Can insurtech plug Thailand’s billion-dollar insurance gap?
- Product agility, customization, and ability to keep costs low are why insurtech might be the salvation of Thailand’s insurance sector
Insurtech startups entering the Thai market have the potential to offset a stagnant insurance market in the country, injecting fresh momentum by filling opportunity gaps and driving efficiencies via the use of technology.
The digitized service offerings from certain insurtech can also provide versatile, agile protection to customers in ways that traditional insurers might struggle to deliver. A case in point might be the Southeast Asian startup Igloo, which has just sealed up a partnership with food delivery outfit Foodpanda Thailand.
Igloo, a full-stack insurtech firm based out of Singapore will offer Foodpanda Thailand delivery riders a comprehensive insurance coverage plan called PandaCare. Pandacare coverage is specialized for Foodpanda’s last-mile riders and will feature motor vehicle insurance from MSIG Insurance (Thailand), personal accident insurance from Cigna Insurance, along with daily hospitalization income protection from Tune Insurance.
Igloo capitalizes on big data, dynamic risk assessment software, and expedited claims management tools to provide partners with more expansive distribution networks and allows consumers access to customized insurance solutions.
The firm says it is the first full-stack insurtech to emerge from Singapore, where there is a lively environment for digital insurers. Originally known as Axinan, since 2016 Igloo’s insurance products have covered over 15 million customers and over 50 million transactions in the past 12 months alone.
Providing coverage for delivery riders addresses the changing risk environment in the months after the pandemic. People are eating out less, and this is contributing to a rise in demand for deliveries, with the Kasikorn Research Center projecting that food deliveries in Thailand will see massive growth this year – upwards of 84% compared with the same period last year.
Igloo’s bespoke insurance solutions will provide protection for the riders as their risk profiles go up with the hike in delivery demand. Leveraging its technological capabilities, Igloo is able to deliver operational efficiencies and lower costs for its insurance partners. These savings are then passed on to the consumers through competitively priced products.
The entry of Igloo, plus other local insurtech players like AI-powered insurtech startup Sunday, could perhaps help reinvigorate the Thai insurance sector that appears to have stalled. The industry has shown flat growth in the last two years, with total direct insurance premiums in 2019 equaling about the same amount as 2018.
The country’s insurance penetration rate at the time stood at just 1.7% of the market, and the relative cost of its insurance gap represented 0.3% or US$1.5 billion of its GDP – placing Thailand among the top 25 countries with the most significant insurance disparities in the world.
Igloo Thailand’s country manager, Chancharas Chantarakarn, hopes that relying on its competitive advantages like data-driven understanding of the customer experience and affordable pricing plans will help grow the adoption of insurance in Thailand.
“Our end to end management of the customer journey on a single platform – from policy activation to claims filing and management – enables us to provide a highly elevated customer experience. Also, customer-centricity is at the heart of the solutions we build,” she said. “Our motor, personal accident, and hospitalization income protection products have been carefully developed to address the daily risks created by the increased demand for food delivery.”
These specialized insurance products are not the only ones Igloo will be introducing this year either, as new product additions are constantly being made to stay relevant to market needs. In the latter half of 2020, Igloo will be introducing new products that cover single disease, home, business, internet security, e-wallet, and even pet insurance to its product portfolio in Thailand.