
Dr Suthiphon Thaveechaiyagarn, the OIC’s secretary general at the time, said in an interview with Asia Insurance Review that policy makers were “more than ready to amend our regulations if it will yield higher benefits to society,” showcasing willingness to increase digitalization in the sector.
Before these key initiatives, Thailand was already home to several insurtech startups that provided a wide range of services from distribution channels and sales support, to claim handling.
Sunday Insurance is perhaps one of Thailand’s most notable insurtech players. Founded in 2017, Sunday uses machine learning (ML) algorithms to provide customers with a broader range of policies, covering properties and possessions, with highly customized premiums.
Sunday raised US$9 million in a pre-Series B bridge round in September 2020 which it said it would use to grow in its home country, expand to Indonesia and develop its Sunday Service app with health and motor insurance products and services.
Foreign tech startups eye Thai market
Though still relatively small, the Thai insurance sector has grown rapidly over the past years with still plenty of opportunities for players to tap into.
Between 2008 and 2017, gross premiums written grew at an average annual rate of approximately 16.9%, substantially above nominal GDP growth of 9.9% during the same period, according to a 2019 assessment by the International Monetary Fund (IMF).
As the result, the insurance penetration ratio (the ratio of premiums written to GDP) gradually increased from 3.63% in 2008 to 5.39% in 2017.
Several overseas insurtech have expanded to Thailand to capitalize on the opportunity. Singapore’s Vouch Insurtech teamed up with six Thai insurers in 2018 to launch a digital insurance platform in Thailand called FairDee.
Igloo, another insurtech startup from Singapore, recently announced a partnership with Foodpanda Thailand to provide delivery riders with a comprehensive insurance coverage plan.
Formerly known as Axinan, Igloo raised US$8.2 million in April 2020 to broaden its foothold in Southeast Asia. In addition to Singapore and Thailand, Igloo operates in Vietnam, the Philippines, Indonesia and Malaysia.