NTUC Income, a Singapore composite insurer, said Thursday it has made its first overseas foray into three Southeast Asian markets through strategic partnerships with PT Central Asia Financial (JAGADIRI) in Indonesia, Post and Telecommunication Joint Stock Insurance Corporation (PTI) in Vietnam, and VSure Tech Sdn. Bhd (VSure) in Malaysia.
These strategic alliances are built on Income’s Insurance-as-a-Service (IaaS) model that enables the company to bring digital-first insurance business models to partners overseas, enhance their speed-to-market, and equip them with the right capabilities and tools to capture new customer segments and revenue streams, NTUC Income said in a statement.
Partners will also be able to leverage Income’s strong brand reputation and track record in digital product innovation to support market roll-out, as well as its technology know-how and connectivity with digital ecosystems for greater agility to innovate at scale to meet consumers’ changing needs.
Since the start of the COVID-19 pandemic, 70 million people in Southeast Asia have become digital consumers and are making online purchases more than before. Almost 80 percent of the population in the region is projected to become digital consumers by end of 2021, signaling strong demand for digital consumption in the region.
The market size for digital insurance is also projected to reach $7.6 billion by 2025, with digital financial services taking off in Southeast Asia in a way that is exciting for both consumers and businesses. More significantly, the acceleration of digital consumption is showing no signs of abating, with nine in 10 new digital consumers intending to continue using digital services in the future.
“Our foray overseas opens a new chapter of growth for Income and is a natural next step in our strategic growth plan. The market potential of countries like Indonesia, Malaysia, and Vietnam is huge given their relatively young populations and high mobile penetration rates. Considering their large geographical distribution areas, I believe that these markets are especially primed for new digital insurance propositions that are enabled by technology. The diversity of our regional partners is a testament to the value of our IaaS model and more significantly, signals that Income is well placed to work with any partner in Asia,” said NTUC Income Chief Executive Officer Andrew Yeo.
“As a born and bred insurer in Singapore, we understand that homegrown businesses know their local consumers best, hence the partnerships are a win-win for us. By forming strategic alliances with like-minded local partners, it allows us to understand the demands of Asia’s digital-first population first-hand, scale our offerings quicker through our partner ecosystems, and most importantly, better relate insurance to customers and make insurance accessible to more. Income’s purpose is to empower better financial well-being for all and to offer insurance access even to the underserved among us. We aim to stay committed to our cause even as we plant our flag abroad,” he added.
Since the inception of the Digital Transformation Office (DTO) more than four years ago, NTUC Income has been innovating and rolling out new insurance business models such as micro-insurance (SNACK), subscription insurance (TRIBE), and usage-based insurance (Milesurance, Gigsurance, and Freightsurance).
These propositions bring to market a new way of engaging with and consuming insurance that is embedded in customers’ lifestyles. This calls for a shift in conventional insurance mindset and appetite for unprecedented risks, alongside a new appreciation for data, InsurTech, and an iterative approach to product design and roll-out.
“As we bring new insurance innovations to the market, we are able to fold our experience and learn from reimagining insurance across the value chain into an IaaS model. Our regional partners recognize the immense competitive advantage that comes with the model as Income grows our digital ecosystem and continues to evolve our way of working with ecosystem partners, be it in Singapore or regionally. The IaaS model, thus, plays to our strength as a digital insurer, connecting partners with the right capabilities, technology know-how, and innovative insurance models to transform and scale their business models efficiently,” said NTUC Income Chief Digital Officer Peter Tay.
“Whether it is through our borderless and modular plug-and-play application program interface (API) microservices, product innovations, seamless customer journey design, or dynamic pricing capabilities, we are confident that the IaaS model will not just complement, but value-add to partners’ existing solutions and strengthen their value propositions in the insurance, broker or InsurTech arenas,” he added.
As part of Income’s strategic partnerships with JAGADIRI, PTI, and VSure, these companies will be the first in Indonesia, Vietnam, and Malaysia to launch Droplet respectively across four cities including Greater Jakarta, Hanoi, and Ho Chi Minh City, as well as Kuala Lumpur.
Droplet is a first-of-its-kind micro-insurance product that is designed to address a major pain point of consumers in Southeast Asia – price surges on ride-hailing platforms during rainy days.
In 2020, the total market value of ride-hailing in SEA was estimated to be at $11 billion, with Indonesia ($5 billion) leading the pack, followed by Singapore ($2 billion), Vietnam ($1.6 billion), and Malaysia ($1.1 billion). With the total value of the ride-hailing market in SEA projected to increase by almost four times to $42 billion by 2025, this tremendous demand for ride-hailing services among Southeast Asians has given rise to the need for ‘rainsurance’ like Droplet to protect consumers financially against price surges on these platforms, particularly during the monsoon season.
“Technology-enabled lifestyle has opened up real opportunities for insurance solutions. The ride-hailing phenomenon and the launch of Droplet are cases in point. We are bullish about lifestyle-embedded insurance propositions such as Droplet and will continue to take inspirations from lifestyle pain points of consumers in Singapore, Indonesia, Malaysia, Vietnam, and beyond to drive innovation, co-create digital-first insurance products and customer journeys for more people regionally,” said Tay.