IFC Injects IDR 70.2 Billion of Fund to Startup PasarPolis
Insurance startup (insurtech) PasarPolis received funding of US$ 5 million or around IDR 70.2 billion from a global financial institution that is a member of the World Bank, the International Finance Corporation (IFC). The fresh funds will be used to expand services to micro and most vulnerable business groups in Indonesia.
PasarPolis CEO Cleosent Randing said the additional capital would be used for infrastructure development that connects insurance companies, digital platforms and customers. Mainly, people who have not been served by insurance.
“We want to create more affordable microinsurance products that can be accessed easily by various groups, including underprivileged people and those in remote areas,” Cleosent said in a press release, Thursday (4/2).
In addition, PasarPolis wants to expand its network in international markets. Then, increase competitiveness by leveraging partnerships to offer bite-sized and on-demand insurance products. Cleosent said, PasarPolis has provided protection products to around 30 million people, or 11% of the total population in the archipelago.
As many as 90% of them are groups of people who have never bought an insurance policy before. As many as 40% of policyholders are also informal sector workers, such as online motorcycle taxi drivers, couriers, and entrepreneurs of Micro, Small and Medium Enterprises (MSMEs).
The Demand for Shipping Insurance Increased in the Last Year
Last year, PasarPolis recorded that demand for shipping service insurance such as GoSend and GoBox increased 12 times. In addition, protection products for Gojek driver partners were purchased more than 200 thousand times.
The increase occurred because the use of e-commerce services surged during the corona pandemic. McKinsey estimates that 1.6 billion packages purchased on e-commerce will be shipped annually by 2022. This projection does not take into account changes in people’s habits during the pandemic.
Meanwhile, research by Facebook and Bain and Company also shows that digital consumers in Indonesia are expected to increase from 119 million in 2019 to 137 million last year. The percentage jumped from 58% to 68% of the total population.
IFC Country Manager for Indonesia, Malaysia and Timor Leste Azam Khan assessed that PasarPolis could support the mission. “Making insurance more accessible and affordable, especially for those who are underserved and live in remote areas,” he said.
Therefore, IFC invested in PasarPolis. This member of the World Bank does focus on the private sector in emerging markets, such as Indonesia. IFC also operates in more than 100 countries. Last year, IFC invested US$ 22 billion in private companies and financial institutions in developing countries.
Apart from IFC, PasarPolis previously received series B funding from LeapFrog Investments, SBI Investment, Alpha JWC Ventures, Intudo Ventures, and Xiaomi. The investment value reaches US$ 54 million or around IDR 796.5 billion. In 2018, PasarPolis also received series A funding from Gojek, Tokopedia, and Traveloka. Only, the value was not disclosed.
The Gap in Access to Insurance is Still a Problem in ASEAN
The gap in access to insurance is still a crucial issue in various ASEAN countries, including Indonesia, Vietnam and Thailand, especially considering that the penetration rate in ASEAN is still at 3.6%.
Responding to these challenges, PasarPolis, the leading insurance technology (insurtech) company in Indonesia and Southeast Asia, continues to strive to expand access to insurance more inclusively for all levels of society, including people in remote and underprivileged areas.
Now, after 5 years of operation, PasarPolis has been able to provide insurance protection to 11% of the Indonesian population or around 30 million Indonesians. This is a positive achievement, amidst insurance inclusion in Indonesia which has only reached less than 4 percent.
Market focus Polis to continue to encourage insurance penetration in ASEAN has again attracted the attention of leading institutions in the world. This time, the International Finance Corporation (IFC), a financial institution under the auspices of the World Bank that focuses on accelerating financial inclusion and literacy in developing countries, officially joined as a PasarPolis investor.