Indonesia-based insurtech startup PasarPolis today announced that it has raised US$5 million in equity finance the International Finance Corporation (IFC), a part of the World Bank Group that focuses on accelerating financial inclusion and literacy in various developing countries.
The investment was the first that IFC has made in the insurtech vertical in Indonesia.
In a virtual press conference, PasarPolis Founder and CEO Cleosent Randing explained that the funding round was not considered as part of the Series B funding round that the company has announced in September 2020. It was also not considered a Series C funding round.
“We see this as a strategic partnership as it involves more than just funding … We are working together with world-class partners to achieve our mission,” he said.
PasarPolis and IFC stated that it will jointly continue and strengthen PasarPolis’ mission to democratise insurance more broadly, one of which is through the development of micro-insurance products that are affordable and in accordance with the needs of the society.
PasarPolis also aims to use the funding to support its mission to increase insurance penetration and literacy across the region, including Vietnam and Thailand in 2021.
“From industry point-of-view, Vietnam and Indonesia have similar characteristics in its insurance market, though Thailand has a relatively higher awareness of insurance. There are many things that we have done in Indonesia that we can implement in these countries,” Randing said.
In a statement, PasarPolis said that around 30 million users –or nearly 11 per cent of Indonesia’s population– have purchased insurance protection from the platform. The startup considered it as a “remarkable feat” as the country’s general insurance penetration rate is still less than four per cent.
It also noted that 90 per cent of its users are first-time buyers of insurance products with 40 per cent of policyholders are workers in the informal sector.
According to Arif Baharudin, Assistant of Minister for Financial Services and Capital Market Policy and Regulation at Indonesia’s Ministry of Finance, the low penetration rate of insurance products provides plenty of room to grow for insurance companies.
“In the future, the growth of insurance will be driven by social insurance,” he said during the press conference with PasarPolis.
He pointed out several reasons that prevent financial inclusions in Indonesia –from financial literacy, access to financial services, to consumer protection.
“Digitalisation plays a crucial role in tackling these challenges,” he stressed.
Founded in 2015, PasarPolis announced an oversubscribed US$54 million Series B funding round from investors that include LeapFrog Investments, SBI Investment, AlphaJWC, Intudo Ventures and Xiaomi.
Its existing investors, including Go-Ventures, also took part in the round.
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